<PAGE>   1

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

                                   FORM 10-Q

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

For the quarterly period ended September 30, 1995

                                       OR

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

For the transition period from                to 
                               --------------    -------------

Commission file number 1-6868

                          LOMAS FINANCIAL CORPORATION
                          ---------------------------
             (Exact name of registrant as specified in its charter)

               Delaware                                       75-1043392    
   -----------------------------------                    ------------------
     (State or other jurisdiction of                       (I.R.S. Employer
     incorporation or organization)                       Identification No.)

             1600 Viceroy Drive
               Dallas, Texas                                       75235    
-----------------------------------------------                -------------
   (Address of principal executive offices)                      (Zip Code)

                                 (214) 879-4000                          
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
                            YES    X      NO  
                                  ---          ---

         APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                        DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
                            YES    X      NO  
                                  ---          ---

On October 10, 1995, the Registrant and certain of its subsidiaries filed
bankruptcy proceedings under Chapter 11 of the Federal Bankruptcy Code in the
District of Delaware.

                     APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares outstanding of each of the issuer's classes of common
stock as of November 10, 1995:  Common Stock, $1 par value -- 20,149,231
shares.
<PAGE>   2
                  LOMAS FINANCIAL CORPORATION AND SUBSIDIARIES

               FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1995

                                     INDEX

<TABLE>
<CAPTION>
                                                                                                         PAGE
                                                                                                         ----
<S>      <C>                                                                                            <C>
                                             PART I -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)

         Consolidated Balance Sheet -- September 30, 1995, and June 30, 1995  . . . . . . . . . . . . . . .  2
         Statement of Consolidated Operations -- Quarter Ended September 30, 1995 and 1994  . . . . . . . .  3
         Statement of Consolidated Cash Flows -- Quarter Ended September 30, 1995 and 1994  . . . . . . . .  4
         Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . .  5 - 7

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         Results of Operations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8 - 11
         Liquidity and Capital Resources  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11

                                               PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11-12


</TABLE>



                                       1
<PAGE>   3
                        PART I -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

                           CONSOLIDATED BALANCE SHEET

                  LOMAS FINANCIAL CORPORATION AND SUBSIDIARIES
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                           September 30, 1995     June 30, 1995
                                                                           ------------------     -------------
                                                                              (Unaudited)            (Note)
<S>                                                                           <C>                 <C>
                                                          ASSETS
                                                          ------

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . .     $    28,266         $    19,966

First mortgage loans held for sale  . . . . . . . . . . . . . . . . . . .             608             345,039
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          16,786             282,318
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          14,478              77,248
Fixed assets--net . . . . . . . . . . . . . . . . . . . . . . . . . . . .          36,117              52,579
Foreclosed real estate  . . . . . . . . . . . . . . . . . . . . . . . . .              --               6,348
                                                                              -----------         -----------
                                                                                   67,989             763,532
Less allowance for losses . . . . . . . . . . . . . . . . . . . . . . . .          (4,574)            (32,481)
                                                                              -----------         ----------- 
                                                                                   63,415             731,051

Purchased future mortgage servicing income rights--net  . . . . . . . . .              --             346,958
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . .          16,768              23,545
Net assets of discontinued operations . . . . . . . . . . . . . . . . . .          33,800              33,550
Assets held for sale  . . . . . . . . . . . . . . . . . . . . . . . . . .         502,570                  --
                                                                              -----------         -----------
                                                                              $   644,819         $ 1,155,070
                                                                              ===========         ===========

Escrow, agency and fiduciary funds--see contra  . . . . . . . . . . . . .     $   678,529         $   641,519
                                                                              ===========         ===========

                                      LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                                      ----------------------------------------------

Liabilities:
    Accounts payable and accrued expenses   . . . . . . . . . . . . . . .     $    49,258         $    57,171
    Notes payable   . . . . . . . . . . . . . . . . . . . . . . . . . . .              --             591,089
    Term notes payable  . . . . . . . . . . . . . . . . . . . . . . . . .         378,436             378,770
    Senior convertible notes payable  . . . . . . . . . . . . . . . . . .         139,918             139,918
    Liabilities to be assumed in sale   . . . . . . . . . . . . . . . . .         283,310                  --
                                                                              -----------         -----------
                                                                                  850,922           1,166,948
                                                                              -----------         -----------

Stockholders' equity (deficit):
    Common stock--20,149 and 20,146 shares issued and
      outstanding, respectively   . . . . . . . . . . . . . . . . . . . .          20,149              20,146
    Other paid-in capital   . . . . . . . . . . . . . . . . . . . . . . .         309,763             309,761
    Retained earnings (deficit)   . . . . . . . . . . . . . . . . . . . .        (536,015)           (341,785)
                                                                              -----------         ----------- 
                                                                                 (206,103)            (11,878)
                                                                              -----------         -----------
                                                                              $   644,819         $ 1,155,070
                                                                              ===========         ===========

Liability for escrow, agency and fiduciary funds--see contra  . . . . . .     $   678,529         $   641,519
                                                                              ===========         ===========
</TABLE>

Note:    The balance sheet at June 30, 1995, as presented is derived from the
         audited financial statements at that date.

