U.S. SECURITIES AND EXHANGE COMMISSION
                          Washington, D. C. 20549
                                FORM 10-KSB

   (Mark One)

                              U.S. SECURITIES AND EXCHANGE COMMISSION
                                         Washington, D. C. 20549
                                                 FORM 10-KSB
   [X]                     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                                OF THE SECURITIES EXCHANGE ACT OF 1934
                              For the fiscal year ended April 30, 2000
                                                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 No. 333-27037
                                    UNITED FINANCIAL MORTGAGE CORP.
                           (Name of small business Issuer in its charter)

             Illinois                                       36-3440533
        (State or other jurisdiction of                     (I. R. S. Employer
        incorporation or organization)                      Identification No.)

        600 Enterprise Drive, Suite 206                        60523
        Oak Brook, Illinois                                    (Zip Code)
        (Address of principal executive offices)

                              Issuer's telephone number: (630) 571-7222
                    Securities to be registered under Section 12(b) of the Act:

             Title of each class      Name of each exchange on which registered
                Common Stock                         The Chicago Stock Exchange

        Securities to be registered under Section 12(g) of the Act:
                                        None
                                   (Title of Class)

        Check whether the issuer (1) filed all reports required to be filed by
   Section 13 or 15(d) of the Securities Exchange Act during the past 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 [  ]

        Check if there is no disclosure of delinquent filers in response to
   Item 405 of Regulation S-B is not contained in this form, and no disclosure
   will be contained, to the best of registrant's knowledge, in definitive proxy
   or information statements incorporated by reference in Part III of this Form
   10-KSB or any amendment to this Form 10-KSB. [  ]

        State Issuer's revenues for its most recent fiscal year_____$10,896,324

      The aggregate market value of the voting and non-voting common equity
           held by non-affiliates was $3,900,029 on July 31, 2000.
<PAGE>
        (Issuers involved in bankruptcy proceedings during the past five years)
   Check whether the Issuer has filed all documents and reports required to be
   filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
   of securities under a plan confirmed by a court. Yes [  ]  No [  ]

        (Applicable only to corporate registrants) State the number of shares
   outstanding of each of the Issuer's classes of common equity, as of the
   latest practicable date. 3,900,029.

        Documents incorporated by reference. If the following documents are
   incorporated by reference, briefly describe them and identify the part of
   the Form 10-KSB (e.g., Part I, Part II, etc.) into which the document is
   incorporated: (1) any annual report to security holders; (2) any proxy or
   information statement; and (3) any prospectus filed pursuant to Rule
   424(b) or (c) of the Securities Act of 1933 (_Securities Act_).  The
   listed documents should be clearly described for identification purposes
   (. e.g., annual report to security holders for fiscal year ended
   December 24, 1990).

   Transitional Small Business Disclosure Form (Check one): Yes [  ]  No [X]
<PAGE>
                                  PART I

   Item 1. Description of Business

        The Company was formed as an Illinois corporation in April of 1986 to
   engage in the business of mortgage banking.  The Company is licensed as a
   mortgage banker in the states of Arkansas, California, Colorado, Delaware,
   Florida, Illinois, Indiana, Kentucky, Maryland, Missouri, New Mexico,
   Oregon, South Carolina, Utah, Washington, Wisconsin and Texas.  The Company
   also does business in other states that do not have mortgage banking
   licensure statues, including, Idaho, Kansas, Montana, Ohio, Oklahoma,
   West Virginia and Wyoming.  The Company's mortgage banking business
   principally has focused on retail and wholesale residential mortgage
   origination activities.  The Company is expanding its mortgage servicing
   activities by retaining servicing on selected loans that it produces.
   The Company's principal lines of business are conducted through the
   Retail Origination Division, the Wholesale Origination Division and
   the Servicing Division.  The Company's Retail and Wholesale Origination
   business is principally conducted in the states of Illinois, California,
   Nevada, Missouri and Florida.

        The loans that the Company originates and expects to service primarily
   are first mortgages secured by single (one to four units) family residences,
   although the Company also may originate, sell and service loans secured by
   first mortgages on multi-family residential properties (more than four
   units) and to a lesser extent, other mortgage assets.

        The Company's loan production activities generate revenue through (i)
   origination fees and gains on the sale of loans to broker-dealers and
   institutional investors, and (ii) interest on mortgage loans held, or
   "warehoused" from their origination or purchase until their sale to
   broker-dealers and institutional investors. The Company's expanded loan
   servicing division is expected to produce income from loan servicing fees.

        The Company also engages in the brokerage or origination of loans on
   commercial real estate, including shopping centers, office properties and
   other commercial loans. The Company either brokers (e.g. arranges for loan
   funding from third-party lenders) or funds and services these commercial
   loans.  Commercial loans may be brokered to other financial institutions,
   in which case, the Company receives a negotiated fee.  If the Company
   originates and services a commercial loan, then revenues are earned based
   upon the difference between the interest rate paid to the issuer of the
   credit line and the interest rate paid by the borrower.

        At this time, the Company's primary sources of loan originations are
   its Wholesale and Retail Divisions.  On April 30, 2000, the Company's
   Retail Division operated five (5) full service retail origination offices.
   At such date, the retail offices were located in three (3) states and were
   staffed by approximately 50 employees, including commission-based loan
   officers.  The retail offices are currently located as follows: Oak Brook,
   Illinois; Champaign, Illinois; Creve Coeur, Missouri; Clearwater, Florida;
   and Las Vegas, Nevada.  Wholesale origination principally is conducted from
   the Company's offices in Oak Brook, Illinois, Lombard, Illinois, and
   Irvine, California.
<PAGE>
        The Company's mortgage banking activities principally focused on
   retail loan origination for the period from inception through 1993.
   During the period from 1994 through 1995, the Company emphasized the
   wholesale origination.  This emphasis resulted from a general decrease in
   loan origination volume for this period.  The application of additional
   resources to "wholesale" loan origination during this period served to
   increase the Company's loan volume.  During the period from 1996 to date,
   the Company has focused on retail loan origination because it is management's
   experience that profit margins in retail origination generally are greater
   than profits relating to wholesale activities.

   The Wholesale Origination Division

        Wholesale loan origination involves the funding by the Company of loans
   submitted by non-affiliated mortgage brokers.  The Company realizes revenues
   from the sale of such loans to investors for a price greater than the amount
   paid to the mortgage broker. The timing of the sale of loans to investors
   and failure to comply with investor underwriting guidelines could result in
   losses on loan sales.  Management believes that substantially all
   underwriting and related issues generally are resolved with the investor
   prior to closing.  It is management's experience that wholesale loan
   origination tends to be less profitable on a per loan basis than retail
   origination, but expansion into the wholesale sector is less costly than
   retail origination because wholesale origination does not require the
   establishment of costly office space and the related overhead expense.  It
   is management's experience that wholesale account executives generally
   work from their homes or in shared office suites.  This operating structure
   enables the Company to quickly enter new markets.

        It is management's experience that wholesale loan origination tends to
   be less profitable on a per loan basis than retail origination because
   wholesale loans are subject to two levels of costs, namely independent
   broker compensation, and Company sales commissions paid to its personnel
   for the production of the wholesale loan.

        The Company's Wholesale Division, which was established in June,
   1994, operates from its corporate headquarters in Oak Brook, Illinois
   and Irvine, California. The Wholesale Division of the Company acquires loans
   from a network of mortgage brokers and other financial intermediaries,
   including banks, who are screened by the Company.

        In addition to loan processing performed by the correspondent, the
   Wholesale Division performs its own underwriting prior to committing to
   acquire such loans.  Correspondents qualify to participate in the Wholesale
   Division's loan acquisition program after a review of their reputation,
   mortgage lending experience and financial condition, including a review of
   references and financial statements. No single correspondent accounts for
   a significant portion of the Wholesale Division's mortgage loan production.

