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, 2001
                                      OR
   [   ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                       SECURITIES EXCHANGE ACT OF 1934
               For the transition period from              to
                         Commission File 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.....$14,941,675

 The aggregate market value  of the voting and  non-voting common equity held
 by non-affiliates was $1,563,187 on July 30, 2001.

      (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. 4,095,029.

      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  38  states.  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 and Nevada.

      The loans that the Company originates  and expects to service primarily
 are first mortgages secured by single (one to four units) family residences.
 In addition the Company  may originate, sell and  service  loans secured  by
 first mortgages  on  multi-family  residential  properties  (more  than four
 units).

      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  loan  servicing  division  produces  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, 2001, the Company's Retail
 Division operated thirteen (13) full service retail origination offices.  At
 such date, the  retail offices  were located  in three  (3) states  plus the
 Virgin Islands.  These  officer were staffed by  approximately 60 employees,
 including commission-based loan officers.  The  retail offices are currently
 located as  follows:  Oak  Brook,  Oak  Park,  Bensenville,  Mount Prospect,
 Countryside, Cicero, and Chicago(3), Illinois; Las Vegas, NV, Miami, FL, and
 the U.S.  Virgin Islands.   Wholesale  origination principally  is conducted
 from the Company's offices  in Oak Brook, Illinois,  Lombard, Illinois, Fair
 Oaks, Chatsworth, and Irvine, California.

 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.  This
 operating structure enables the Company to quickly enter new markets.

      The  Company's  Wholesale Division has  operations  in  Oak  Brook  and
 Lombard Illinois, and three locations in California;  Fair Oaks, Chatsworth,
 and  Irvine.  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.

      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.

      The Company's  underwriting guidelines  for "non-conforming"  loans are
 based upon the underwriting standards established 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.

      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, with the advise of
 unaffiliated advisors who are experts in respect to such portfolio's.

      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.

      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, 2001, the Company leased an aggregate of approximately 2,000 square feet
 in Lombard, Illinois, 1,146  square feet in Las  Vegas, Nevada; 1,475 square
 feet in Irvine, California; 3,380 square feet in  Chatsworth, California and
 1,572 square feet  in  Fair Oaks,  California.  The Company also has several
 other locations with significantly smaller lease committments. The aggregate
 annual  lease  payments on properties  leased by the Company as of April 30,
 2001 was  $485,146.  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.

      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,  2000,  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 increase to the authorized capital voting stock of the Company.


 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
 the  Chicago Stock Exchange ("CSX")  on May 27, 1998 at a price of $6.50 per
 share.

      The Company's Common Stock is traded on 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, 2000  through July 20, 2001  were $0.50 and
 $2.13, respectively.

      Holders.  As of July 20, 2001,  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, 2000  and April 30, 2001

       The fiscal  year ended  April 30,  2001  was a  period  of significant
 accomplishment  for  the  Company.    Loan   volume  and  revenues  increase
 substantially from year to year.  In fact, both revenue and loan volume were
 at all time highs in the year ended April 30, 2001.

        Commission and fee revenue  increased from $9,051,395  for the twelve
 months ended April 30, 2000 to $12,308,475 for the twelve months ended April
 30, 2001.  This is a percentage increase of approximately 36.0%.

        Interest income  increased  from $1,824,6033  for  the  twelve months
 ended April 30, 2000  to $2,563,961 for the  twelve months  ended  April 30,
 2001.  This increase was attributable to two  main factors;  and an increase
 in loan originations and higher interest income on invested capital.

       Salary and  commissions  expenses increased  from  $6,408,302  for the
 twelve months ended April 30, 2000 to $8,288,585 for the twelve months ended
 April 30, 2001.  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 $3,039,924 for the
 twelve months ended April 30, 2000 to $2,971,475 for the twelve months ended
 April 30, 2001.

       Depreciation and amortization expense increased  from $127,414 for the
 twelve months ended April 30,  2000 to $131,038 for  the twelve months ended
 April  30,  2001.    This  increase  principally  resulted  from  technology
 investments made during previous  fiscal years.  This  investment is in line
 with the Company's strategy of  technological advancement and infrastructure
 improvements.

      Interest expense increased from $1,439,021  for the twelve months ended
 April 30, 2000  to $2,509,979  for the twelve  months ended  April 30, 2001.
 This increase was the result of an increase in loan originations.