See notes to consolidated financial statements.





                                       2
<PAGE>   4
                STATEMENT OF CONSOLIDATED OPERATIONS (UNAUDITED)

                  LOMAS FINANCIAL CORPORATION AND SUBSIDIARIES
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                                 Quarter Ended September 30  
                                                                              -------------------------------
                                                                                  1995                1994   
                                                                              -----------         -----------
<S>                                                                           <C>                 <C>
Revenues:
    Mortgage servicing  . . . . . . . . . . . . . . . . . . . . . . . . .     $    30,236         $    32,914
    Commissions and fees  . . . . . . . . . . . . . . . . . . . . . . . .           6,741               8,131
    Interest  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           7,170               5,768
    Investment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           8,857               3,666
    Gain on sales   . . . . . . . . . . . . . . . . . . . . . . . . . . .              60               3,179
    Other   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           2,262                 463
                                                                              -----------         -----------
                                                                                   55,326              54,121
                                                                              -----------         -----------
Expenses:
    Interest  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          22,495              18,366
    Personnel   . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          17,727              15,206
    Depreciation and amortization   . . . . . . . . . . . . . . . . . . .          15,165              16,202
    Other operating   . . . . . . . . . . . . . . . . . . . . . . . . . .          10,006               9,797
    Provision for losses  . . . . . . . . . . . . . . . . . . . . . . . .          22,003               1,900
                                                                              -----------         -----------
                                                                                   87,396              61,471
                                                                              -----------         -----------

Loss from continuing operations before loss on assets held for sale   . .         (32,070)             (7,350)
Loss on assets held for sale net of liabilities to be assumed . . . . . .        (162,160)                 --
                                                                              -----------         -----------
    Loss from continuing operations   . . . . . . . . . . . . . . . . . .        (194,230)             (7,350)
Loss from discontinued operations . . . . . . . . . . . . . . . . . . . .              --              (5,500)
                                                                              -----------         ----------- 
    Net loss  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     $  (194,230)        $   (12,850)
                                                                              ===========         =========== 

Loss per share:
    Loss from continuing operations   . . . . . . . . . . . . . . . . . .     $     (9.63)        $      (.37)
    Net loss  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     $     (9.63)        $      (.64)
    Average number of shares  . . . . . . . . . . . . . . . . . . . . . .          20,167              20,135

</TABLE>

See notes to consolidated financial statements.





                                       3
<PAGE>   5
                STATEMENT OF CONSOLIDATED CASH FLOWS (UNAUDITED)

                  LOMAS FINANCIAL CORPORATION AND SUBSIDIARIES
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                 Quarter Ended September 30  
                                                                              -------------------------------
                                                                                  1995                1994   
                                                                              -----------         -----------
<S>                                                                           <C>                 <C>
Operating activities:
    Net loss  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     $  (194,230)        $   (12,850)
    Adjustments to reconcile net loss to net cash provided by operating
      activities before working capital changes:
         Loss from discontinued operations  . . . . . . . . . . . . . . .              --               5,500
         Loss on assets held for sale . . . . . . . . . . . . . . . . . .         162,160                  --
         Depreciation and amortization  . . . . . . . . . . . . . . . . .          15,165              16,202
         Provision for losses . . . . . . . . . . . . . . . . . . . . . .          22,003               1,900
         (Gain) loss on sale of mortgage servicing rights . . . . . . . .             207              (1,734)
                                                                              -----------         ----------- 
             Cash provided by operations before working capital changes .           5,305               9,018
    Net change in first mortgage loans held for sale  . . . . . . . . . .          58,435              88,735
    Net change in sundry receivables, payables, and other assets  . . . .          (2,010)            (19,114)
    Net cash used by discontinued operations  . . . . . . . . . . . . . .            (676)             (5,899)
                                                                              -----------         ----------- 
             Net cash provided by operating activities  . . . . . . . . .          61,054              72,740
                                                                              -----------         -----------