   The Retail Origination Division

        Retail loan origination involves the direct solicitation of realtors,
   builders and prospective borrowers for the origination of mortgage loans.
   The Company derives revenues from the premium that is received from the
   purchaser of the loan.  Generally, that premium is shared on a negotiated
   basis with loan officers and others who procure the loan and assist in the
   loan origination process.
<PAGE>
        The Company's Retail Origination Division solicits loans directly
   from consumers and through real estate brokers, builders and other real
   estate professionals.  In developing its retail network, the Company has
   followed a strategy of establishing offices in areas where its experience
   indicates strong loan demand.  This gives the Company added flexibility
   to open and close offices as dictated by mortgage demand.

        Establishing a reputation for prompt and responsive customer service
   is another integral component of the Company's marketing strategies. The
   Company believes that the ability to process loan applications quickly
   provides a distinct advantage over its competitors.  It is management's
   experience that the average period between receipt of a loan application
   and the Company's lending commitment is generally less than 10 days.
   The Company endeavors to process loans quickly, while maintaining
   comprehensive underwriting controls through its automated techniques for
   loan origination, processing, underwriting and closing. The Company's
   computer system integrates the Company's loan origination activities to
   expedite loan processing, and enhances its ability to respond to market
   opportunities.

   Quality Control of Mortgage Origination

        In order to ensure that the Company originates high quality mortgage
   loans, it has retained the services of a quality control company with an
   industry wide reputation to conduct audits of the Company's loan
   origination activities on a monthly basis.  The Quality Control company
   audits pursuant to contractual specifications approximately ten (10%)
   percent of the aggregate retail and wholesale loans originated by the
   Company on a monthly basis.  The audit process includes verification of
   mortgage information, including: employment status, wages/salaries;
   credit standing; property appraisal; confirmation of the borrower's
   savings and other assets; and compliance with other applicable
   underwriting guidelines.  The Quality Control company selects loan files
   on a random basis.  The Company receives a quality control management
   report from the Quality Control company at the conclusion of each
   monthly audit.

   Loan Processing and Underwriting

        Loan applications generally are prepared by Company loan officers and
   verified by personnel in the Company's Retail Origination Division.
   Verification procedures, include, among other things, obtaining: (i) written
   confirmations of the applicant's income and bank deposits, (ii) a formal
   credit report on the applicant from an unaffiliated credit reporting
   agency, (iii) a preliminary title report, and (iv) a real estate appraisal.
   Appraisals for conventional and FHA loans are prepared by third party,
   unaffiliated appraisers who are pre-approved based upon their experience,
   education and reputation. Completed loan applications are then transmitted
   to the Company's Underwriting Department or to underwriting sub-contracting
   companies who provide underwriting services to the Company.  The Underwriting
   Department of the Company or its sub-contractors contain experienced staff
   who verify the completeness and accuracy of application information, and
   determine its compliance with the Company's underwriting criteria and
   those of applicable government agencies or other investors.

        Underwriting criteria include loan-to-value ratios, borrower income
   qualifications, investor requirements, insurance and property appraisal
   requirements.  The Company's underwriting guidelines for FHA, VA, FNMA
   and FHLMC loans comply with the written underwriting guidelines of the
   relevant agency.
<PAGE>
        The Company's underwriting guidelines for "non-conforming" loans are
   based upon the underwriting standards required by investors to whom such
   loans are sold.  "Non-Conforming" loans generally include loan products
   that do not comply with the underwriting guidelines of Freddie Mac,
   Fannie Mae, FHA or VA. Non-conforming loans generally are underwritten by
   the Company in accordance with the underwriting guidelines of the applicable
   investor who purchases the loans.

        Most of the Company's underwriting personnel function independently of
   the Company's loan origination personnel and do not report to any individual
   directly involved in the loan origination process.

        The Company's internal Quality Control Department reviews the Company's
   origination activities including approximately one hundred percent (100%)
   of all closed loans in order to enhance the ongoing evaluation of the
   loan processing function, including employees, credit reporting agencies
   and independent appraisers.  In conducting such reviews, the Quality
   Control Department reviews the loan applications for compliance with
   federal and state lending standards, which involves a second verification
   of employment prior to loan closing, reconfirmation of  banking information,
   and obtaining separate credit reports and property appraisals.  The Quality
   Control Department submits all review results directly to the president of
   the Company.

   Loan Commitments

        Subsequent to underwriting approval, prior to loan funding, the Company
   issues loan commitments to qualified applicants.  Commitments indicate loan
   amount, fees, funding conditions, approval expiration dates and interest
   rates. Commitments providing for "fixed" interest rates beyond sixty (60)
   days generally are not issued, unless the Company receives an appropriate
   fee based upon the assessment of the risk associated with a longer commitment
   period.  Servicing compensation (based upon FNMA guidelines) generally ranges
   from .25% to .50% per annum on the outstanding principal balances of the
   loans.  Servicing fees are collected from monthly mortgage payments.  Other
   sources of loan servicing revenues include late charges and use of
   funds benefits.

        As a servicer of mortgage loans underlying mortgage backed securities
   issued by FNMA, FHLMC or other investors, the Company is obligated to make
   timely payments of principal and interest to security holders, whether or
   not such payments have been made by borrowers on the underlying mortgage
   loans.  In accordance with applicable FHA and VA guidelines, the Company
   is insured by FHA against foreclosure loss on FHA loans, and the VA
   guarantees against foreclosure loss on VA loans, subject to certain
   limitations.  Although FNMA and FHLMC are obligated to reimburse the
   Company for principal and interest payments advanced by the Company
   as a servicer, the funding of delinquent payments or the exercise of
   foreclosure rights involves prospective costs to the Company.
<PAGE>
        The Company believes that an important source for its loan-servicing
   portfolio is loans produced by the Company.  The servicing rights for
   selected loans are retained by the Company after such loans are sold to
   investors. In addition, the Company may supplement its servicing portfolio
   by purchasing mortgage servicing rights relating to loans originated by
   other lenders.  Such purchases will be made only after the Company has
   conducted a due diligence analysis of the loan portfolio.

        The Company intends to provide low cost and flexible servicing
   that is responsive to the needs and requirements of its customers and
   investors.

   Seasonality

        It is management's experience that the mortgage loan origination
   business is generally subject to seasonal trends.  These trends reflect
   the general pattern of sale and resale of homes.  It is management's
   experience that loan origination typically peaks during the spring and
   summer seasons, and declines to lower levels from mid-November through
   January.  The mortgage servicing business is generally not subject to
   seasonal trends.

   Competition

        The mortgage banking industry is highly competitive.  The Company
   competes with other financial institutions, such as mortgage banks, state
   and national banks, savings and loan associations, savings banks, credit
   unions and insurance companies, mortgage bankers and mortgage brokers.
   Some of the Company's competitors have financial resources that are
   substantially greater than those of the Company, including some
   competitors which have a significant number of offices in areas where the
   Company conducts its business.  The Company competes principally by
   offering loans with competitive features, by emphasizing the quality of
   its service and by pricing its range of products at competitive rates.