 Liquidity and Capital Resources

       During the twelve months ended April 30,  2000 and April 30, 2001, net
 cash generated(used)  by operating  activities was  $267,329  and $1,660,057
 respectively.  Net  cash generated by  operating activities  increased  from
 year to year largely due to  the fluctuation in net  income and the increase
 in accrued expenses and accounts payable.

       Net  cash  generated(used)  by  investing  activities  decreased  from
 ($528,945) for the fiscal  year ended April  30, 2000 to  ($338,258) for the
 fiscal year ended April 30, 2001.  The change in  cash from 2000 to 2001 was
 largely attributable to the purchase of two  properties in 2000 and the sale
 of one of  those in  2001.   This was  partially offset  by the  increase in
 retaining servicing rights on certain closed loans during the time periods.

       Cash flow  from  financing activities  for  the fiscal  year  2000 and
 fiscal year  2001 was  ($477,165) and  $565,768  respectively.   This change
 resulted largely  from  the  fluctuation in  loans  held  for  sale  and the
 associated notes payable on these loans.

       Therefore, the net cash flow from  operating, financing, and investing
 activities  was  ($738,781)  for  the  fiscal year  ended April 30, 2000 and
 $1,887,567 for the fiscal year ended April 30, 2001.

       Capital  expenditures  for  the   year  ended  April   30,  2001  were
 approximately $90,000, principally in technology and  to a lesser extent for
 the expansion of sales organization facilities.   These capital expenditures
 include a new accounting system  and a new secondary  marketing system.  The
 purchase  of  these  items  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.

       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

       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.  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, 2000 and 2001                         11-12

 Statement of Income for the years ended April 30, 2000 and 2001   13

 Statement of Stockholders' Equity for the years ended
   April 30, 2000 and 2001                                         14

 Statement of Cash Flows for the years ended April 30, 2000
   and 2001                                                        15

 Notes to Financial Statements                                    16-22

<PAGE>

                        INDEPENDENT AUDITOR'S REPORT

                       UNITED FINANCIAL MORTGAGE CORP.

      Financial Statements as of April 30, 2000 and April 30, 2001 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 Corporation  as of  April 30,  2000  and April  30, 2001,  and  the
 related statements of income,  stockholders' equity and  cash  flows for the
 periods ended April 30, 2000 and April 30, 2001.  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 Corporation as of April 30, 2000 and April 30, 2001 and the results
 of its  operations  and  its  cash  flows for  the  periods  then  ended  in
 conformity with generally accepted accounting principles.

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

 Des Plaines, Illinois
 July 25, 2001

 Respectfully submitted,

 By: /S/ Craig Shaffer
 Craig Shaffer and Associates, Ltd.
 Certified Public Accountants

<PAGE>
<TABLE>

                       United Financial Mortgage Corp.
                               Balance Sheet
 =============================================================================

                                                 Year Ended       Year Ended
                                               April 30, 2000   April 30, 2001
                                                 -----------     ------------
 <S>                                            <C>             <C>
 Assets
 Current Assets:
    Cash                                        $  3,606,156    $   5,493,723
    Loans Held for Sale                           31,641,309       53,096,619
    Accounts Receivable                              204,623          154,638
    Due from Employees                                12,401           21,873
    Deferred Tax Asset                                75,079           32,271
    U.S. Savings Bond                                  2,000                0
    Note Receivable                                  125,599           71,500
    Prepaid Expense                                  132,663          162,979
                                                 -----------     ------------
        Total Current Assets                    $ 35,799,830    $  59,033,603


 Furniture, Fixtures & Equipment:
    Cost                                        $    705,669    $     793,275
    Accumulated Depreciation                        (365,801)        (480,168)
                                                 -----------     ------------
    Total Furniture, Fixtures & Equipment       $    339,868    $     313,107


 Other Assets:
    Servicing Rights                            $    328,574    $     591,593
    Land Investments                                 234,507          126,000
    Security Deposits                                 23,417           43,954
    Investments                                       68,472          164,612
    Goodwill Net                                     123,562          114,409
                                                 -----------     ------------
        Total Other Assets                      $    778,532    $   1,040,568


               Total Assets                     $ 36,918,230    $  60,387,278
                                                 ===========     ============

             The accompanying notes are an integral part of this statement

</TABLE>
<PAGE>
<TABLE>

                        United Financial Mortgage Corp.
                                Balance Sheet
 =============================================================================