Investing activities:
    Purchases of investments  . . . . . . . . . . . . . . . . . . . . . .          (2,067)             (1,947)
    Maturities/sales of investments   . . . . . . . . . . . . . . . . . .         255,117              52,376
    Purchases of loans from pools   . . . . . . . . . . . . . . . . . . .          (1,048)             (3,734)
    Sales of foreclosed real estate   . . . . . . . . . . . . . . . . . .           1,400               3,095
    Net purchases of fixed assets   . . . . . . . . . . . . . . . . . . .             941                (619)
    Purchases of future mortgage servicing income rights  . . . . . . . .         (14,320)             (6,623)
    Sales of future mortgage servicing income rights  . . . . . . . . . .          12,167              15,636
    Sale of subsidiary  . . . . . . . . . . . . . . . . . . . . . . . . .           3,903                  --
    Other   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              --                  27
    Net cash provided by discontinued operations  . . . . . . . . . . . .           5,092              67,897
                                                                              -----------         -----------
             Net cash provided by investing activities  . . . . . . . . .         261,185             126,108
                                                                              -----------         -----------

Financing activities:
    Net repayments of notes payable   . . . . . . . . . . . . . . . . . .        (309,168)           (116,454)
    Term debt repayments  . . . . . . . . . . . . . . . . . . . . . . . .            (334)             (1,946)
    Net cash used by discontinued operations  . . . . . . . . . . . . . .              --             (43,239)
                                                                              -----------         ----------- 
             Net cash used by financing activities  . . . . . . . . . . .        (309,502)           (161,639)
                                                                              -----------         ----------- 

Net increase in cash and cash equivalents . . . . . . . . . . . . . . . .          12,737              37,209
Net change in cash of discontinued operations . . . . . . . . . . . . . .          (4,437)            (11,295)
Cash and cash equivalents at beginning of period  . . . . . . . . . . . .          19,966               7,206
                                                                              -----------         -----------
Cash and cash equivalents at end of period  . . . . . . . . . . . . . . .     $    28,266         $    33,120
                                                                              ===========         ===========

Cash payments for:
    Interest  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     $    11,114         $     6,826
    Federal income tax  . . . . . . . . . . . . . . . . . . . . . . . . .              --                  --

</TABLE>

See notes to consolidated financial statements.





                                       4
<PAGE>   6
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                  LOMAS FINANCIAL CORPORATION AND SUBSIDIARIES

                               SEPTEMBER 30, 1995


NOTE A -- BASIS OF FINANCIAL STATEMENT PRESENTATION

    The accompanying unaudited consolidated financial statements of Lomas
Financial Corporation ("LFC") and its subsidiaries (collectively, the
"Company") have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and Rule 10-01 of Regulation S-X.  They do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.  In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation at September 30, 1995, have been included.  Operating
results for the quarter ended September 30, 1995 are not necessarily indicative
of the results that may be expected for the fiscal year ended June 30, 1996.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the annual report on Form 10-K of the Company for
the fiscal year ended June 30, 1995.

    The unaudited consolidated financial statements have been prepared in
accordance with general accepted accounting principles applicable to a "going
concern" which contemplates the realization of assets and the liquidation of
liabilities in the ordinary course of business.  Because of the Chapter 11
filings described below, such realization of assets and the liquidation of
liabilities is subject to significant uncertainties.  Under Chapter 11
proceedings, the right of and the ultimate payments by the Company to
prepetition creditors and to the Company's stockholders may be substantially
altered.  This is likely to result in claims being liquidated in the Chapter 11
proceedings at less than 100% of their face value.  Certain claims in Chapter
11 may be asserted as having a priority in the plan of reorganization.  The
Company has not proposed a plan of reorganization at this time and it is not
possible to predict the length of time the Company will operate under the
protection of Chapter 11.

NOTE B -- CHAPTER 11 PROCEEDINGS

    On October 10, 1995, LFC, Lomas Mortgage USA, Inc. ("Lomas Mortgage") and
two other insignificant subsidiaries of LFC (collectively the "Debtor
Corporations") filed separate voluntary petitions for reorganization under
Chapter 11 of the Federal Bankruptcy Code in the District of Delaware.  The
petitioning subsidiaries are Lomas Information Systems, Inc. and Lomas
Administrative Services, Inc., both of which are inactive and have relatively
minor amounts of assets and liabilities.  The Chapter 11 cases are being
jointly administered, with the Debtor Corporations managing their businesses in
the ordinary course as debtors-in-possession subject to the control and
supervision of the Bankruptcy Court.

