Form 10-Q Quarterly Report

                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                  For the quarterly period ended March 31, 2001

                                       OR

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

                         Commission File Number: 1-7614
                          -----------------------------

                              PMCC FINANCIAL CORP.
             (Exact Name of Registrant as Specified in its Charter)


           Delaware                                             11-3404072
(State or other Jurisdiction of                              (I.R.S. Employer
Incorporation or Organization)                            Identification Number)


                               1767 Morris Avenue
                                Union, N.J. 07083
              (Address of Principal Executive Offices and Zip Code)

                                 (908) 687-2000
              (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  ________
              ------------

Number of shares  outstanding of the issuer's  Common Stock,  par value $.01 per
share, as of May 11, 2001: 3,707,000 shares.


<PAGE>

                              PMCC FINANCIAL CORP.

                                    FORM 10-Q

                                TABLE OF CONTENTS
                                -----------------


<TABLE>
<CAPTION>
                                                                                             Page No.
                                                                                             --------

<S>                                                                                          <C>
Part I - Financial Information

     Item 1.  Condensed Financial Statements:

              Condensed Consolidated Statements of Operations (Unaudited)                        3
                  Three Months Ended March 31, 2001 and 2000

              Condensed Consolidated Statements of Financial Condition                           4
                  March 31, 2001 (Unaudited) and December 31, 2000 (Audited)

              Condensed Consolidated Statements of Cash Flows (Unaudited)                        5
                  Three Months Ended March 31, 2001 and 2000

              Notes to Condensed Consolidated Financial Statements (Unaudited)                 6-11


     Item 2. Management's Discussion and Analysis of Financial Condition                      12-16
             and Results of Operations

Part II -  Other Information                                                                    17

Signatures                                                                                      18

</TABLE>


<PAGE>

                         Part I - FINANCIAL INFORMATION

Item 1.  Condensed Financial Statements

                      PMCC FINANCIAL CORP. and SUBSIDIARIES
                 Condensed Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                          Three Months Ended March 31,
                                                                          ----------------------------
                                                                              2001            2000
                                                                              ----            ----
<S>                                                                       <C>             <C>
Revenues:
Sales of residential rehabilitation properties                            $       --      $  9,922,201
Gains on sale of mortgage loans, net                                           761,525       1,048,985
Interest earned                                                                200,009         570,886
                                                                          ------------    ------------
                                                                               961,534      11,542,072
                                                                          ------------    ------------

Expenses:
Costs of sales, residential rehabilitation properties                             --         9,472,931
Compensation and benefits                                                      675,852       1,891,804
Interest expense                                                               277,827         693,854
Expenses resulting from Investigation (Note 8)                                  14,595       1,145,256
Other general and administrative                                               487,104       1,035,058
                                                                          ------------    ------------
                                                                             1,455,378      14,238,903
                                                                          ------------    ------------

Loss before income tax benefit                                                (493,844)     (2,696,831)
Income tax benefit                                                                --        (1,109,247)
                                                                          ------------    ------------
         Net loss                                                         $   (493,844)   $ (1,587,584)
                                                                          ============    ============

Net loss per share of common stock-basic and diluted                      $      (0.13)   $      (0.43)
                                                                          ============    ============

Weighted average number of shares and
   share equivalents outstanding-basic and diluted                           3,707,000       3,707,000
                                                                          ============    ============


</TABLE>


See accompanying notes to unaudited condensed consolidated financial statements.



<PAGE>

                      PMCC FINANCIAL CORP. AND SUBSIDIARIES
            Condensed Consolidated Statements of Financial Condition


<TABLE>
<CAPTION>
                                                                                      Unaudited         Audited
                                                                                      March 31,      December 31,
                                                                                        2001              2000
                                                                                    ------------    -------------

<S>                                                                                 <C>             <C>
Assets
Cash and cash equivalents                                                           $    102,826    $     21,988
Mortgage loans held for sale, net                                                      6,894,103      12,590,415
Mortgage loans held for investment, net                                                  226,650         226,650
Accrued interest receivable                                                              100,000         150,000
Other receivables, net                                                                   951,242       1,417,611
Residential rehabilitation properties, net                                               670,395         670,395
Furniture, fixtures & equipment, net                                                     462,322         512,718
Prepaid expenses and other assets                                                        207,276         210,428
                                                                                    ------------    ------------

Total assets                                                                        $  9,614,814    $ 15,800,205
                                                                                    ============    ============


Liabilities and shareholders' equity
Liabilities:
Notes payable-principally warehouse lines of credit                                 $  6,751,170    $ 12,374,111
Accrued expenses and other liabilities                                                 1,141,845       1,210,451
                                                                                    ------------    ------------