                                                 Year Ended       Year Ended
                                               April 30, 2000   April 30, 2001
                                                 -----------     ------------
 <S>                                            <C>             <C>
 Liabilities and Stockholders' Equity
 Current Liabilities:
    Accounts Payable                            $    254,793    $     511,372
    Leases Payable                                    14,093            8,086
    Accrued Expenses                                 519,659          687,758
    Taxes Payable                                          0           48,284
    Deferred Income Taxes                                  0          149,590
    Dividends Payable                                 38,500                0
    Escrow Payable                                    13,627           79,789
    Notes Payable - Current                       29,568,688       51,444,943
                                                 -----------     ------------
             Total Current Liabilities          $ 30,409,360    $  52,929,822

 Non-Current Notes Payable:
    Leases Payable                              $     13,341    $       5,254
    Deferred Income Tax                         $          0    $      22,098
                                                 -----------     ------------
             Total Non-Current Liabilitie       $     13,341    $      27,352

                      Total Liabilities           30,422,701       52,957,174

 Stockholders' Equity
    Common Shares, 20,000,000 Authorized, No
      Par Value, Shares Issued and Outstanding;
      3,900,029 at April 30, 2000 and 4,095,029
      at April 30, 2001.                        $  6,536,403    $   6,633,903
    Treasury Stock, 8,880 Shares at April 30,
      2000 and 35,080 Shares at April 30, 2001
      Recorded at Cost                               (25,465)         (56,647)
    Preferred Shares, 5,000,000 Authorized,
      No Par Value, Series A Redeemable Shares
      63 Issued and Outstanding April 30, 2000
      and April 30, 2001.                            315,000          315,000
    Retained Earnings                               (330,409)         537,848
                                                 -----------     ------------
             Total Stockholders' Equity         $  6,495,529    $   7,430,104


  Total Liabilities and Stockholders' Equity    $ 36,918,230    $  60,387,278
                                                 ===========     ============

             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, 2000   April 30, 2001
                                                 -----------     ------------
 <S>                                            <C>             <C>
 Revenues:
    Commissions and Fees                        $  9,051,395    $  12,308,475
    Interest Income                                1,824,603        2,563,961
    Other Income and Expense                          20,326           69,239
                                                 -----------     ------------
               Total Revenues                   $ 10,896,324    $  14,941,675



 Expenses:
    Salaries & Commissions                      $  6,408,302    $   8,288,585
    Selling & Administrative                       3,039,924        2,971,475
    Depreciation and Amortization                    127,414          131,038
    Interest Expense                               1,439,021        2,509,979
                                                 -----------     ------------
               Total Expenses                   $ 11,014,661    $  13,901,077



 Income (Loss) Before Income Taxes              $   (118,337)   $   1,040,598

       Income Tax Provision                           75,079          172,341

 Net Income (Loss)                                   (43,258)         868,257

       Less Dividends Paid on Preferred Stock        (38,500)               0
                                                 -----------     ------------
 Net Income (loss) Applicable to
   Common Shareholders                          $    (81,758)   $     868,257
                                                 ===========     ============


    Basic Net Income (loss) Per Share           $      (0.02)   $         .21
     Diluted Net Income Per Share               $      (0.02)   $         .20

     Shares used in computation of basic
       net income per share                        3,900,029        4,095,029
     Shares used in computation of diluted
       net income per share                        4,200,029        4,337,529


             The accompanying notes are an integral part of this statement

</TABLE>
<PAGE>
<TABLE>
                       United Financial Mortgage Corp.
                      Statement of Stockholders' Equity
                   For the Years Ended April 30, 2000 and 2001
 =============================================================================================

                                 Common       Preferred   Treasury     Retained
                                  Stock         Stock       Stock       Earnings       Total
                               ----------    ---------   ---------    ----------    ----------
 <S>                          <C>           <C>         <C>          <C>           <C>
 Balance, April 30, 1999      $ 6,536,403   $  315,000  $   (7,071)  $  (248,651)  $ 6,595,681

 Repurchase of 7,070 Shares   $         0   $           $  (18,394)  $             $  (18,394)

 Dividend Declared                                                       (38,500)     (38,500)

 Net Loss for Year                                                       (43,258)     (43,258)
                               ----------    ---------   ---------    ----------    ----------
 Balance, April 30, 2000      $ 6,536,403   $  315,000  $  (25,465)  $  (330,409)  $ 6,495,529