    On October 23, 1995, an official unsecured creditors committee was formed
and is acting in the Chapter 11 proceedings.  Official committees have the
right to review and object to certain business transactions and are expected to
participate in the formulation of any plan or plans of reorganization.
Reference is made to "Item 3. Legal Proceedings" in the Company's annual report
on Form 10-K for the year ended June 30, 1995 for more information.


NOTE C -- ASSETS HELD FOR SALE AND LIABILITIES TO BE ASSUMED

    On October 2, 1995, the Company closed the sale to First Nationwide
Mortgage Corporation ("First Nationwide") of Lomas Mortgage's GNMA servicing
portfolio (approximately $7.9 billion), its investment in Lomas Mortgage
Partnership and its loan production business including its mortgage loans held
for sale and the payment of the related warehouse lines of credit (the "Phase I
Sale").  The purchase price for the Phase I Sale was approximately $102





                                       5
<PAGE>   7
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)

million (less $10 million which will be used to pay the Company's expense for
transferring the servicing), subject to certain adjustments, the payment of
certain warehouse indebtedness and the assumption of certain other liabilities.
Cash of $35 million was paid at closing of which $18.8 million was applied to
terminate the balance of Lomas Mortgage's swaps and $12 million was escrowed
with FNMA in connection with certain recourse servicing to be sold in the
proposed sale described in the following paragraph.  Approximately $43 million
is expected to be paid on February 1, 1996, with the final payment of the
balance due on October 2, 1996.

    In October 1995, the Company also reached a second agreement with First
Nationwide to sell substantially all of the remaining servicing portfolio
(approximately $12 billion) and certain other assets of Lomas Mortgage (the
"Phase II Sale"). The purchase price for the proposed sale will be
approximately $137 million based on September 30, 1995 balances (of which up to
$10 million will be used to pay the Company's expense for transferring the
servicing), subject to certain adjustments and the assumption of certain
liabilities.  The proposed transaction is subject to higher and better offers
and approval by the Bankruptcy Court.

    The assets held for sale and liabilities to be assumed for the Phase I and
Phase II Sales except for purchased mortgage servicing income rights ("PMSRs")
are carried at their net book value which is assumed to be the market value.
The PMSRs have been written down to market value (based on Phase I and Phase II
Sales prices).  The Company recognized a loss of approximately $162.2 million
during the quarter ended September 30, 1995.

    At September 30, 1995, assets held for sale and liabilities to be assumed
were as follows (in thousands):

<TABLE>
<CAPTION>
                                                                     Phase I        Phase II
                                                                      Sale            Sale            Total  
                                                                  ------------    ------------    -----------
         <S>                                                      <C>             <C>             <C>
         Assets held for sale:
             Cash . . . . . . . . . . . . . . . . . . . . . .     $         --    $     1,221     $     1,221
             First mortgage loans held for sale . . . . . . .          286,235              --        286,235
             Receivables  . . . . . . . . . . . . . . . . . .            7,706         45,980          53,686
             Investments  . . . . . . . . . . . . . . . . . .            4,302          9,121          13,423
             Fixed assets . . . . . . . . . . . . . . . . . .               --            190             190
             Foreclosed real estate . . . . . . . . . . . . .               --          5,728           5,728
             Purchased mortgage servicing income rights . . .           75,769         89,835         165,604
             Prepaids and other assets  . . . . . . . . . . .              120          2,981           3,101
             Allowance for losses . . . . . . . . . . . . . .           (6,107)        (20,511)       (26,618)
                                                                  ------------    ------------    ----------- 
                                                                  $    368,025    $    134,545    $   502,570
                                                                  ============    ============    ===========
         Liabilities to be assumed:
             Accounts payable and accrued expenses  . . . . .     $      1,828    $     7,407     $     9,235
             Notes payable  . . . . . . . . . . . . . . . . .          274,075              --        274,075
                                                                  ------------    ------------    -----------
                                                                  $    275,903    $     7,407     $   283,310
                                                                  ============    ===========     ===========
</TABLE>

    In addition, land and buildings that are included in fixed assets in the
consolidated balance sheet in the amount of $25.2 million are also held for
sale.

NOTE D -- TERMINATION OF REMAINING REVERSE INTEREST RATE SWAPS

    During the September 1995 quarter, the Company terminated $155 million
notional amount of its outstanding reverse interest rate swaps.  The Company
paid the counterparty $6.0 million in cash and incurred a loss of $4.4 million
of which $1.6 million was recognized immediately and the remaining loss of $2.8
million was deferred.