        Information published by the Mortgage Bankers Association of
   America ("MBA") indicates that although the mortgage business is
   competitive, it also is fragmented in that no single lender has a
   significant market share of total origination volume.  MBA data
   indicates that overall mortgage origination volume is shared in
   varying percentages among commercial banks, savings and loan and
   mortgage banking companies. MBA data also indicates that historically,
   mortgage banks have had an estimated twenty-thirty percent (20-30%)
   share of total origination volume. Commercial banks, savings banks,
   savings and loan associations and mortgage banking companies service the
   bulk of residential mortgages. It is management's belief that market
   share among competitors generally shifts more slowly in servicing than
   in origination.  Management of the Company does not anticipate any
   significant changes in the market share described above in the near term.
<PAGE>
        The Company's mortgage loan production activities are subject to
   the Truth-in-Lending Act and Regulation Z promulgated thereunder.
   The Truth-in-Lending Act contains disclosure requirements designed to
   provide consumers with uniform, understandable information with respect to
   the terms and conditions of loans and credit transactions in order to give
   them the ability to compare credit terms.  The Truth-in-Lending Act also
   guarantees consumers a three day right to cancel credit transactions,
   including any refinance mortgage or junior mortgage loan on a consumer's
   primary residence.  The Company believes that it is in substantial compliance
   in all material respects with the Truth-in-Lending Act.

        The Company also is required to comply with the Equal Credit Opportunity
   act of 1974, as amended ("ECOA"), which prohibits creditors from
   discriminating against applicants on the basis of race, color, sex, age or
   marital status.  Regulation B promulgated under ECOA restricts creditors
   from obtaining certain types of information from loan applicants.  It
   also requires certain disclosures by lenders regarding consumer rights
   and requires lenders to advise applicants of the reasons for any credit
   denial.  In instances where the applicant is denied credit or the rate or
   charge for loans increases as a result of information obtained from a
   consumer credit agency, another statute, the Fair Credit Reporting
   Act of 1970, as amended, requires lenders to supply the applicant
   with a name and address of the reporting agency.

        The Federal Real Estate Settlement Procedure Act ("RESPA") imposes,
   among other things, limits on the amount of funds a borrower is required
   to deposit with the Company in an escrow account for the payment of taxes,
   insurance premiums or other charges.  The Company has policies, procedures
   and systems in place to ensure compliance with RESPA.

        The Company believes it is in possession of all licenses in those
   states in which it does business that require such licenses, except where
   the absence of such licenses is not material to the business and
   operations of the Company as a whole.  Conventional mortgage operations
   also may be subject to state usury statutes. FHA and VA loans are exempt
   from the effect of such statutes.

   Item 2. Description of Property

        The Company's corporate and administrative headquarters are located in
   leased facilities in Oak Brook, Illinois.  These facilities comprise
   approximately 4,800 square feet of space in a building leased by the
   Company for a ten year term at annual rate of approximately $9.50 to $15.63
   per square foot, triple net, which lease expires in 2003.  In addition, at
   April 30, 2000, the Company leased an aggregate of approximately 4,000 square
   feet in Lombard, Illinois, 1,146 square feet in Las Vegas, Nevada; 1,475
   square feet in Irvine, California; and 900 square feet in St. Louis,
   Missouri.  The Company has no liability with respect to the lease at
   Creve Coeur, Missouri.  The aggregate annual lease payments on properties
   leased by the Company as of April 30, 2000 was $459,783.  The Company
   believes that its  present facilities are adequate for its current
   level of operations. None of the Company's leased facilities are
   leased from affiliates of the Company.
<PAGE>
        The Company's corporate headquarters are located at 600 Enterprise
   Drive Suite #206, Oak Brook, Illinois 60523 and its telephone number is
   (630) 571-7222.

   Item 3. Legal Proceedings.

         The Company is involved in litigation in the normal course of business.
   This litigation is not expected to have a material effect in the Company's
   results of operations or financial condition.

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

        On August 25, 1999, the Company conducted its Annual Meeting of
   Shareholders and shareholders approved management's recommendation
   regarding the election of directors, the appointment of independent
   auditors and vote on an amendment to the non-qualified and incentive
   stock option plan.

   Item 5. Market for Common Equity and Related Stockholder Matters.

        Market Information

        The Company's registration statement regarding 800,000 shares of Common
   Stock became effective with the United States Securities and Exchange
   Commission on May 26, 1998.  The Company's Common Stock began trading on
   May 27, 1998 at a price of $6.50 per share.

        The Company's Common Stock is traded on The Chicago Stock Exchange
        ("CSX") under the symbol UFM.

        The range of high and low sale prices of the Company's Common
   Stock, as reported by the CSX from May 1, 1999 through July 15, 2000
   were $1.00 and $4.12, respectively.

        Holders.  As of July 15, 2000, there were approximately 525
   holders of record of the shares.

        Dividends. The Company has never declared or paid a dividend on
   its Common Stock, and management expects that a substantial portion
   of the Company's earnings, if any, for the foreseeable future will be
   used to expand loan origination and servicing capabilities. The
   decision to pay dividends, if any, in the future is within the discretion
   of the Board of Directors and will depend upon the Company's earnings, its
   capital requirements, financial condition and other relevant factors such
   as loan covenants or other contractual obligations.
<PAGE>
   Item 6. Management Discussion and Analysis of Operations.

                    MANAGEMENT DISCUSSION AND ANALYSIS
             OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

   This  Management Discussion and Analysis of Financial Condition and
   Results of Operations includes forward-looking statements which
   involve risks and uncertainties.  Actual events or results may differ
   materially from those discussed in the forward-looking statements as
   a result of certain factors.

         The Company, founded in 1986, operates as a full-service mortgage
   banking company engaged in the origination and sale of mortgage loans
   secured by residential real estate.  On a limited scale, the Company
   also originates commercial loans; and services residential mortgage loans.

      Results of Operations
           Two Years Ended April 30, 1999 and April 30, 2000

         The fiscal year ended April 30, 2000 was a period of significant
   challenge for the Company.  Despite the fact that interest rates increased
   as compared to the prior year, loan volume and revenues remained relatively
   constant.  However, the Company saw profit margins on revenue decrease
   for the same period last year due to an increasing interest rate
   environment.  The Company believes it is still well positioned for the
   future due to prior key strategic initiatives that prepared the Company
   for interest rate increases.

          Commission and fee revenue increased from $8,571,594 for the
   twelve months ended April 30, 1999 to $9,051,395 for the twelve months
   ended April 30, 2000.  This is a percentage increase of approximately 5.6%.

          Interest income increased from $1,457,953 for the twelve months
   ended April 30, 1999 to $1,824,603 for the twelve months ended April 30,
   2000.  This increase was attributable to the increase in higher interest
   income on invested capital.

         Salary and commissions expenses increased from $4,539,018 for the
   twelve months ended April 30, 1999 to $6,408,302 for the twelve months
   ended April 30, 2000.  The increase was attributed to two main
   factors: continued investment in the expansion of the Company's sales
   organization and the increasing cost of premiums paid on wholesale
   originations.

         Selling and administrative expenses decreased from $3,460,977
   for the twelve months ended April 30, 1999 to $3,039,924 for the
   twelve months ended April 30, 2000.

        Depreciation and amortization expense increased from $80,704 for
   the twelve months ended April 30, 1999 to $127,414 for the twelve
   months ended April 30, 2000.  This increase principally resulted from
   technology investments made during fiscal year 1999.  This investment
   is in line with the Company's strategy of technological advancement
   and infrastructure improvements.

        Interest expense increased from $1,054,921  for the twelve
   months ended April 30, 1999 to $1,439,021 for the twelve months ended
   April 30, 2000.  This increase was the result of the increased cost
   of borrowing as a result of a higher interest rate environment.
<PAGE>
         As a consequence of the accounting treatment afforded to
   certain equity transactions entered into by the Company regarding
   warrants and other financings, the Company's results of operations
   include non-cash charges against income in the twelve months ending
   April 30,1999 and April 30, 2000, respectfully.  This consists of
   $156,000 recorded as advisory fees in fiscal years 1999 and $78,000
   for fiscal year 2000.  Without this non-cash charge, net income
   available to common shareholders would have been $508,715 as compared
   to $352,715 in fiscal year 1999 and ($3,758) as compared to ($81,758)
   in fiscal year 2000.