Total liabilities                                                                      7,893,015      13,584,562
                                                                                    ------------    ------------

Shareholders' equity
Common stock, $.01 par value; 40,000000 shares
     authorized; 3,750,000 shares issued                                                  37,500          37,500
Additional paid-in capital                                                            11,038,538      11,038,538
Accumulated deficit                                                                   (9,099,768)     (8,605,924)
Treasury stock, 43,000 shares, at cost                                                  (254,471)       (254,471)
                                                                                    ------------    ------------
Total  shareholders' equity                                                            1,721,799       2,215,643
                                                                                    ------------    ------------

Total liabilities and shareholders' equity                                          $  9,614,814    $ 15,800,205
                                                                                    ============    ============

</TABLE>


See accompanying notes to unaudited condensed consolidated financial statements


<PAGE>

                      PMCC FINANCIAL CORP. AND SUBSIDIARIES
                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                   Three months ended March 31,
                                                                                   ----------------------------
                                                                                       2001            2000
                                                                                       ----            ----
<S>                                                                               <C>             <C>
Cash flows from operating activities:
Net loss                                                                          $   (493,844)   $ (1,587,584)
    Adjustments to reconcile net loss to net cash provided by
       Operating activities:
         Residential rehabilitation properties (exclusive of cash paid directly
         to/by independent contractors):
           Contractual fees received                                                      --          (449,270)
           Proceeds from sales of properties and other related costs                      --         9,922,201
           Costs of properties acquired                                                   --        (1,698,175)
         Depreciation and amortization                                                  50,396          90,611
         Decrease (increase) in interest and other receivables                         516,369        (523,661)
         Decrease in mortgage loans held for sale and investment, net                5,696,312      21,656,362
         Decrease in receivable from sales of loans                                       --         4,300,279
         Decrease (increase) in prepaid expenses and other assets                        3,152        (335,972)
         Decrease in deferred taxes payable                                               --          (333,000)
         Decrease in accrued expenses and other liabilities                            (68,606)       (447,295)
                                                                                  ------------    ------------

Net cash provided by operating activities                                            5,703,779      30,594,496
                                                                                  ------------    ------------

Cash flows from investing activities:
         Purchase of furniture and equipment                                              --            (8,357)
                                                                                  ------------    ------------

Cash flows from financing activities:
         Net decrease in notes payable- principally
                warehouse lines of credit                                           (5,622,941)    (30,251,991)
                                                                                  ------------    ------------

Net increase in cash and cash equivalents                                               80,838         334,148

Cash and cash equivalents at beginning of period                                        21,988         214,957
                                                                                  ------------    ------------

Cash and cash equivalents at end of period                                        $    102,826    $    549,105
                                                                                  ============    ============

Supplemental disclosures of cash flow information:
        Cash paid during the period for:
           Interest                                                               $    279,722    $    970,048
                                                                                  ============    ============
           Income taxes                                                           $      1,350    $     11,190
                                                                                  ============    ============
           Loans transferred from mortgage loans held for sale to held
                 for investment, net                                              $          0    $    322,100
                                                                                  ============    ============

</TABLE>

See accompanying notes to unaudited condensed consolidated financial statements


<PAGE>

                      PMCC FINANCIAL CORP. AND SUBSIDIARIES
              Notes to Condensed Consolidated Financial Statements
                                 March 31, 2001
                                   (Unaudited)

1.   Business

     PMCC Financial Corp. (the "Company"), a Delaware corporation, was organized
     in 1998 to own the stock of PMCC Mortgage Corp.  ("PMCC") (formerly Premier
     Mortgage  Corp.) and its  subsidiaries.  The  Company is a mortgage  banker
     operating  primarily  in New York,  New Jersey and Florida.  The  Company's
     principal  business  activities  are (i)  the  origination  of  residential
     mortgage  loans  and the sale of such  loans in the  secondary  market on a
     servicing   released   basis  and  (ii)  the   funding  of  the   purchase,
     rehabilitation  and resale of vacant  residential  real estate  properties.
     Residential  mortgage  loans are sold on a  non-recourse  basis  except for
     indemnifications or buybacks required for certain early payment defaults or
     other defects.

     The  mortgage  banking  industry is generally  subject to seasonal  trends.
     These trends reflect the general  pattern of resales of homes,  which sales
     typically  peak  during  the spring and summer  seasons  and  decline  from
     January  through  March.  Refinancings  tend to be less  seasonal  and more
     closely related to changes in interest rates.