 Repurchase of 26,200 Shares  $         0   $           $  (31,182)  $             $  (31,182)

 Exercise of Warrants              97,500                                              97,500

 Net Income for Year                                                     868,257      868,257
                               ----------    ---------   ---------    ----------    ----------
 Balance, April 30, 2001      $ 6,633,903   $  315,000  $  (56,647)  $   537,848   $ 7,430,104
                               ==========    =========   =========    ==========    ==========


             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, 2000  April 30, 2001

                                                  -----------     ------------
 <S>                                             <C>             <C>
 Cash Flows from Operating Activities
 Net Income or (Loss)                            $    (43,258)   $     868,257
 Adjustments to Reconcile Net Income to Net
 Cash Provided by Operating Activities:
    Depreciation                                      127,414          131,038
 Changes in:
    Prepaid & Other Current Assets                    157,971           12,197
    Accrued Expenses & Other Current Liabilities       27,661          283,643
    Accounts Payable                                   18,841          256,579
    Deposits                                           53,779          (20,537)
    Deferred Taxes                                    (75,079)         128,880
                                                  -----------     ------------
 Net Cash Provided by Operating Activities       $    267,329    $   1,660,057

 Cash Flows from Investing Activities
 Investments                                     $    (62,722)   $     (96,140)
 Land Purchase                                       (234,507)         108,507
 Purchase of Fixed Assets                             (89,122)         (87,606)
 Servicing Rights                                    (142,594)        (263,019)
                                                  -----------     ------------
 Net Cash Provided from Investing Activities     $   (528,945)   $    (338,258)

 Cash Flows from Financing Activities
 Stock Repurchase                                $    (18,394)   $     (31,182)
 Notes Receivable                                     (15,599)          54,099
 Changes in Short Term Debt                             1,798           (6,007)
 Changes in Long Term Debt                            (18,210)          (8,087)
 Officers Loans                                         2,439                0
 Deferred Advisor Fees                                 78,000                0
 Common Stock Proceeds Net                                  0           97,500
 Mortgage Loans Made                                2,338,245      (21,455,310)
 Changes in Bank Line of Credit                    (2,806,944)      21,876,255
 Preferred Stock Dividend                             (38,500)          38,500
                                                  -----------     ------------
 Net Cash Provided (Used) by
   Financing Activities                          $   (477,165)   $     565,768

 Increase or (Decrease) in Cash                  $   (738,781)   $   1,887,567

 Cash at Beginning of Period                     $  4,344,937    $   3,606,156
                                                  -----------     ------------
 Cash at End of Period                           $  3,606,156    $   5,493,723
                                                  ===========     ============
 Supplemental Information:
    Interest Paid                                $  1,370,444    $   2,667,202
    Taxes                                              63,398                0
                                                  -----------     ------------
                                                 $  1,433,842    $   2,667,202


             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  Corporation,  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, Missouri,  Nevada, New Mexico,  North Carolina,
 Oregon, South Carolina, Texas, Utah, Virginia, Washington and Wisconsin. 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 for  Federal  National
 Mortgage Association and the Federal Home Loan Mortgage Corporation.

 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

 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 original maturity of three months or less.

 Accounts Receivable

      Accounts receivable consist  of advances made  in connection with  loan
 origination activities.
<PAGE>

                      United Financial Mortgage Corp.
                    Notes to Audited Financial Statements
 ============================================================================

 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, usually  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 receivable.

 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.

                                          April 30, 2000     April 30, 2001
                                              --------            --------
      Furniture                              $ 215,785           $ 240,412
      Equipment                              $ 421,402           $ 484,381
      Equipment Under Capital Lease          $  68,482           $  68,482
                                              --------            --------
                                               705,669             793,275


 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.

 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 bases 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.
<PAGE>


                      United Financial Mortgage Corp.
                    Notes to Audited Financial Statements
 ============================================================================

 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. Therefore, the Company has adopted the new requirements.