   Liquidity and Capital Resources
         During the twelve months ended April 30, 1999 and April 30,
   2000, net cash generated(used) by operating activities was $435,221
   and $267,329, respectively.  Net cash generated by operating
   activities decreased from year to year largely due to the fluctuation
   in net income.

         Net cash generated(used) by investing activities decreased from
   ($243,907) for the fiscal year ended April 30, 1999 to ($528,945) for
   the fiscal year ended April 30, 2000.  The change in cash from 1999
   to 2000 was largely attributable to the sale of two foreclosed
   properties in 1999 and the purchase of two properties in 2000.  This
   was partially offset by investments in fixed assets and the increase
   in retaining servicing rights on certain closed loans during the time
   periods.

         Cash flow from financing activities for the fiscal year 1999
   and fiscal year 2000 was 2,179,612 and ($477,165) respectively.  This
   change resulted largely from the net proceeds of a public offering
   that occurred in early fiscal year 1999.

          Therefore, the net cash flow from operating, financing, and
   investing activities was $2,370,926 for the fiscal year ended April
   30, 1999 and ($738,781) for the first the fiscal year ended April 30,
   2000.

         Capital expenditures for the year ended April 30, 2000 were
   approximately $75,000, principally in technology and to a lesser
   extent for the expansion of sales organization facilities.  These
   capital expenditures include a new loan tracking system that coincides
   with the strategy of using technology as a competitive advantage.
   The Company believes it will continue to make investments in
   technology in the future to enhance and maintain its product and
   service offerings.

         Cash flow requirements depend on the level and timing of the
   Company's activities in loan origination in relation to the timing of
   the sale of such loans.  In addition, the Company requires cash flow
   for the payment of operating expenses, interest expense, and capital
   expenditures.  Currently, the Company's primary sources of funding
   are borrowings under warehouse lines of credit, proceeds from the
   sale of loans in the secondary market and internally generated funds.
<PAGE>
         During the past twelve months, the Company has continued to
   pursue its strategy of servicing mortgage loans.  In order to engage
   in this business, the Company has retained the servicing rights on
   certain loans that the Company originates.  Such retention has
   resulted in some reduction in short term cash flow available to the
   Company.  The Company has employed capital to finance the retention
   of servicing rights.  This capital principally would have been
   expended to pay the costs associated with loan origination, such as
   loan officer compensation, broker commissions, and miscellaneous
   overhead expenses.  However, the retention of servicing rights is
   expected to create an asset on the Company's balance sheet and create
   future cash flow streams.

    Industry Trends
         Higher interest rates in recent quarters have resulted in many
   mortgage companies leaving the market.  This benefits the Company
   long-term because of less competition.  However, the short-term
   effects include less origination activity and reduced margins.

         The Company believes that the industry will continue to offer
   broader and more diversified product offerings and that technology
   will play an increasing part in real estate transactions.  This
   includes expanded use of Internet capabilities which the Company will
   continue to aggressively pursue.

        The Company's business base principally is concentrated in the
   Midwest and Western United States.  As such, the Company may be
   subject to the effects of economic conditions and real estate markets
   specific to such locales.

      Inflation and Seasonality
          The Company believes the effect of inflation, other than its
   potential effect on market interest rates, has been insignificant.
   Historically, seasonal fluctuations in mortgage originations
   generally do not have a material effect on the financial condition or
   operations of the Company.  Due to the technological and infrastructure
   advancements, such as increasing the servicing portfolio, the Company
   hopes to continue to minimize seasonality fluctuations.
<PAGE>
   Item 7. Financial Statements

                      UNITED FINANCIAL MORTGAGE CORP.

                           FINANCIAL STATEMENTS

                             TABLE OF CONTENTS



                                                                      Page

   Table of Contents_____________________________________                9

   Report of Independent Certified Public Accountants___________________10

   Balance Sheet at April 30, 1999 and 2000__________________________11-12

   Statement of Income for the years ended
        April 30, 1999 and 2000_________________________________________13

   Statement of Stockholders' Equity for the years
        ended April 30, 1999 and 2000___________________________________14

   Statement of Cash Flows for the years
        ended April 30, 1999 and 2000__________________________________ 15

   Notes to Financial Statements_____________________________________16-22
<PAGE>

                       INDEPENDENT AUDITOR'S REPORT


                      UNITED FINANCIAL MORTGAGE CORP.

        Financial Statements as of April 30, 1999 and April 30, 2000
   together with the Independent Auditors' Report

   To the Board of Directors and Stockholders of
   United  Financial Mortgage Corp.

        We have audited the accompanying balance sheets of United Financial
   Mortgage Corp. as of April 30, 1999 and April 30, 2000, and the related
   statements of income, stockholders' equity and cash flows for the years
   ended April 30, 1999 and April 30, 2000.  These financial statements are
   the responsibility of the Corporation's management.  Our responsibility
   is to express an opinion on these financial statements based on our audits.

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

        In our opinion, the financial statements referred to above
   present fairly, in all material respects, the financial position of
   United Financial Mortgage Corp. as of April 30, 1999 and April 30,
   2000 and the results of its operations and its cash flows for the
   years then ended in conformity with generally accepted accounting
   principals.


                                 CRAIG SHAFFER AND ASSOCIATES, LTD., C.P.A.

   Des Plaines, Illinois
   July 24, 2000

   Respectfully submitted,

   By: /S/ Craig Shaffer
   Craig Shaffer and Associates, Ltd.
   Certified Public Accountants
   July 24, 2000
<PAGE>
<TABLE>
                            United Financial Mortgage Corp.
                               Balance Sheet

                                                     Year Ended    Year Ended
                                                   April 30, 1999 April 30, 2000
   <S>                                          <C>               <C>
                   A S S E T S
   Current Assets:
         Cash                                    $   4,344,937    $   3,606,156
         Loans held for sale                        33,979,554       31,641,309
         Accounts Receivable                           315,860          204,623
         Due From Employees                             14,700           12,401
         Due From Officers                               2,439                0
         Deferred Tax Asset                                  0           75,079
         U.S. Savings Bond                               2,000            2,000
         Note Receivable                               110,000          125,599
         Prepaid Expense                               177,098          132,663
                  Total current assets           $  38,946,588    $  35,799,830

       Furniture, Fixtures & Equipment
         Cost                                          645,519          705,669
         Accumulated Depreciation                     (276,512)        (365,801)
               Total Furniture, Fixtures & Equipment   369,007          339,868

   Other Assets:
         Servicing Rights                              185,980          328,574
         Land Investments                                    0          234,507
         Escrow Deposits                                60,793                0
         Security Deposits                              16,403           23,417
         Deferred Advisor Fees                          78,000                0
         Investments                                     5,750           68,472
         Goodwill Net                                  132,715          123,562
               Total Other Assets                      479,641          778,532

           Total Assets                          $  39,795,236    $  36,918,230


       The accompanying notes are an integral part of this statement
</TABLE>
<PAGE>
<TABLE>
                            United Financial Mortgage Corp.
                               Balance Sheet

                        LIABILITIES AND STOCKHOLDERS' EQUITY

                                                     Year Ended    Year Ended
                                                  April 30, 1999 April 30, 2000
   <S>                                          <C>               <C>
   Current Liabilities:
         Accounts Payable                        $   235,952      $   254,793
         Leases Payable-Short Term                    12,295           14,093
         Accrued Expenses                            177,675          558,159
         Taxes Payable                                62,959                0
         Deferred Income Taxes                       270,599                0
         Escrow Payable                               32,892           13,627
         Notes Payable - Current                  32,375,632       29,568,688
            Total Current Liabilities          $  33,168,004   $   30,409,360
         Leases Payable-Long Term                     31,551           13,341
                    Total liabilities          $  33,199,555   $   30,422,701