2.   Basis of Presentation

     The unaudited condensed  consolidated  financial statements included herein
     reflect all adjustments,  which are, in the opinion of management necessary
     for a fair  presentation  of the  Company's  financial  condition as of the
     dates  indicated and the results of operations for the periods  shown.  All
     such  adjustments  are of a  normal  recurring  nature.  In  preparing  the
     accompanying  condensed  consolidated  financial statements,  management is
     required to make  estimates  and  assumptions  that  reflect  the  reported
     amounts  of  assets  and  liabilities  as of  the  date  of  the  condensed
     consolidated  statements of financial  condition and of income and expenses
     for the periods  presented  in the  condensed  consolidated  statements  of
     operations.  The results of operations for the three months ended March 31,
     2001 are not  necessarily  indicative  of the results of  operations  to be
     expected  for the  remainder  of the  year.  Certain  information  and note
     disclosures   normally  included  in  financial   statements   prepared  in
     accordance with generally accepted accounting  principles have been omitted
     pursuant  to  rules  and   regulations   of  the  Securities  and  Exchange
     Commission.

     These unaudited condensed  consolidated financial statements should be read
     in conjunction with the audited consolidated financial statements and notes
     thereto included in the Company's Form 10-K for the year ended December 31,
     2000.

3.   Income Taxes

     The  Company  accounts  for  income  taxes  under the  liability  method as
     required by SFAS No. 109.

4.   Earnings Per Share of Common Stock

     Basic EPS is  determined  by  dividing  net  income  for the  period by the
     weighted  average  number  of common  shares  outstanding  during  the same
     period.  Diluted EPS reflects the  potential  dilution  that could occur if
     securities  or other  contracts  to issue  common  stock were  exercised or
     converted  into common  stock or resulted in the  issuance of common  stock
     which  would  then  share in the  earnings  of the  Company.  There were no
     outstanding dilutive stock options or warrants for the quarters ended March
     31, 2001 and 2000.

5.   Notes Payable

     At March 31, 2001 and 2000,  substantially  all of the mortgage  loans held
     for sale and  investment,  receivable  from  sales  of  loans  and  certain
     residential  rehabilitation properties were pledged to secure notes payable
     under  warehouse  lines of credit  agreements.  The notes are repaid as the
     related mortgage loans or residential rehabilitation properties are sold or
     collected.

     On  February  28,  2000,  the  Company  entered  into a  Master  Repurchase
     Agreement  that provides the Company with a warehouse  facility (the "IMPAC
     Line")  through IMPAC  Warehouse  Lending Group  ("IMPAC").  The IMPAC Line
     provides  a  committed  warehouse  line of  credit of $20  million  for the
     Company's  mortgage  originations  only.  The IMPAC  Line is secured by the
     mortgage  loans  funded  with the  proceeds  of such  borrowings.  Interest
     payable is  variable  based on the Prime Rate as posted by Bank of America,
     N.A.  plus  0.50%.  The  IMPAC  Line has no stated  expiration  date but is
     terminable by either party upon written notice.

     The Company's  warehouse line of credit with Chase Bank of Texas,  National
     Association  ("Chase")  and PNC Bank ("PNC") is expected to be paid in full
     no later than May 31, 2001.  The balance  outstanding on this line at March
     31,  2001  and  May  14,  2001  is  approximately   $161,000  and  $53,000,
     respectively.

6.   Concentrations

     The  Company  may be  exposed  to a  concentration  of  credit  risk from a
     regional economic standpoint as loans were primarily  originated in the New
     York Metropolitan area and Florida.

     The Company  currently  finances its  mortgage  banking  operations  with a
     single warehouse facility (the IMPAC Line - see Note 5). The IMPAC Line has
     no stated  expiration  date, but is terminable by either party upon written
     notice.  Management  believes that there are other  financial  institutions
     that could provide the Company with a similar facility on comparable terms.
     However,  a  termination  of the  current  warehouse  facility  without  an
     immediate   replacement  could  cause  an  interruption  to  the  Company's
     operations  and  possible  loss of revenue,  which would  affect  operating
     results adversely.

7.   Related-Party Transactions

     On June 8, 2000, the Company borrowed $275,000 from a company  wholly-owned
     by Robert Friedman, owner of 17% of the Company's outstanding stock and the
     father of Ronald Friedman, the Company's former President and CEO currently
     a consultant  to the Company.  This loan is evidenced by a promissory  note
     due and payable on demand with a maturity of one year. The interest rate on
     the  note is 16%  per  annum  payable  monthly.  The  note  is  secured  by
     properties and a mortgage which the Company owns.  Under the same note, the
     Company  borrowed an additional  $50,000 in July 2000.  The Company  repaid
     $80,000 in August 2000 and  $175,000 in October  2000 when a portion of the
     underlying  collateral was sold by the Company. The balance due on the note
     at March 31, 2001 and May 11, 2001 is $70,000.