    On October 2, 1995, the Company terminated $485 million notional amount of
its remaining reverse interest swaps and paid the counterparty $18.8 million in
cash which came from the sale of certain assets of Lomas Mortgage





                                       6
<PAGE>   8
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)

to First Nationwide as described in "NOTE C" to the consolidated financial
statements.  Loss from the termination was $14.3 million.  The Company
recognized $5.0 million of the expected loss during the quarter ended September
30, 1995.  At September 30, 1995, the Company had an outstanding fixed rate
debt of $518 million which was hedged by the reverse interest rate swaps;
therefore, the remaining loss was deferred.  As a result of the Chapter 11
filing on October 10, 1995, the Company wrote off the net deferred debits of
$9.1 million in October 1995.

    Since the interest rate swap program's inception in July 1992 and through
its termination in October 1995, the swap program generated net cash of
approximately $4.5 million.

NOTE E -- DISCONTINUED OPERATIONS

    Discontinued operations include the Company's short term lending operations
and information systems operations ("LIS").

    The Company's discontinued short term lending operations include ST
Lending, Inc. ("STL"), Lomas Management, Inc.  ("LMI"), which manages the
assets of STL, and certain other real estate operations.  At September 30,
1995, the Company had reserves of $2.2 million to cover future operating losses
through the disposition of all properties.  For the quarters ended September
30, 1995 and 1994, losses of $0.7 million and $1.5 million, respectively, were
charged to the reserves.

    Net assets of discontinued short term lending operations at September 30,
1995, were as follows (in thousands):

<TABLE>
         <S>                                                                                       <C>
         Assets:
             Mortgage notes receivable and foreclosed real estate, net of allowance for
               losses of $12,316  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      $  22,715
             Cash and cash equivalents  . . . . . . . . . . . . . . . . . . . . . . . . . . .          5,748
             Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            783
                                                                                                   ---------
                                                                                                      29,246
         Less:
             Accounts payable and accrued expenses  . . . . . . . . . . . . . . . . . . . . .           (354)
             Future operating loss reserves . . . . . . . . . . . . . . . . . . . . . . . . .         (2,189)
                                                                                                   --------- 
                                                                                                   $  26,703
                                                                                                   =========
</TABLE>

    Net assets of the Company's discontinued LIS operations at September 30,
1995 were $7.1 million including an $8.0 million note, net of accrued legal
expense and other taxes of $0.9 million.

NOTE F -- EARNINGS (LOSS) PER SHARE

    Primary earnings (loss) per share data for the quarters ended September 30,
1995 and 1994, are computed using the weighted average number of shares of
common stock and, when dilutive, common stock equivalents outstanding during
the period. Common stock equivalents include units and shares granted under the
Lomas Financial Corporation 1991 Long Term Incentive Plan for Non-Employee
Directors, the 1991 Stock Incentive Program and the 1993 Intermediate and Long
Term Incentive Plan. Common stock equivalents also include the assumed exercise
of dilutive stock options. Fully diluted per share data is computed on the same
basis as primary, but it also assumes (if dilutive) the conversion of senior
convertible notes with the related adjustments for interest and federal income
tax expenses. For the quarters ended September 30, 1995 and 1994, the fully
diluted per share data is antidilutive.





                                       7
<PAGE>   9
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS.

RESULTS OF OPERATIONS

    The Company's continuing operations resulted in a net loss for the quarter
ended September 30, 1995 of $194.2 million after recognizing expected losses of
$162.2 million on assets held for sale.  Operating loss from continuing
operations for the quarter ended September 30, 1994 was $7.4 million.  During
the September 1994 quarter, discontinued operations incurred losses of $5.5
million.

    The operating results of the Company during the quarters ended September
30, 1995 and 1994, were as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                 Quarter Ended September 30  
                                                                              -------------------------------
                                                                                  1995                1994   
                                                                              -----------         -----------
         <S>                                                                  <C>                 <C>
         Operating income (loss):
             Mortgage banking . . . . . . . . . . . . . . . . . . . . . .     $   (30,986)        $      (862)
             Other  . . . . . . . . . . . . . . . . . . . . . . . . . . .           2,596                (754)
                                                                              -----------         ----------- 
                                                                                  (28,390)             (1,616)
         Corporate Expenses:
             General and administrative . . . . . . . . . . . . . . . . .            (532)             (2,151)
             Corporate interest . . . . . . . . . . . . . . . . . . . . .          (3,148)             (3,583)
                                                                              -----------         ----------- 
                 Loss before loss on assets held for sale . . . . . . . .         (32,070)             (7,350)
         Loss on assets held for sale . . . . . . . . . . . . . . . . . .        (162,160)                 --
                                                                              -----------         -----------
                 Loss from continued operations . . . . . . . . . . . . .        (194,230)             (7,350)
         Loss from discontinued operations  . . . . . . . . . . . . . . .              --              (5,500)
                                                                              -----------         ----------- 
                 Net loss . . . . . . . . . . . . . . . . . . . . . . . .     $  (194,230)        $   (12,850)
                                                                              ===========         =========== 