       Stockholders Equity
         Common Shares, 20,000,000 Authorized
             No. Par Value, Shares Issued and
             Outstanding; 3,898,219 at
             April 30, 1999 and 3,900,029
             at April 30, 2000.                $  6,529,332    $    6,510,938
         Preferred Shares, 5,000,000 Authorized,
             No Par Value, 63 Series A Redeemable
             Shares Issued And Outstanding;
             value $315,000 at April 30, 1999
             and April 30, 2000.               $    315,000    $      315,000
         Retained Earnings                         (248,651)         (330,409)
                    Total Stockholders' Equity $  6,595,681    $    6,495,529

                    Total liabilities and
                    stockholders' equity         39,795,236        36,918,230

               The accompanying notes are an integral part of this statement
</TABLE>
<PAGE>
<TABLE>
                            United Financial Mortgage Corp.
                                    Statement of Income

                                                     Year Ended    Year Ended
                                                  April 30, 1999 April 30, 2000
   <S>                                         <C>               <C>
   Revenues:
     Commissions and Fees                      $  8,571,594       $  9,051,395
     Interest Income                              1,457,953          1,824,603
     Other Income and Expense                        15,681             20,326
           Net Revenue                           10,045,228         10,896,324

   Expenses:
     Salaries & Commissions                    $  4,539,018       $  6,408,302
     Selling & Administrative                     3,460,977          3,039,924
     Depreciation                                    80,704            127,414
     Interest Expense                             1,054,921          1,439,021
     Cost and Expense of Litigation                 150,000                  0
     Net Expense                               $  9,285,620       $ 11,014,661

     Income (loss) Before Income Taxes         $    759,608       $   (118,337)
     Income Tax Provision                           339,228            (75,079)
     Net Income (loss)                              420,380            (43,258)
     Less Dividends Paid on Preferred Stock          67,665             38,500
     Net Income (loss) Applicable to
       Common Shareholders                          352,715            (81,758)

     Basic Net Income(loss) Per Share                  0.09              (0.02)
     Diluted Net Income Per Share                      0.09              (0.02)

     Shares used in computation of basic
       net income per share                       3,828,918          3,900,029
     Shares used in computation of diluted
       net income per share                       4,070,918          4,200,029


             The accompanying notes are an integral part of this statement
</TABLE>
<PAGE>
<TABLE>

                      United Financial Mortgage Corp.
                     Statement of Stockholders Equity
                    Twelve Months Ended April 30, 2000

                                   Common     Preferred    Retained
                                    Stock       Stock      Earnings     Total
<S>                               <C>          <C>        <C>         <C>
Balance, April 30, 1999           6,529,332    315,000    (248,651)   6,280,681

Net Income for the year end
     April 30, 2000                                        (43,258)     (43,258)

Retirement of 7,070 Shares          (18,394)                            (18,394)

Dividend Paid on Preferred Stock                           (38,500)     (38,500)

Balance, April 30, 2000           6,510,938    315,000    (330,409)   6,495,529



       The accompanying notes are an integral part of this statement
</TABLE>
<PAGE>
<TABLE>

                       United Financial Mortgage Corp.
                          Statement of Cash Flows

                                                   Year Ended       Year Ended
                                                  April 30, 1999  April 30, 2000
   <S>                                              <C>            <C>
   CASH FLOWS FROM OPERATING ACTIVITIES
      Net Income or (Loss)                          $    420,380   $    (39,091)
        Adjustments to Reconcile Net Income
        To Net Cash Provided by
              Operating Activities
        Depreciation                                      76,028        127,414
        Changes In:
          Prepaids & Other Current Aseets               (448,852)       157,971
          Accrued
          Accounts Payable                                28,490         18,841
          Deposits                                        (5,101)        53,779
          Deferred Tax Asset                                   0        (75,079)

   NET CASH PROVIDED BY OPERATING ACTIVITIES        $    435,221   $    267,329

   CASH FLOWS FROM INVESTING ACTIVITIES
          Investments                                          0        (62,722)
          Land Sales                                     303,250       (234,507)
          Purchase of Fixed Assets                      (302,748)       (89,122)
          Goodwill                                      (132,715)             0
          Servicing Rights                              (111,694)      (142,594)

   NET CASH PROVIDED FROM INVESTING ACTIVITIES          (243,907)      (528,945)

   CASH FLOWS FROM FINANCING  ACTIVITIES
          Notes Receivable                          $     30,878   $    (15,599)
          Changes in Short Term Debt                      12,295          1,798
          Changes in Long Term Debt                     (393,449)       (18,210)
          Officers Loans                                  62,434          2,439
          Deferred Advisor Fees                          156,000         78,000
          Deferred Offering Expenses                     143,425              0
          Preferred Stock Redeemed                      (750,000)             0
          Common Stock Proceeds - Net                  4,146,437              0
          Common Stock Repurchase                              0        (18,394)
          Mortgage Loans Made                        (19,387,131)     2,338,245
          Changes in Bank Line of Credit              18,226,388     (2,806,944)
          Preferred Stock Dividend                       (67,665)       (38,500)

   CASH PROVIDED (USED) BY FINANCING
        ACTIVITIES                                     2,179,612       (477,165)

   INCREASE (DECREASE) IN CASH                         2,370,926       (738,781)
   Cash at Beginning of Period                         1,974,011      4,344,937

   Cash at End of Period                               4,344,937      3,606,156




       The accompanying notes are an integral part of this statement
</TABLE>
<PAGE>


                      UNITED FINANCIAL MORTGAGE CORP.
                   Notes to Audited Financial Statements


   Organization and Business of the Company
        United Financial Mortgage Corp. is an Illinois corporation
   organized on April 30, 1986 to engage in the residential mortgage
   banking business.  The Company is a licensed mortgage banker in the
   states of Arkansas, California, Colorado, Connecticut, Delaware,
   Florida, Illinois , Indiana, Kentucky, Maryland, Missouir, Nevada,
   New Mexico, North Carolina, Oregon, South Carolina, Texas, Utah,
   Virginia, Washington and Wisconsin. The Company also does business in
   other states that do not have mortgage banking liscensure statutes,
   including Idaho, Kansas, Montana, Ohio, Oklahoma, West Virginia, and
   Wyoming.  The Company's mortgage banking business principally has focused
   on retail and wholesale residential mortgage origination activities.
   The Company is expanding its mortgage servicing activities by retaining
   servicing on selected loans that it produces.  The Company's principal
   lines of business are conducted through the Retail Origination Division,
   the Wholesale Origination Division, the Commercial Division, and the
   Servicing Division.  The Company's Retail and Wholesale Origination
   business is conducted principally in the states of California, Illinois,
   and Nevada.

        The Company is an approved mortgagee by the Department of
   Housing and Urban Development and is qualified to originate mortgage
   loans insured by the Federal Housing Administration as well as
   service loans for the Federal National Mortgage Association and the
   Federal Home Loan Mortgage Corporation. In addition, the Company is
   approved to issue Government National Mortgage Association
   securities.

   Reverse Share Split
        In 1995, the Company's shareholders approved a reverse split of
   the Company's common shares pursuant to which each three outstanding
   common shares became two common shares.  The reverse split was
   effective May 9, 1995.  The accompanying financial statements reflect
   this reverse split as of May 1, 1995.