     The Company has  amounts  receivable  due from an officer of the Company in
     the amount of $227,782  and  $267,782 at March 31,  2001 and  December  31,
     2000,  respectively.  These  amounts  consist  of  general  advances  and a
     non-interest bearing note that have undefined repayment terms.

     A relative of Ronald  Friedman has an economic  interest in a rehab partner
     for the purchase and sale of rehabilitation properties with a subsidiary of
     PMCC. At March 31, 2001, the subsidiary owned no remaining  properties.  At
     March 31, 2001, the Company has an outstanding  receivable  from this rehab
     partner  of  approximately  $344,000,  substantially  all of which has been
     reserved.

8.   Litigation

     The U.S.  Attorney's  Office for the  Eastern  District  of New York ("U.S.
     Attorney") is conducting an investigation  (the  "Investigation")  into the
     allegations  asserted in a criminal complaint against Ronald Friedman,  the
     former Chairman of the Board,  President and Chief Executive Officer of the
     Company,  and a loan officer formerly employed by the Company.  On December
     21, 1999, agents of the Office of Inspector General for HUD executed search
     and arrest warrants at the Roslyn offices of the Company. The warrants were
     issued on the basis of a federal criminal  complaint  ("Complaint"),  which
     charged  that  Ronald   Friedman  and  the  loan  officer   knowingly   and
     intentionally  made,  uttered or published  false  statements in connection
     with loans to be insured by HUD.

     In response to the allegations  against the loan officer and Friedman,  the
     Company  engaged  the legal  services  of  Dorsey & Whitney  LLP in 2000 to
     conduct  an  internal  investigation  into the  alleged  misconduct  and to
     prepare a report discussing the findings of the internal investigation.  As
     part of this  internal  investigation,  the Company  worked  closely and in
     cooperation  with HUD and the U.S.  Attorney.  In addition,  key employees,
     including loan officers,  loan processors,  underwriters and managers, were
     interviewed.  An audit also was conducted of over one-third of all 1999 FHA
     loans  in  order  to  assess  whether  the  files  comported  with  the HUD
     guidelines for FHA loans.

     A  preliminary  report  detailing  Dorsey  &  Whitney's  investigation  and
     findings  was  presented to the  Company's  Board of Directors on April 12,
     2000. A written report was issued on April 14, 2000.  The report  concludes
     that while there appears to be support for the  allegations  leveled at the
     loan  officer,  there is no  evidence  that the  misconduct  alleged in the
     complaint  was systemic at the Company.  Rather,  the findings  support the
     conclusion that the alleged misconduct was an isolated  occurrence,  not an
     institutional  practice.  The  available  evidence did not permit  Dorsey &
     Whitney to reach a definitive  conclusion  concerning  the charges  pending
     against Ronald Friedman.  The  investigation,  comprised of interviews with
     PMCC employees and an extensive review of mortgage loan files,  revealed no
     independent  evidence  tending to support the allegations  against Friedman
     contained in the criminal complaint.

     While the Company  believes that it has not committed  any  wrongdoing,  it
     continues  to  cooperate  fully  with the U.S.  Attorney's  Office and HUD.
     However,  it  cannot  predict  the  duration  of the  Investigation  or its
     potential  outcome.  Although the Company does not anticipate being charged
     in connection  with this  investigation,  in the event that the Company was
     charged,  it intends to vigorously  defend its position.  While the Company
     does not  anticipate its  occurrence,  in the event that it was to lose its
     ability to originate and sell FHA loans as result of the Investigation, the
     Company does not believe that the financial  effect on the Company would be
     material.  Since July 2000, the Company has originated  less than 1% of its
     loan volume through FHA products.

     As a result  of this  investigation,  the  Company  incurred  approximately
     $15,000 and $1.145  million of direct  expenses  for the three months ended
     March 31, 2001 and March 31, 2000, respectively,  and in the aggregate over
     $1.7  million  since  January  2000.   These  expenses  include  legal  and
     professional fees incurred in connection with the internal investigation of
     the Company, criminal defense attorneys and negotiations of warehouse lines
     of credit amendments. Also included in these expenses in 2000 are bank fees
     relating  to  granting  amendments  to the Bank  United  line of credit and
     bonuses paid to the Company's officers and employees.

     One of the Company's  warehouse  banks has indicated  that the Company owes
     such bank a total of $250,000 in penalties and fees in relation to its line
     of credit with the bank.  The Company  vigorously  disputes  this claim and
     believes it is without merit.  The Company is unable to predict the outcome
     of this claim and,  accordingly,  no adjustments regarding this matter have
     been made in the accompanying consolidated financial statements.