</TABLE>
Mortgage Banking

    The mortgage banking division's operations during the September 30, 1995,
quarter, before the $162.2 million loss on assets held for sale, reported a
loss of $31.0 million compared to a loss of $0.9 million in the same period of
fiscal 1995.  As a result of the proposed sale of the majority of the mortgage
banking's remaining assets and the anticipated termination of employees,
included in the loss for the September 1995 quarter was a $12.0 million
writedown of a Company-owned building and a $7.0 million writedown of prepaid
pension expense based on a preliminary actuarial valuation of the Company's
pension account.  Also included in the September 1995 quarter was a $6.6
million loss on termination of interest rate swaps.





                                       8
<PAGE>   10
RESULTS OF OPERATIONS   (CONTINUED)

    The mortgage banking division's revenues, expenses and contribution/loss
from continuing operations for the quarters ended September 30, 1995 and 1994,
were derived from the following sources (in millions):

<TABLE>
<CAPTION>
                                                                               Quarter Ended September 30    
                                                                         ------------------------------------
                                                                                1995               1994      
                                                                         -----------------  -----------------
         <S>                                                             <C>               <C>
         Loan administration
             Revenues . . . . . . . . . . . . . . . . . . . . . . . .    $   29.2           $   30.5
             Expenses . . . . . . . . . . . . . . . . . . . . . . . .       (11.8)             (11.4)
             Amortization . . . . . . . . . . . . . . . . . . . . . .       (14.0)  $  3.4     (14.0)  $  5.1
                                                                         --------           --------         
         Master servicing
             Revenues . . . . . . . . . . . . . . . . . . . . . . . .         2.7                2.6
             Expenses . . . . . . . . . . . . . . . . . . . . . . . .        (1.5)              (1.9)
             Amortization . . . . . . . . . . . . . . . . . . . . . .        (0.1)     1.1      (0.2)     0.5
                                                                         --------           --------         
         Insurance
             Agency . . . . . . . . . . . . . . . . . . . . . . . . .         2.8                2.7
             Mortgage plans . . . . . . . . . . . . . . . . . . . . .         1.5                1.4
             Expenses . . . . . . . . . . . . . . . . . . . . . . . .        (1.4)     2.9      (1.4)     2.7
                                                                         --------           --------         
         Banking (including warehousing and investment income and
           interest expense)
             Revenues . . . . . . . . . . . . . . . . . . . . . . . .        11.9                7.8
             Expenses . . . . . . . . . . . . . . . . . . . . . . . .       (26.6)   (14.7)    (14.9)    (7.1)
                                                                         --------           --------          
         Portfolio production
             Revenues . . . . . . . . . . . . . . . . . . . . . . . .         4.4                6.7
             Expenses . . . . . . . . . . . . . . . . . . . . . . . .        (3.4)     1.0      (5.2)     1.5
                                                                         --------           --------         
         Field services
             Revenues . . . . . . . . . . . . . . . . . . . . . . . .         1.7                3.0
             Expenses . . . . . . . . . . . . . . . . . . . . . . . .        (1.9)    (0.2)     (3.0)      --
                                                                         --------           --------         
         General and administrative expense . . . . . . . . . . . . .                 (5.5)              (3.6)
         Writedown of building  . . . . . . . . . . . . . . . . . . .                (12.0)                --
         Writedown of prepaid pension . . . . . . . . . . . . . . . .                 (7.0)                --
                                                                                   -------            -------
             Loss from operations . . . . . . . . . . . . . . . . . .                (31.0)              (0.9)
         Loss on assets held for sale . . . . . . . . . . . . . . . .               (162.2)                --
                                                                                   -------            -------
             Operating income (loss)  . . . . . . . . . . . . . . . .              $(193.2)           $  (0.9)
                                                                                   =======            ======= 
</TABLE>

    The loan administration unit generated operating income of $3.4 million and
$5.1 million during the quarters ended September 30, 1995 and 1994,
respectively.  Servicing related revenues decreased by $1.3 million to $29.2
million for the September 30, 1995 quarter.  The decrease in revenues is
principally due to servicing sales.  During the quarter ended September 30,
1995, the Company sold mortgage servicing rights related to a $4.6 billion
unpaid principal balance of mortgage loans for $22.6 million of cash.  At
September 30, 1995 and 1994, the Company's servicing portfolio including
subservicing totaled $30.1 billion and $33.1 billion, respectively.