   Summary of Significant Accounting Policies
   Net Income(Loss) Per Share
        In February 1997, the Financial Accounting Standards Board
   issued Statement of Financial Accounting Standards (SFAS) No. 128,
   "Earnings Per Share."  SFAS No. 128 replaced the calculation of
   primary and fully diluted earnings per share with basic and diluted
   earnings per share.  Unlike primary earnings per share, basic
   earnings per share excludes any dilutive effects of options,
   warrants, and convertible securities.  Earnings per share amounts for
   all periods have been presented and, where appropriate, restated to
   conform to SFAS No. 128 requirements.
<PAGE>
                      UNITED FINANCIAL MORTGAGE CORP.
                   Notes to Audited Financial Statements
   Use of Estimates

        The preparation of the financial statements in conformity with
   generally accepted accounting principles requires management to make
   estimates and assumptions that affect the amounts reported in the
   financial statements and accompanying notes.  Actual results could
   differ from those estimates.

   Revenue Recognition
        Revenue is recognized when loans are sold after closings.
   Interest income from mortgages held by the Company and from short
   term cash investments is recognized as earned.

   Commissions and Fees
        Commissions and fees principally consist of premiums received
   from purchasers of mortgage loans originated by the Company.  Gains
   (losses) from purchasing, selling, investing in or otherwise trading
   in closed mortgage loans are an immaterial portion of the Company's
   revenues and are included in the Statement of Income under the item
   entitled Revenues: Commissions and Fees.

   Cash and Cash Equivalents
        Cash and cash equivalents consist of cash and short-term
   investments with maturity of three months or less.

   Accounts Receivable
        Accounts receivable consist of advances made in connection with
   loan origination activities.

   Concentration of Credit Risk
        Credit risk with respect to mortgage loan receivables and
   accounts receivable is generally diversified due to the large number
   of customers and the timely sale of the loans to investors, generally
   within one (1) month.  The Company performs extensive credit
   investigation and verification procedures on loan applicants before
   loans are approved and funds disbursed.  In addition, each loan is
   secured by the underlying real estate property.  As a result, the
   Company has not deemed it necessary to provide reserves for the
   ultimate realization of the mortgage loan receivables.

   Fixed Assets
        Fixed assets consist of furniture, fixtures, equipment and
   leasehold improvements and are recorded at cost and are depreciated
   using the straight line method over their estimated useful lives.
   Furniture, fixtures and equipment are depreciated over 5-7 years and
   leasehold improvements over the shorter of the lease term or the
   estimated useful life of the asset.  Upon asset retirement or other
   disposition, cost and the related allowance for depreciation are
   removed from the accounts, and gain or loss is included in the
   statement of income.  Amounts expended as repairs and maintenance are
   charged to operations.

   Fair Value of Financial Instruments
        The carrying value of the Company's financial instruments,
   including cash and cash equivalents, mortgage receivables, accounts
   receivables, accounts payable and notes payable, as reported in the
   accompanying balance sheet, approximates fair value.
<PAGE>
                      UNITED FINANCIAL MORTGAGE CORP.
                   Notes to Audited Financial Statements
   Income Taxes
        The Company accounts for income taxes using the liability method
   in accordance with SFAS No. 109., "Accounting for Income Taxes."  The
   liability method provides that deferred tax assets and liabilities
   are determined based on differences between financial reporting and
   tax basis of assets and liabilities and are measured using the
   enacted tax rates and laws that will be in effect when the differences
   are expected to reverse.

   Earnings (Loss) per Common Share
        Earnings (loss) per common share is calculated on net income
   (loss) after deduction for dividends paid on the Series A Preferred
   Shares.  The number of common shares used in the computation is based
   upon the number of shares outstanding at the end of the period.

   Certain Relationships and Related Transactions
        On November 20, 1998, the Company completed a second mortgage
   loan on the principal residence of Mr. Rocco Cappiello, a director of
   the Company, in the amount of $130,000.  The loan was made on terms
   generally more favorable to the Company than would otherwise be
   available in the competitive marketplace.  Further, the Company
   secured its loan position with collateral, both real and personal
   property, substantially in excess of its underwriting guidelines for
   other similar loans in the ordinary course of its business.  As of
   August 1999, Mr. Rocco Cappiello is no longer a director of the
   Company.

   Transfers and Servicing of Financial Assets and Extinguishments of
   Liabilities

          In June 1997, the Financial Accounting Standards Board
   ("FASB") issued Statement of Financial Accounting Standards No. 130,
   "Reporting Comprehensive Income"("SFAS 130").  SFAS 130,
   establishes the standards for reporting and displaying comprehensive
   income and its components (revenues, expenses, gains, and losses) as
   part of a full set of financial statements.  This statement requires
   that all elements of comprehensive income be reported in a financial
   statement that is displayed with the same prominence as other
   financial statements.  The statement is effective for fiscal years
   beginning after December 15, 1997.  Since the standard applies only
   to the presentation of comprehensive income, it should not have any
   impact on the Company's results of operations, financial position or
   cash flows.  Comprehensive income and regular income are one and the
   same for the current period.

            In June 1997, the Financial Accounting Standards Board
   ("FASB") issued Statement of Financial Accounting Standards No. 131,
   "Disclosures about segments of an Enterprise and Related Information."
   ("SFAS 131").  SFAS 131 is effective for years beginning after
   December 15, 1997.  SFAS No. 131 establishes standards for the way that
   public business enterprises report information about operating segments
   in annual financial statements and financial reports.  It also establishes
   standards for related disclosures about products and services, geographic
   areas and major customers.  SFAS No. 131 is effective for financial
   statements for fiscal years beginning after December 15, 1997, and
   therefore the Company has adopted the new requirements.
<PAGE>
                      UNITED FINANCIAL MORTGAGE CORP.
                   Notes to Audited Financial Statements

   Notes Payable
        The Company has mortgage warehouse credit facilities aggregating
   $49 million with several commercial banks and other financial
   institutions.   These credit facilities are used to fund approved
   mortgage loans and are collateralized by mortgage loans.  The Company
   is not required to maintain compensating balances.

        Amounts outstanding under the various credit facilities consist
        of the following:

                                                                 April 30, 2000
       $20 million mortgage warehouse credit facility at a
              commercial bank; interest at LIBOR;
              plus 160 basis points; expires 10/01/2000         $   12,663,587


       $2 million mortgage warehouse credit facility at a
              commercial bank; interest at LIBOR plus
              160 basis points expires 10/01/2000                    1,049,236

       $25 million mortgage warehouse credit facility at a
              commercial bank; interest at Libor plus 150 basis
              point; expires 10/08/2000                             15,855,865


        $2 million mortgage warehouse credit facility at a
              commercial bank; interest at Prime; plus 50 basis
              points; expires 10/31/2003                                     0

                  Total                                         $   29,568,688


   Retirement Plan
        The Company has a 401K plan that all eligible employees may
   participate in.  Company contributions to the plan are discretionary.

<PAGE>
                      UNITED FINANCIAL MORTGAGE CORP.
                   Notes to Audited Financial Statements

   Lease Commitments
        The Company conducts its operations from leased premises and has
   several equipment leases as part of standard business practice.  The
   following table reveals the estimated minimum rental payments under
   the Company's operating leases.  Total rent expense under these
   leases was approximately $459,783 for the twelve months ended April
   30, 2000.