9.   Change of Control

     Effective  July 28, 2000,  PMCC  Financial  Corp.  announced  that Internet
     Business's  International,  Inc. ("IBUI") purchased the 2,460,000 shares of
     the  Company  held by  Ronald  Friedman,  Robert  Friedman  and the  Ronald
     Friedman  1997  Guarantor   Retained  Annuity  Trust   (collectively,   the
     "Sellers")  in a private  transaction  (the  "Transaction").  This purchase
     represents  66.36% of the  3,707,000  shares of common stock of the Company
     outstanding.  IBUI  is  a  holding  company  with  a  variety  of  Internet
     subsidiaries  that  trades  publicly  under the  symbol  IBUI on the NASDAQ
     Bulletin Board. According to provisions of the Transaction  agreement,  the
     purchase  price was reduced  because  the  Company's  common  stock was not
     trading on either the Amex or NASDAQ and there was no merger of the Company
     with IBUI or any of its  affiliates  within time  periods  specified by the
     agreement.  At the closing,  all shares  purchased by IBUI from the Sellers
     were deposited in escrow with the Sellers'  attorney.  These shares will be
     released to IBUI upon receipt of the scheduled installment payments.

     The Company has been  informed by the Sellers  that  certain  payments  due
     under the agreement by IBUI to purchase  shares of the Company's stock from
     the Sellers  were not made and that an event of default  has been  declared
     against IBUI under this  purchase  agreement  and the shares held in escrow
     have  been  returned  to  the  Sellers.  At  this  time,  negotiations  and
     discussions  are  being  held  among  the  involved  parties,  however,  no
     definitive  revised agreement has been reached that would cure the default.
     At March 31, 2001,  the transfer agent has indicated that IBUI owns 269,230
     shares of PMCC stock or 7.26% of the total shares outstanding.

10.  American Stock Exchange

     On December 22, 1999, the American  Stock  Exchange (the "Amex")  suspended
     trading of the Company's Common Stock and commenced a review of the listing
     status of the Common Stock. In connection with the Amex review process, the
     Company met with the Amex staff on March 7, 2000 to present  information in
     support of continued  listing.  On September 22, 2000,  PMCC was advised by
     the  Amex  that it was its  intention  to  proceed  with the  filing  of an
     application  with the  Securities  and  Exchange  Commission  to strike the
     Company's common stock from listing and  registration on the Exchange.  The
     Company  exercised  its right to appeal the  decision of the  Exchange.  On
     December  15,  2000,  PMCC was  advised by the Amex that,  after the appeal
     hearing to its Committee on Securities  by Company  management  and outside
     counsel held on November 6, 2000, the Amex Adjudicatory Council agreed with
     and affirmed the Amex's staff decision to strike the Company's common stock
     from listing and  registration on the Exchange.  On December 22, 2000, Amex
     filed an application  with the Securities and Exchange  Commission to do so
     effective  with the opening of the trading  session on January 4, 2001. The
     Company's  common stock is  currently  trading on the Pink Sheets under the
     symbol "PMCF".

11.  Supplemental Information

     The Company's  operations consist of two principal  activities (a) mortgage
     banking  and  (b)  funding  the  purchase,  rehabilitation  and  resale  of
     residential real estate. The following table sets forth certain information
     concerning these activities (in thousands):


<PAGE>

<TABLE>
<CAPTION>
                                                                       (Unaudited)
                                                                 Quarter Ended March 31,
                                                                 -----------------------
                                                                    2001        2000
                                                                    ----        ----
<S>                                                               <C>         <C>
Revenues:
   Residential rehabilitation properties                          $   --      $  9,922
   Mortgage banking                                                    962       1,620
                                                                  --------    --------
                                                                  $    962    $ 11,542
                                                                  ========    ========
Less: (1)
   Expenses allocable to residential rehabil-
     itation properties (cost of sales, interest
     expense and compensation and benefits)                           --        10,119
   Expenses allocable to mortgage banking
      (all other)                                                    1,455       4,120
                                                                  --------    --------
                                                                  $  1,455    $ 14,239
                                                                  ========    ========


Operating Loss:
     Residential rehabilitation properties                            --          (197)
     Mortgage banking                                                 (494)     (2,500)
                                                                  --------    --------
                                                                  $   (494)   $ (2,697)
                                                                  ========    ========

Identifiable Assets (at March 31, 2001 and
   December 31, 2000, respectively):
     Residential rehabilitation properties                        $  1,070    $  1,070
     Mortgage banking                                                8,545      14,730
                                                                  --------    --------
                                                                  $  9,615    $ 15,800
                                                                  ========    ========

<FN>
     (1)  In  managing  its  business,   the  Company   specifically   allocates
     compensation and benefits to its residential  rehabilitation  segment.  All
     other expenses,  including corporate overhead, are included in the mortgage
     banking segment.
</FN>
</TABLE>