    Master servicing operations generated income of $1.1 million for the
quarter ended September 30, 1995, compared to $0.5 million of income in the
quarter ended September 30, 1994.  The increase in income reflected the cost
reduction programs implemented by the Company.





                                       9
<PAGE>   11
RESULTS OF OPERATIONS   (CONTINUED)

    The banking unit recorded net expenses of $14.7 million for the first
quarter of fiscal 1996 compared to a $7.1 million net expense for the same
period of fiscal 1995.  Banking revenues increased by $4.1 million from $7.8
million in the September 1994 quarter to $11.9 million in the September 1995
quarter.  The increase is attributable to the increase in the average amount of
first mortgage loans held in warehouse pending delivery to permanent investors.
The average warehoused first mortgage loans were $339.3 million during the
September 1995 quarter compared to $271.5 million during the September 1994
quarter.  The increase in revenues was partially offset by the increase in
warehouse related interest expense of $3.0 million.  Banking expenses during
the quarter ended September 30, 1995 also included $6.6 million of loss
recognized for the termination of interest rate swaps.  In addition, the
interest rate swaps reduced the Company's net interest expense by $0.8 million
in the September 1994 quarter.  For the September 1995 quarter, the Company
incurred a net interest expense of $1.3 million on the interest rate swaps.

    Portfolio production operations recorded income of $1.0 million and $1.5
million for the quarters ended September 30, 1995 and 1994, respectively.
Portfolio production revenues for the quarters ended September 30, 1995 and
1994 included $0.8 million and $3.2 million, respectively, of gains from sales
of first mortgage loans and related servicing rights.

    In August 1995, the Company terminated its field services business and sold
certain assets previously used by that operation.  The transaction resulted in
a gain of $142,000 which is being deferred until that subsidiary's remaining
receivables are collected and payables are paid.

    General and administrative expense for the quarter ended September 1995
included a provision of $1.6 million.  According to the Phase I Sale agreement
with First Nationwide, the Company agreed to maintain the allowance for losses
related to its loan administration and production operations at the same level
as they were at July 31, 1995.  Therefore, chargeoffs totaling $1.6 million
during the two months ended September 30, 1995, were expensed and included in
the general and administrative expense.

    As a result of the transactions described in "NOTE C" to the consolidated
financial statements, management has abandoned its plan in the September 1995
quarter to consolidate its operations into one building and, therefore, will
hold the building for sale.  Accordingly, the Company recorded a loss of $12
million in the quarter ended September 30, 1995, to reflect the asset at fair
value less estimated selling costs.  The Company also recorded $7.0 million in
personnel expense during the September 30, 1995 quarter to writedown its
prepaid pension expense for staff reductions that occurred in connection with
the sale of the Company's loan production business and the anticipated
termination of the majority of the Company's employees.

Other

    The Company's other operations generated income of $2.6 million during the
quarter ended September 30, 1995, compared to a loss of $754,000 in the quarter
ended September 30, 1994.  The September 1995 quarter results included a $1.1
million gain from the sale of the Company's image processing operations.
During the quarters ended September 30, 1995 and 1994, the image processing
operations recorded losses of $153,000 and $1.3 million, respectively.  Also
included in other income for the September 1995 quarter was a $1.2 million
cash received on the bankruptcy settlement from the Company's affiliate, Vista
Properties, Inc. ("Vista"), representing the redemption of the Company's 19% 
common stock ownership which the Company carried at no book basis. In addition
to the cash received on the settlement, the Company also received stock units
consisting of 1,175 shares of Vista Series A preferred stock with par value of
$0.01 per share and an initial coupon rate of 10% and 1,175 shares of Vista
Class A common stock. The preferred stock has a liquidation preference of
approximately $1.2 million and will be repriced in two years. Due to the
restricted nature of the stock and uncertainty surrounding the market value,
the Company recorded both issues at $1.
                     