        Future minimum rental payments for the next five years at April
   30, 2000 are as follows:

                       Year Ending April 30,             Operating Leases
                            2001                              294,299
                            2002                              255,269
                            2003                              209,693
                            2004                              124,892
                            2005                               74,151

                                     Total Commitment       $ 958,304


        Future lease payments capital leases at April 30, 2000:

                       Year Ending April 30,             Capital Leases
                            2001                               17,573
                            2002                               12,008
                            2003                                5,415
                            2004                                  451
                                   Total Commitment        $   35,447
                                   Less Interest                8,013
                                   Less Short Term             14,093
                                   Long Term               $   13,341

   Income Taxes
        The income tax provision consists of the following for the
   period ended April 30:

                                        1999                2000
             Current:
                  Federal            $   48,635         $      0
                  State                  14,324                0
                  SubTotal               62,959                0

             Deferred:
                  Federal            $  311,221          (62,261)
                  State                  46,200          (12,818)
                  SubTotal              357,421          (75,079)

             Total                   $  420,380        $ (75,079)
<PAGE>

                      United Financial Mortgage Corp.
                   Notes to Audited Financial Statements


        The components of the deferred tax asset (liability) are as
        follows for the periods ending April 30:

                                        1999                2000
             Contributions                 0               1,283
             Loss Carry-Forward            0            (282,627)
             Accelerated Depreciation 24,415             (34,766)
             Deferred Receivables   (295,014)            165,951

             Deferred Tax Asset
                 (Liability)        (270,599)           (150,159)
             Valuation Allowance           0             (75,080)

        Net Deferred Tax Asset
               (Liability)      $   (270,599)         $  (75,079)

        The effective tax rate for the years ended April 30, 1999 and
        April 30, 2000: the statutory Federal tax of 34%; and state tax
        rate of 7%.

   Series A Preferred Stock
        The Series A Preferred Stock is non-voting, nonparticipating and
   has a liquidation preference upon dissolution of the Company of
   $5,000 per share.  The holders of the Preferred Stock are entitled to
   a variable dividend only at the discretion of and determination by
   the Board of Directors.  A dividend of $67,665 was declared for the
   year ended April 30, 1999 and $38,500 was declared for the year ended
   April 30, 2000.

   Stockholders' Equity
      Warrants
        At April 30, 2000, the Company had total warrants outstanding to
   purchase 300,000 shares of the Company's Common Stock.  The exercise
   price of the warrants range between $0.50 and $7.80 per share.  Warrants
   for 25,000 shares expire on the fifth anniversary of their issuance.
   Warrants for 195,000 shares expire on November 15, 2000.  Warrants for
   80,000 shares expire May 2003.  In certain circumstances, the warrants
   have certain "piggy back" or other registration rights.

        As of April 30, 2000, an advisor to the Company was issued
   warrants to purchase 195,000 shares of the Company's Common Stock at
   an exercise price of $0.50 per share.  The warrants are exercisable
   until November 15, 2000  and contain certain registration rights.

        The Company has reserved 300,000 common shares for issuance upon
   exercise of all warrants.

      Treasury Stock
                  In March of 1999, the Company commenced a stock
   repurchase program.  As of April 30, 2000 the Company has purchased
   11,770 shares and has returned such shares to `authorized but not
   issued' shares.
<PAGE>
                      United Financial Mortgage Corp.
                   Notes to Audited Financial Statements

   Servicing
        During the recent year ended April 30, 2000, the Company has
   continued to build a servicing portfolio.  As of the balance sheet
   date, the servicing portfolio was seventeen million, two hundred
   ninety three thousand, three hundred eighty eight dollars
   (17,293,388) in residential loans.

   Stock Option Plan
        In December, 1993 the Company adopted the Non-Qualified and
   Incentive Stock Option Plan and established the number of common
   shares issuable under the plan at 500,000 shares.  The exercise price
   for shares under the plan is the fair market value of the Common
   Stock on the date on which the option is granted.  The option price
   is payable either in cash, by the surrender of common shares in the
   Company, or a combination of both.  The aggregate number of options
   granted in any one year cannot exceed 10% of the total shares reserved
   for issuance under the plan.  Options will be exercisable immediately,
   after a period of time or in installments, and expire on the  tenth
   anniversary of the grant.  The plan will terminate in December 2003.

        During the period ending April 30, 1999, the Company granted
   options for a total of 74,500 shares of stock at $6.50 per share.
   Mr. Steve Khoshabe, the Executive Vice President of the Company was
   awarded 50,000 of these options.

        During the period ending April 30, 2000 the Company granted
   options for 96,500 more shares of stock at $6.50 per share.

   Contingencies
                 The Company is involved in litigation in the normal
   course of business. This litigation is not expected to have a
   material effect in the Company's results of operations or financial
   condition.

   Expansion
        On October 9, 1998, the Company purchased certain assets of
   Mortgage Service of America, Inc. for $187,291 under the purchase
   method of accounting.  MSA was is in the mortgage loan origination
   business and originated primarily first mortgages.  The purchase
   price was paid in cash.  Assets in the amount of $50,000 are being
   depreciated over their useful lives and goodwill of $137,291 will be
   amortized over 15 years.  Due to the method of accounting used by
   MSA, it is not possible to present a pro forma combined financial
   statement.  If included, management does not believe it would present
   a material change to the Company's financial statements.

   Credit Risk
        Financial instruments that potentially subject the Company to
   credit risk include cash balances at banks that exceed the related
   federal deposit insurance by $3,595,840 at April 30, 2000.
<PAGE>
                               United Financial Mortgage Corp.
                            Notes to Audited Financial Statements

   Basis of Presentation
        Earnings per share is presented in accordance with the provision
   of the Statement of Financial Accounting Standards No. 128, "Earnings
   Per Share" (SFAS 128), which requires the presentation of "basic" and
   "diluted" earnings per share.  Basic earnings per share is based on
   the weighted average shares outstanding without regard for common
   stock equivalents such as stock options and warrants.  Diluted
   earnings per share includes the effect of common stock equivalents.

   The following reconciles basic earnings per share to diluted earnings
   per share under the provisions
   of SFAS 128:

                                      Period ended April 30, 1999
                                       Income            Shares      Per Share
                                      (Numerator)    (Denominator)    Amount

        Basic Earnings Per Share
        Income Available to Common
            Shareholders                352,715        3,828,917       .0921

        Effect of Dilutive Securities
             Options and Warrants                        242,000


        Diluted Earnings Per Share
             Income Available to Common
             Shareholders               352,715        4,070,917       .0866


                                      Period ended April 30, 2000
                                       Income            Shares      Per Share
                                      (Numerator)    (Denominator)     Amount

        Basic Earnings Per Share
             Income Available to Common
             Shareholders               (81,758)       3,900,029      (.0209)

        Effect of Dilutive Securities
             Options and Warrants                        300,000

        Diluted Earnings Per Share
             Income Available to Common
             Shareholders               (81,758)       4,200,029      (.0194)

<PAGE>

   Item 8. Changes in and Disagreements With Accountants on Accounting
   and Financial Disclosure.

        Not Applicable

                                 PART III

   Item 9. Directors, Executive Officers, Promoters and Control Persons;
   Compliance with Section 16(a) of the Exchange Act.

        (a)  Recent Sales of Unregistered Securities.

             The Company has never declared or paid a dividend on its
        Common Stock, and management expects that a substantial portion
        of the Company's earnings, if any, for the foreseeable future
        will be used to expand loan origination and servicing capabilities.
        The decision to pay dividends, if any, in the future is within the
        discretion of the Board of Directors and will depend upon the
        Company's earnings, its capital requirements, financial condition
        and other relevant factors such as loan covenants or other
        contractual obligations.