12.  Management Plans

     In 2001,  the Company's  management  has and will continue to take numerous
     steps to create a positive cash flow for the Company. These include selling
     the remaining rehabilitation properties on hand at March 31, 2001, changing
     the  methodology  whereby the Company prices its loans so that a higher per
     loan gain is recognized and further reducing and  consolidating  operations
     as required. Certain expense reductions have been made in the first quarter
     of 2001 including reducing management salaries and consolidating the entire
     wholesale  operation in the Florida office. This resulted in a reduction in
     the  number  of staff  employees  processing  loans  as well as other  cost
     reductions.  The Company has been approved for listing on "lendingtree.com"
     to provide additional leads to potential  borrowers utilizing the Internet.
     Additional  commission-only  loan  officers  have been hired in 2001 in the
     retail  and  wholesale  areas to  increase  the  Company's  volume  of loan
     applications and to take advantage of current low interest rates.

<PAGE>

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

Forward-Looking Statements

     The  Private  Securities  Litigation  Reform  Act of 1995  provides a "safe
harbor" for certain  forward-looking  statements.  This Quarterly Report on Form
10-Q may contain forward-looking  statements which reflect the Company's current
views  with  respect  to  future   events  and  financial   performance.   These
forward-looking  statements  are  subject  to certain  risks and  uncertainties,
including  those  identified  below,  which could cause actual results to differ
materially from historical results or those anticipated.  These  forward-looking
statements reflect the Company's current views with respect to future events and
financial performance.  The words "believe," "expect,"  "anticipate,"  "intend,"
"estimate,"  and other  expressions  which  indicate  future  events  and trends
identify  forward-looking  statements.  Readers are cautioned not to place undue
reliance  upon these  forward-looking  statements,  which speak only as of their
dates.  The Company  undertakes no  obligation to publicly  update or revise any
forward-looking  statements,  whether as the result of new  information,  future
events or  otherwise.  The following  factors  among others,  could cause actual
results to differ materially from historical results or those  anticipated:  (1)
the level of demand for  mortgage  credit,  which is affected  by such  external
factors as the level of interest rates,  the strength of various segments of the
economy and demographics of the Company's lending markets;  (2) the direction of
interest rates; (3) the relationship between mortgage interest rates and cost of
funds;  (4) federal  and state  regulation  of the  Company's  mortgage  banking
operations;  (5)  competition  within the  mortgage  banking  industry;  (6) the
Company's  management  of cash  flow and  efforts  to modify  its  prior  growth
strategy;  (7) the  outcome  of  governmental  investigations  and  the  effects
thereof;  (8) the Company's efforts to improve quality control;  and other risks
and  uncertainties  described in the Company's Annual Report on Form 10-K and in
PMCC   Financial   Corp.'s  other  filings  with  the  Securities  and  Exchange
Commission.  Should one or more of these risks or uncertainties materialize,  or
should underlying  assumptions  prove incorrect,  actual outcomes and events may
vary materially from those indicated.

Results of Operations

Quarter Ended March 31, 2001 Compared to Quarter Ended March 31, 2000

Revenues.  The  following  table  sets  forth the  components  of the  Company's
revenues for the periods indicated:

                                                      Quarters Ended March 31,
                                                      ------------------------
                                                        2001             2000
                                                        ----             ----

Sales of residential rehabilitation properties       $       --      $ 9,922,201
Gains of sales of mortgage loans, net                   761,525        1,048,985
Interest earned                                         200,009          570,886
                                                     ----------      -----------
Total revenues                                       $  961,534      $11,542,072
                                                     ==========      ===========


     Revenues from the sale of residential  rehabilitation  properties decreased
$9.9 million,  or 100%,  for the quarter ended March 31, 2001 as compared to the
quarter ended March 31, 2000.  There were no residential  rehab  properties sold
for the quarter  ended March 31, 2001 compared to 52 for the quarter ended March
31, 2000.  This decrease was a result of the  Company's  initiative to liquidate
its properties on hand as quickly as practicable  during the year ended December
31,  2000.  At March 31,  2001,  the Company  owned nine  remaining  properties,
substantially all of which are expected to be sold by June 30, 2001.

     Gains on sales of mortgage loans  decreased  $287,000,  or 27%, to $762,000
for the quarter ended March 31, 2001 from $1,049,000 for the quarter ended March
31,  2000.  This  decrease  was  primarily  due to a decrease in  mortgage  loan
origination  volume,  partly  offset by an  increase  in the per loan margin for
loans sold into the  secondary  market.  Mortgage loan  originations  were $43.5
million  and $59.5  million  for the  quarters  ended  March 31,  2001 and 2000,
respectively.  This 27% decrease was primarily the result of the  consolidations
made by the  Company  during  2000.  For  the  quarter  ended  March  31,  2001,
approximately 11% of the Company's  mortgage  originations were derived from its
retail mortgage operations and approximately 89% from its wholesale operations.