      In June 1996, the FASB issued  SFAS No. 125, "Accounting for  Transfers
 and Servicing of Financial Assets and Extinguishments of liabilities."  SFAS
 No. 125 supersedes SFAS No. 122 and is effective prospectively for transfers
 and  servicing  of  financial  assets  and  extinguishments  of  liabilities
 occurring  after  December  31, 1996.  Under  SFAS  No.  125,  servicing  of
 mortgage loans becomes a distinct asset or liability only when contractually
 separated from the underlying loans by  sale or securitization of the  loans
 with servicing retained or separate purchase or assumption of the  servicing
 rights.  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  $85
 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, 2001
    $23 million mortgage warehouse credit facility at a
    commercial bank; interest at Libor plus 160 basis
    points expires 10/1/2001.                                   $ 17,183,830

    $2 million mortgage warehouse credit facility at a
    commercial bank; interest Libor plus 160 basis
    points expires 10/1/2001.                                      1,234,863

    $25 million mortgage warehouse credit facility at a
    commercial bank; interest commercial paper rate
    plus 150 basis points expires 04/30/2001.  This is
    not being renewed.                                             6,239,002

    $35 million mortgage warehouse credit facility at a
    commercial bank; interest Libor plus 145 basis
    points expires 09/01/2001.                                    26,394,703
                                                                 -----------
                     Total Warehouse Lines                      $ 51,052,398

    The company also has a short term note at 8% interest
    secured by a certificate of deposit in the amount of
    $408,000.                                                        392,545
                                                                 -----------
                     Total Short Term Credit                    $    392,545

                          Total                                 $ 51,444,943
                                                                 ===========


 Retirement Plan

      The Company has a 401K plan that all eligible employees may participate
 in. The plan is 100% contributory.
<PAGE>


                      United Financial Mortgage Corp.
                    Notes to Audited Financial Statements
 ============================================================================

 Lease Commitments

      The Company  conducts  its operations  from  leased premises  and  with
 equipment under several operating  leases.  Total  rent expense under  these
 leases  was  approximately $459,783  for the year ended  April 30, 2000  and
 $485,146 for the year ended April 30, 2001.

      Future operating rental payments for the next five fiscal years
      is as follows:

                  Year Ending April 30           Operating Leases
                  --------------------           ----------------
                          2002                      $ 508,182
                          2003                        409,500
                          2004                        312,296
                          2005                        184,358
                          2006                         22,636
                                                    ---------
                                                   $1,436,972

      Future lease payments capital leases for the next five fiscal years
      is as follows:

                  Year Ending April 30           Operating Leases
                  --------------------           ----------------
                          2002                     $    9,732
                          2003                          5,415
                          2004                          5,415
                          2005                            451
                                                    ---------
                               Total               $   21,013
                         Less Interest                  7,673
                                                    ---------
                         Less Short Term                8,086
                                                    ---------
                         Long Term                 $    5,254
                                                    =========

 Income Taxes

      The income  tax provision  consists of  the following  for the  periods
 ended April 30:

                                    2000               2001
                                  --------          ---------
           Current:
                Federal          $     -0-         $   40,040
                State                  -0-              8,244
                                  --------          ---------
                                 $     -0-         $   48,284

           Deferred:
                Federal          $ (62,261)        $  102,876
                State              (12,818)            21,181
                                  --------          ---------
                                 $ (75,079)        $  124,057

           Total                 $ (75,079)        $  172,341
                                  ========          =========
<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:
                                              2000              2001
                                           ----------         ---------
      Contributions                       $     1,283        $    1,283
      Loss carry-forward                     (282,627)                0
      Accelerated depreciation                (34,766)          (44,196)
      Deferred Receivables                    165,951          (299,180)
      Deferred Expenses                             0            64,542
                                           ----------         ---------
      Deferred Tax Asset (Liability)         (150,159)         (278,834)
      Valuation Allowance                     (75,080)          139,417
                                           ----------         ---------
      Net Deferred Tax Asset (Liability)  $  (270,599)       $ (139,417)
                                           ==========         =========

      The effective tax rate for the  periods ended April 30, 2000 and  April
 30, 2001: the statutory Federal tax rate 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 paid  for the  year  ended  April 30,  1999 and  a
 dividend of $38,500 was paid for the year ended April 30, 2000.

 Stockholders' Equity

    Warrants

      At April  30,  2001, the  Company  had total  warrants  outstanding  to
 purchase  80,000 shares of the Company's  Common Stock.  The exercise  price
 of the  warrants are  $7.80  per share.  Warrants  for 80,000  shares expire
 May 2003.

      The Company  has  reserved  80,000  common  shares  for  issuance  upon
 exercise of all warrants.

<PAGE>

                      United Financial Mortgage Corp.
                    Notes to Audited Financial Statements
 ============================================================================


      In March of 1999, the company started a stock repurchase program. As of
 April 30, 2001, the Company has purchased 35,080 shares.