        (b)  Use of Proceeds -N/A

   Item 10. Executive Compensation

                        SUMMARY COMPENSATION TABLE

                            Annual Compensation

                                                              Other Annual
                                                              Compensation
   Name and Principal Position       Year    Salary    Bonus   (1)(2)(3)(4)
   Joseph Khoshabe, President        2000   $250,000    -0-       $11,565
                                     1999   $244,166  $47,561     $11,565
                                     1998   $180,000    -0-       $ 3,161
                                     1997   $180,000    -0-       $ 3,161
                                     1996   $170,000(4) -0-       $ 3,161

   Steve Y. Khoshabe
   Executive Vice President          2000   $ 90,000    -0-       $ 3,495
                                     1999   $ 86,500    -0-       $ 3,495
                                     1998   $ 50,063    -0-       $ 2,210
                                     1997   $ 46,093    -0-       $ 2,210
                                     1996   $ 40,393    -0-       $ 2,210

   _____________________
   (1)  Includes: $1,980 for annual disability premiums; and $9,505 for
        annual health insurance premiums for Mr. Khoshabe and his
        dependents.
   (2)  Does not include a $25,000 annual car allowance payable to Mr.
        Joseph Khoshabe.
   (3)  Does not include a $12,000 annual car allowance payable to Steve
        Khoshabe.
   (4)  This salary amount was not paid to Mr. Khoshabe.  This salary
        amount is included to satisfy applicable accounting
        requirements.
<PAGE>
   Items 11. Security Ownership of Certain Beneficial Owners and
   Management

        The following table sets forth certain information known to the
   Company regarding beneficial ownership of the Company's Common Stock
   at the date of this Proxy Statement, by (1) each person known by the
   Company to beneficially own more than 5% of the Company's Common
   Stock, and (ii) the officers and directors of the Company beneficially
   owning such Common Stock. The Company believes that Mr. Joseph Khoshabe
   as trustee of the Joseph Khoshabe Trust, under trust agreement dated
   September 22, 1995 (the "J.K. Trust"), has sole investment and voting
   power with respect to the shares beneficially owned by the J.K. Trust.

                                                 Number of
      Name and Address of Beneficial Owner         Shares    Percent Owned (1)
        J.K. Trust                               2,531,842         60.3%
        c/o United Financial Mortgage Corp.
        600 Enterprise Drive
        Suite 206
        Oak Brook, Illinois 60521

        Rocco M. Cappiello                         210,455(2)       5.0%
        3123 Crestwood Drive
        Northbrook, IL 60062
   _________________
   (1)  The computations include the issuance of 300,000 shares of
        Common Stock upon exercise of various outstanding warrants.

   (2)  Mr. Rocco M. Capiello has the right to acquire 195,000 shares,
        upon exercise of a certain Advisor Warrant.

        The J.K. Trust is the principal shareholder of the Company.  Mr.
   Joseph Khoshabe originally purchased the shares and then had them
   reregistered in the name of the J.K. Trust for estate planning
   purposes.  Mr. Khoshabe as the trustee of the J.K. Trust is the
   beneficial owner of 2,531,842 shares of the Common Stock of the
   Company.  In connection with the organization of the Company and its
   initial capitalization, the J.K. Trust paid a total of $130,070 for
   100% of the Company's common stock.  Therefore, the J.K. Trust
   purchased its ownership interest in the Company for $.051 per share.
<PAGE>

   Item 12. Certain Relationships and Related Transactions.

        The Company's Board of Directors authorized the issuance of 213
   shares of Series A Non-Voting Preferred Stock ("Preferred Stock").
   The outstanding shares of Preferred Stock were purchased from the
   Company for total cash consideration of $1,065,000 or $5,000 per
   share.  The 213 shares of Preferred Stock includes 113 shares
   purchased by the J.K. Trust on June 10, 1996 for a cash payment to
   the Company of $565,000.  The J.K. Trust purchased these shares of
   Preferred stock as a capital infusion to compensate for the $565,000
   judgment that was paid in connection with certain terminated
   litigation matters.

        On June 5, 1998, 150 shares of the Preferred Stock were redeemed
   by the Company for a redemption price of $750,000 and no longer are
   outstanding.

        The redemption price for the Preferred Stock represents the
   original purchase price for such shares.  The decision to redeem the
   shares by the Company was made solely by the holder of such shares,
   namely Mr. Joseph Khoshabe, the President and then sole director of
   the Company.


        The J.K. Trust for which Mr. Joseph Khoshabe is the trustee will
   continue to h old sixty-three (63) shares of Preferred Stock after
   the redemption described above.

        The Company may pay variable dividends with respect to the
   Preferred Stock as determined by the Board of Directors of the
   Company on an annual basis.

        As an affiliate of the Company within the meaning of Rule 144(a)
   (1), the J.K. Trust will be subject to the volume limitations of Rule
   144(e) with respect to any sales by it. Generally, the maximum amount
   of securities which can be sold by a control affiliate during a
   three-month period pursuant to Rule 144 is limited to the greater of
   one percent of the outstanding securities of the Company or the
   average weekly volume traded for the four week period prior to the
   date of filing the required notification of sale.
<PAGE>
                                      SIGNATURES

        In accordance with the Exchange Act, this report has been signed
   below on July 31, 2000 by the following persons on behalf of the
   registrant and in the capacities indicated.

   Registrant:    United Financial Mortgage Corp.


   Directors:                         By:  /S/ Joseph Khoshabe
                                           Joseph Khoshabe, President,
                                           Principal Executive Officer
                                           and a Director


                                      By:  /S/Steve Y. Khoshabe
                                           Steve Y. Khoshabe, Executive VP
                                           And Principal Accounting Officer


                                      By:  /S/ John A. Clark
                                           John A., Clark, Director


                                      By:  /S/ Bob Jones
                                           Bob Jones, Director


                                      By:  /S/ Anthony DiMucci
                                           Anthony DiMucci, Director


                                      By:  /S/ Robert S. Luce
                                           Robert S. Luce,
                                           Secretary and a Director
<PAGE>
                                  PART IV

   Item 13. Exhibits, Financial Statement Schedules, and Reports of Form
   8-K.
          (a)(1)    Financial Statements.

                    The following financial statements and notes thereto,
                    and the related Independent Auditor's Report, are
                    filed as part of this Form 10-K on Pages 11 to 21
                    hereof:

                    Independent Auditors' Report
                    Balance Sheets at April 30, 1999 and 2000
                    Statements of Operations for the years ended April 30,
                    1999 and 2000
                    Statements of Stockholders' Equity for the years ended
                    April 30, 1999 and 2000
                    Statements of Cash Flows for the years ended April 30,
                    1999 and 2000
                    Notes to Financial Statements
             (2)    Financial Statement Schedules.
                    All financial statement schedules have been omitted
                    because such schedules are not required or the
                    information required has been included in the
                    financial statements and notes thereto.
             (3)    Exhibits
                    The following exhibits are filed with this report or
                    incorporated by reference as set forth below.
             3.1    Certificate of Incorporation of the Registrant.*
             3.1.1  Certificate of Amendment of Certificate of Incorporation.*
             3.2    By-laws of the Registrant.*
             4.1    Description of specimen stock certificate representing
                    Common Stock.*
             10.1.1 Employment Agreement between the Registrant and
                    Joseph Khoshabe.*
             10.4   Non-Qualified and Incentive Stock Option Plan*
          ___________
          *Incorporated by reference from registrant's Registration
          Statement on Form SB-2 (No. 333/27037), which was declared
          effective by the Securities Exchange Commission on May 26,
          1998.

          (b)       Reports on Form 8-K

          The following reports on Form 8-K have been filed by the
          Company during the period covered by this report:

                                 Form 8-K dated 06/02/99
                                 Form 8-K dated 07/01/99
                                 Form 8-K dated 07/13/99
                                 Form 8-K dated 08/26/99
                                 Form 8-K dated 08/30/99
                                 Form 8-K dated 09/21/99
                                 Form 8-K dated 12/22/99
                                 Form 8-K dated 01/28/00
                                 Form 8-K dated 03/20/00
                                 Form 8-K dated 04/11/00
<PAGE>