     The following  table  summarizes the Company's  mortgage  originations  (in
thousands):

                                                        Quarters Ended March 31,
                                                        ------------------------

                                                             2001      2000

          Conventional                                    $43,533   $48,118
          FHA/VA                                             --      11,373
                                                          -------   -------
          Total                                           $43,533   $59,491
                                                          =======   =======

     Although there can be no assurance  thereof,  the Company expects  mortgage
originations  to increase and therefore  believes its gains on sales of mortgage
loans will increase.

     Interest  earned  decreased  $371,000,  or 65%, to $200,000 for the quarter
ended March 31, 2001 from  $571,000 for the quarter  ended March 31, 2000.  This
decrease was primarily due to lower  mortgage  interest  rates,  a change in the
methodology of shipping loans so that loans are held on the warehouse line for a
shorter  period  of time  before  they  are  sold to the  secondary  market  and
decreased mortgage originations for the quarter ended March 31, 2001 as compared
to the quarter ended March 31, 2000.

Expenses.  The following table sets forth the Company's expenses for the periods
indicated:

                                                        Quarters Ended March 31,
                                                        ------------------------
                                                            2001         2000
                                                       -------------------------

Cost of sales - residential rehabilitation properties  $      --     $ 9,472,931
Compensation and benefits                                  675,852     1,891,804
Interest expense                                           277,827       693,854
Expenses resulting from Investigation                       14,595     1,145,256
Other general and administrative                           487,104     1,035,058
                                                       -----------   -----------
Total expenses                                         $ 1,455,378   $14,238,903
                                                       ===========   ===========

     Cost of  sales  -  residential  rehabilitation  properties  decreased  $9.5
million,  or 100%,  for the  quarter  ended  March 31,  2001 as  compared to the
quarter  ended March 31, 2000.  This  decrease was the result of the decrease in
the number of  properties  sold in the quarter  ended March 31, 2001 compared to
the quarter ended March 31, 2000.

     Compensation and benefits  decreased $1.2 million,  or 64%, to $676,000 for
the quarter  ended March 31, 2001 from $1.9 million for the quarter  ended March
31,2000.  This  decrease  was  primarily  due to  decreased  sales  salaries and
commission, which are based substantially on mortgage loan originations, and the
reductions  in staff at the  Company's  Roslyn and New Jersey  locations.  Total
personnel decreased to 43 employees at March 31, 2001 from 86 at March 31, 2000.

     Interest expense  decreased  $417,000,  or 34%, to $277,000 for the quarter
ended March 31, 2001 from  $694,000 for the quarter  ended March 31, 2000.  This
decrease was primarily  attributable  to a change in the methodology of shipping
loans so that loans are held on the warehouse  line for a shorter period of time
before they are sold to the secondary market and decreased mortgage originations
for the quarter  ended March 31, 2001 as compared to the quarter ended March 31,
2000, along with the decrease in residential  rehabilitation  properties  funded
through the Company's warehouse facility.

     Expenses  resulting from the Investigation  decreased $1.13 million or 99%,
to $15,000  for the quarter  ended  March 31,  2001 from $1.145  million for the
quarter  ended March 31, 2000.  This  decrease was the result of large  expenses
incurred immediately after the beginning of the Investigation,  primarily in the
first  and  second  quarters  of  2000,  as well as the  current  status  of the
Investigation.

     Other general and  administrative  expense decreased  $548,000,  or 53%, to
$487,000  for the  quarter  ended  March 31,  2001 from  $1.035  million for the
quarter  ended March 31,  2000.  This  decrease was  primarily  due to decreased
expenses in connection with the contraction in the operations of the Company.

     Although there can be no assurance thereof, the Company believes that, as a
result of additional cost cutting initiatives in the first two quarters of 2001,
expenses will further decrease.

     The net  loss of  $494,000  for the  quarter  ended  March  31,  2001 was a
decrease  of $1.1  million  or 69%,  from the net loss of $1.6  million  for the
quarter ended March 31, 2000.