 Servicing

      During the  recent  period  ended  April  30,  2001,  the  Company  has
 continued to build  a servicing  portfolio.  As  of balance  sheet date  the
 servicing portfolio was thirty three  million, eight hundred five  thousand,
 three hundred twenty eight dollars ($33,805,328) 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  issueable
 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 fifth 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.

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

      During the period ending  April 30, 2001,  the company granted  options
 for 65,000 more shares at 6.50 per share.

      At April 30, 2001, the Company  had reserved 500,000 common shares  for
 issuance upon exercise of all options.
<PAGE>


                      United Financial Mortgage Corp.
                    Notes to Audited Financial Statements
 ============================================================================


 Contingencies

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

 Expansion

      On October  9,  1998, the  Company  purchased the  assets  of  Mortgage
 Service of America  for $187,291 under  the purchase  method of  accounting.
 Mortgage Service of  America is in  the mortgage business  and does  primary
 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 Mortgage Service  of America, it  is not possible  to present a  pro
 forma combined financial statement. If included, management does not believe
 it would present a material change.

 Credit Risk

 Financial instruments that potentially subject the Company to credit risk
 include cash balances at banks that exceeded the related federal deposit
 insurance by $9,112,598 at April 30, 2001.
<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:

                                          Year 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      (0.0209)

 Effect of Dilutive Securities
    Options and Warrants                              300,000

 Diluted Earnings Per Share
 Income Available to Common
    Shareholders                   (81,758)         4,200,029      (0.0194)


                                          Year ended April 30, 2001
                                          -------------------------
                                    Income          Shares        Per Share
                                  (Numerator)    (Denominator)     Amount
                                  -----------    -------------    ---------
 Basic Earnings Per Share
 Income Available to Common
   Shareholders                    868,257          4,095,029        .2120

 Effect of Dilutive Securities
    Options and Warrants                              242,500

 Diluted Earnings Per Share
 Income Available to Common
    Shareholders                   868,257          4,337,529        .2002


<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)
 ---------------------------   ----      -------   -------    ---------------
 Joseph Khoshabe, President    2001     $250,000  $157,000        $10,354
                               2000     $250,000        -0-       $10,354
                               1999     $244,166  $ 47,561        $11,565
                               1998     $180,000        -0-       $ 3,161
                               1997     $180,000        -0-       $ 3,161
 Steve Y. Khoshabe
 Executive Vice President      2001     $140,000        -0-       $ 3,739
                               2000     $ 90,000        -0-       $ 3,739
                               1999     $ 86,500        -0-       $ 3,495
                               1998     $ 50,063        -0-       $ 2,210
                               1997     $ 46,093        -0-       $ 2,210

 _____________________
 (1)  Includes: $10,354 for annual health insurance premiums for Mr. Joseph
      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.


 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
      ------------------------------------     ---------    -----------------
      J.K. Trust                               2,531,842         61.8%
      c/o United Financial Mortgage Corp.
      600 Enterprise Drive
      Suite 206
      Oak Brook, Illinois 60521

      Larry Woznicki                             384,870          9.4%
      30 S. Wacker
      Chicago, Illinois 60606
 ______________________

      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.


 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.

      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 30 2001 by the following persons on behalf of the registrant and in
 the capacities indicated.

 Registrant:    United Financial Mortgage Corp.


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

                                    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/ Tony DiMucci
                                    ---------------------------------------
                                    Tony DiMucci,  Director


                                    By:  /S/ Bob Jones
                                    ---------------------------------------
                                    Bob Jones,  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, 2000 and 2001
                Statements of Operations for the years ended April 30, 2000
                and 2001
                Statements of Stockholders' Equity for the years ended April
                30, 2000 and 2001
                Statements of Cash Flows for the years ended April 30, 2000
                and 2001
                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.*
        10.4.1  Certificate of Amendment of Certificate of Incorporation.*
         3.2    By-laws of the Registrant.*
        10.4    Description of specimen stock certificate representing Common
                Stock.*
        10.4.1  Employment Agreement between the Registrant and Joseph
                Khoshabe.*
        10.5    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 08/03/00
                               Form 8-K dated 08/21/00
                               Form 8-K dated 09/20/00
                               Form 8-K dated 12/15/00
                               Form 8-K dated 03/16/01
                               Form 8-K dated 03/23/01