Discontinued Operations

    Discontinued operations during the quarters ended September 30, 1995 and
1994, reported losses of $-0- and $5.5 million, respectively.  During the
quarter ended September 30, 1994, the Company provided reserves of $4.0 million
for STL operations and $1.5 million for LIS operations.  During the quarters
ended September 30, 1995 and 1994,





                                       10
<PAGE>   12
RESULTS OF OPERATIONS   (CONTINUED)

STL operating losses of $749,000 and $1.5 million, respectively, were charged
to the loss reserves.  Operating loss for LIS of $5.3 million was charged to
reserves for the quarter ended September 30, 1994.

LIQUIDITY AND CAPITAL RESOURCES

    At September 30, 1995, the Company had $274.1 million warehouse related
debt outstanding.  The debt was secured by single-family mortgage loans pending
delivery to permanent investors.  On October 2, 1995, the Phase I Sale closing
date, the outstanding warehouse debt along with accrued interest was repaid by
First Nationwide.

    Semiannual interest payments in the amount of $17.1 million on Lomas
Mortgage's senior notes and $6.3 million of LFC's senior convertible notes were
due in October 1995.  Lomas Mortgage announced on October 2, 1995, that it did
not make the approximately $17 million of scheduled interest payments on its 9
3/4% term notes payable due October 1, 1997, and its 10 1/4% term notes payable
due October 1, 2001.  LFC did not make the scheduled interest payments due on
October 31, 1995 of approximately $6.3 million on its 9% senior convertible
notes.  In addition, a final payment in the amount of $37.9 million along with
accrued interest related to a mortgage note on the Company's headquarters is
due March 1996 and Lomas Mortgage's $150 million senior notes are due on
October 1, 1997.  LFC, Lomas Mortgage and two other insignificant subsidiaries
of LFC filed voluntary petitions for Chapter 11 proceedings on October 10,
1995.  For further information, see "NOTE B -- CHAPTER 11 PROCEEDINGS" of this
report and "Item 3. Legal Proceedings" in the Company's annual report on Form
10-K for the year ended June 30, 1995.

                          PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

    Reference is made to "Item 3.  Legal Proceedings" in the Company's annual
report on Form 10-K for the year ended June 30, 1995, for a description of
LFC's, Lomas Mortgage's and certain of its subsidiaries' Chapter 11
proceedings.  There have been no material developments or changes to these
proceedings except the formation of an official unsecured creditors committee
on October 23, 1995.

    The Company is also involved in a number of other lawsuits considered to be
in the normal course of business.  In management's opinion, the resolution of
these other disputes will not have a material adverse effect on the financial
position of the Company.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

    (a)  Exhibits:

<TABLE>
<CAPTION>
         Exhibit
         Number
         ------
         <S>     <C>
         (10.1)  Section 363 Asset Sale Agreement dated as of October 9, 1995, by and between First Nationwide Mortgage
                 Corporation and Lomas Mortgage.

         (11)    Computation of Earnings (Loss) Per Share

         (27)    Financial Data Schedule (submitted to the Securities and Exchange Commission for its information).

</TABLE>




                                       11
<PAGE>   13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

    (b)  Reports on Form 8-K:

             Form 8-K dated October 30, 1995, reported the press release of the
         New York Stock Exchange ("NYSE") regarding the suspension of trading
         of LFC's common stock and convertible notes and application to delist
         the issue by the NYSE.  No financial statements were filed.





                                       12
<PAGE>   14
                                   SIGNATURES

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


<TABLE>
<S>                                                 <C>
                                                                         LOMAS FINANCIAL CORPORATION               
                                                         ----------------------------------------------------------------
                                                                                (Registrant)



Date:  November 14, 1995                             By:                       /S/ERIC D. BOOTH 
                                                         ----------------------------------------------------------------
                                                                                  Eric D. Booth
                                                                   President, Chief Executive Officer and Director



Date   November 14, 1995                            By:                         /S/GARY WHITE 
                                                         ----------------------------------------------------------------
                                                                                   Gary White
                                                                Senior Vice President and Chief Financial Officer


</TABLE>



                                       13
<PAGE>   15
                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
                                                                                             Sequentially
Exhibit                                                                                        Numbered
Number                               Description                                                 Page    
------                               -----------                                            -------------
<S>      <C>
(10.1)   Section 363 Asset Sale Agreement dated as of October 9, 1995, by and between First
         Nationwide Mortgage Corporation and Lomas Mortgage.

(11)     Computation of Earnings (Loss) Per Share

(27)     Financial Data Schedule (submitted to the Securities and Exchange Commission for its
         information).

</TABLE>




                                       14