Liquidity and Capital Resources

     The Company's  principal  financing needs consist of funding  mortgage loan
originations and residential rehabilitation properties. To meet these needs, the
Company  currently relies on borrowings under warehouse lines of credit and cash
flow from operations.  The amount of outstanding  borrowings under the warehouse
lines of credit at March  31,  2001 was $6.5  million.  The  mortgage  loans and
residential  rehabilitation  properties  funded  with  the  proceeds  from  such
borrowings secure the warehouse lines of credit

     On August  7,  1998,  the  Company  entered  into a Senior  Secured  Credit
Agreement  (the  "Chase  Line") with Chase Bank of Texas,  National  Association
("Chase")  and PNC Bank  ("PNC").  The Chase Line  provided a warehouse  line of
credit of $120  million  ($90  million  committed  at August  11,  1998) for its
mortgage originations and residential  rehabilitation  purchases. The Chase Line
is secured by the mortgage loans and residential rehabilitation purchases funded
with the proceeds of such borrowings.  The Company has also pledged the stock of
its  residential  rehabilitation  subsidiaries  as  additional  collateral.  The
Company  is  required  to  comply  with  certain  financial  covenants  and  the
borrowings for  residential  rehabilitation  properties are guaranteed by Ronald
Friedman and Robert Friedman. No new loans or properties were added to this line
subsequent to November 8, 1999,  when the line was set to expire.  Chase and PNC
have  agreed to  continue  to extend  the line on a  specified  declining  basis
through a series of short term extensions.  The Company  anticipates paying down
the entire  facility no later than May 31, 2001. The balance  outstanding on the
Chase Line at March 31, 2001 and May 14,  2001 was  approximately  $161,000  and
$53,000,  respectively.  Interest  payable on the Chase Line is  variable  based
LIBOR plus 1.25% to 3.00% based upon the underlying collateral.

     On  February  28,  2000,  the  Company  entered  into a  Master  Repurchase
Agreement that provides the Company with a warehouse facility  (the"IMPAC Line")
through  IMPAC  Warehouse  Lending  Group  ("IMPAC").  The IMPAC Line provides a
committed  warehouse  line of credit of $20 million for the  Company's  mortgage
originations  only.  The IMPAC Line is secured by the mortgage loans funded with
the proceeds of such borrowings.  Interest payable on the IMPAC Line is variable
based on the Prime Rate as posted by Bank of America, N.A. plus 0.50%. The IMPAC
Line has no  stated  expiration  date but is  terminable  by either  party  upon
written  notice.  The balance  outstanding on the IMPAC Line was $6.3 million on
March 31, 2001 and $8.1 million on May 10, 2001.

     The  Company  currently  expects  that  the  existing  IMPAC  Line  will be
sufficient  to fund all  anticipated  loan  originations  for the  current  year
provided all new loans are sold to  investors on a loan by loan basis.  In order
to maximize potential profits through hedging strategies, additional lines would
be required.

     On June 8, 2000, the Company borrowed  $275,000 from a company wholly owned
by Robert Friedman.  This loan is evidenced by a promissory note due and payable
in one year. The interest rate on the note is 16% per annum payable monthly. The
note is secured by properties and a mortgage,  which the Company owns. Under the
same note, the Company borrowed an additional  $50,000 in July 2000. The Company
repaid $80,000 in August 2000 and $175,000 in October 2000 when a portion of the
underlying  collateral was sold by the Company.  The balance due on the note was
$70,000 at March 31, 2001 and May 11, 2001.

     Net cash  provided by  operations  for the quarter ended March 31, 2001 was
$5.7  million.  The Company  generated  cash from the $5.7  million  decrease in
mortgage  loans held for sale and  receivable  from sales of loans.  The Company
used  cash to reduce  borrowings  under  its  warehouse  lines of credit by $5.6
million.

Management Plans - See Note 12 to the Unaudited Condensed Consolidated Financial
Statements

Impact of New Accounting Standards

     None.


Item 3.  Quantitative And Qualitative Disclosures About Market Risk.

     None.


<PAGE>

                            PART II-OTHER INFORMATION


Item 1.  Legal Proceedings

     The Registrant is a defendant in certain  litigation  arising in the normal
course  of  its  business.  In the  opinion  of the  Registrant,  any  potential
liability  with respect to such legal actions will not,  individually  or in the
aggregate,  be material to the  Registrant's  financial  position,  liquidity or
future results of operations.

     See Note 8 to the Unaudited Condensed Consolidated Financial Statements for
additional information.

Item 2.  Changes in Securities

     None.

Item 3.  Defaults Upon Senior Securities

     None.

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

     None.

Item 5.  Other Information

     None.

Item 6.  Exhibits and Reports on Form 8-K

     (a)  Reports on Form 8-K
          None.

<PAGE>

                                   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.


                                PMCC FINANCIAL CORP.
                                (Registrant)



                                By: /s/
                                   ---------------------------------------------
                                   Andrew Soskin
                                   Interim President and Chief Executive Officer


                                By: /s/
                                   ---------------------------------------------
                                   Stephen J. Mayer
                                   Chief Financial Officer
                                   (Principal Accounting Officer)

Dated: May 18, 2001