<PAGE> 1

                     SECURITIES AND EXCHANGE COMMISSION

                           Washington, D.C. 20549

                                 FORM 10-Q
(Mark One)

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

         For the quarterly period ended June 30, 1997

                                     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 2-67676

                                 C.M. CORP.
           (Exact name of registrant as specified in its charter)

            Delaware                                       59-1995931
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                       Identification Number)

              311 Park Place Boulevard, Suite 500, Clearwater,
                               Florida 34619
        (Address of principal executive offices, including zip code)

                               (813) 791-2111
                             (Telephone Number)

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 registrant's common stock as of
July 31, 1997:

                   Class                     Outstanding as of July 31, 1997
     --------------------------              -------------------------------

     Common Stock, $1 par value                       1,000 shares

                                Page 1 of 18
                      Exhibit Index Located on Page 16
<PAGE> 2
                                 C.M. CORP.
                                 ----------

                                   INDEX
                                   -----

                                                                 Page Number
                                                                 -----------
Part I -  Financial Information

          Item 1.  Financial Statements

              Condensed Balance Sheets -
                   June 30, 1997 and December 31, 1996                    3

              Condensed Statements of Operations - Three and Six
                   Months Ended June 30, 1997 and 1996                    4

              Condensed Statements of Cash Flows - Six
                   Months Ended June 30, 1997 and 1996                    5

              Notes to Condensed Financial Statements                     6

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

          Item 3.  Defaults Upon Senior Securities                       14


Part II - Other Information

          Item 6.  Exhibits and Reports on Form 8-K                      15



<PAGE> 3

                                 C.M. CORP.
                                 ----------
                          CONDENSED BALANCE SHEETS
                          ------------------------
                                (Unaudited)

                                                       (Dollars in Thousands)
                                                      June 30,    December 31,
                                                         1997           1996
                                                     -----------  ------------

                                  ASSETS
                                  ------

RESTRICTED CASH ....................................     $    47      $   544

ACCRUED INTEREST RECEIVABLE ........................        --             24

INVESTMENT IN RESIDENTIAL MORTGAGE LOANS, net ......        --          2,388

REAL ESTATE OWNED ..................................          14         --
                                                         -------      -------

                                                         $    61      $ 2,956
                                                         =======      =======

   LIABILITIES AND STOCKHOLDER'S EQUITY
   ------------------------------------

LIABILITIES:

Payable to U.S. Home Mortgage Corporation ..........     $ 1,584      $ 1,584

Accrued interest and other liabilities .............        --             46

Long-term debt, in default .........................         525        3,396
                                                         -------      -------

            Total liabilities ......................       2,109        5,026
                                                         -------      -------

STOCKHOLDER'S EQUITY:

Common stock, $1 par value ...........................         1            1

Capital in excess of par value .......................     1,718        1,718

Retained deficit .....................................    (3,767)      (3,789)
                                                         -------      -------
            Total stockholder's equity ...............    (2,048)      (2,070)
                                                         -------      -------

                                                         $    61      $ 2,956
                                                         =======      =======

    The accompanying notes are an integral part of these balance sheets.

<PAGE> 4

                                 C.M. CORP.
                                 ----------
                     CONDENSED STATEMENTS OF OPERATIONS
                     ----------------------------------
                           (Dollars in Thousands)
                                (Unaudited)

                                          Three Months Ended  Six Months Ended
                                               June 30,            June 30,
                                          ------------------  ----------------
                                            1997       1996    1997      1996
                                           ------    ------   ------   -------

REVENUES:

   Interest ..........................     $  11     $  82     $  41    $ 161
   Gain on sale of loans .............      --        --          65     --
                                           -----     -----     -----    -----
                                              11        82       106      161
                                           -----     -----     -----    -----

EXPENSES:

   Interest ..........................      --         107        83      214
   Other .............................         2         1         4
   Recovery of losses on loans
        and real estate owned ........      --         (34)     --        (37)
                                           -----     -----     -----    -----
                                            --          75        84      181
                                           -----     -----     -----    -----


NET INCOME (LOSS) ....................     $  11     $   7     $  22    $ (20)
                                           =====     =====     =====    =====



   The accompanying notes are an integral part of these statements.


<PAGE> 5

                                 C.M. CORP.
                                 ----------
                     CONDENSED STATEMENTS OF CASH FLOWS
                     ----------------------------------
                           (Dollars in Thousands)
                                (Unaudited)

                                                           Six Months Ended
                                                              June 30,
                                                        ---------------------
                                                          1997         1996
                                                         -------     -------
Net Cash Used By Operating Activities ................   $  --          (52)
                                                         -------     -------

Cash Flows From Investing Activities:
    Proceeds from investments in residential mortgage
      loans                                                2,374        108
    Decrease in restricted cash ......................       497          8
                                                         -------    -------
    Net cash provided by investing activities ........     2,871        116
                                                         -------    -------

Cash Flows From Financing Activities:
    Repayment of long-term debt ......................    (2,871)      (64)
                                                         -------   -------
    Net cash used by financing activities ............    (2,871)      (64)
                                                         -------   -------

Net Change In Cash ...................................      --        --

Cash At Beginning of Period ..........................      --        --
                                                         -------   -------

Cash At End of Period ................................   $  --     $  --
                                                         =======   =======

Supplemental Disclosure:
    Interest Paid ....................................   $   129   $   129
                                                         =======   =======

      The accompanying notes are an integral part of these statements.

<PAGE> 6

                                 C.M. CORP.
                                 ----------
                  NOTES TO CONDENSED FINANCIAL STATEMENTS
                  ---------------------------------------
                           (Dollars in Thousands)
                                (Unaudited)

(1)      BASIS OF PRESENTATION:

         The accompanying  unaudited  condensed  financial  statements have
         been  prepared  pursuant  to  the  rules  and  regulations  of the
         Securities and Exchange  Commission.  Certain information and note
         disclosures  normally  included  in  annual  financial  statements
         prepared  in  accordance   with  generally   accepted   accounting
         principles have been condensed or omitted  pursuant to those rules
         and regulations. Although C.M. Corp. ("Company") believes that the
         disclosures  made are adequate to make the  information  presented
         not  misleading,  it is suggested that these  condensed  financial
         statements be read in  conjunction  with the  unaudited  financial
         statements  and notes  thereto  included in the  Company's  latest
         annual  report on Form  10-K.  The  Company  did not have the cash
         funds to pay the costs  and  expenses  of an audit by  independent
         certified public accountants of its financial  statements included
         in such  annual  report and,  accordingly,  those  statements  are
         unaudited.

         The accompanying  unaudited  condensed  financial  statements have
         been prepared in accordance  with  generally  accepted  accounting
         principles applicable to a going concern, which contemplate, among
         other things,  realization of assets and payment of liabilities in
         the normal course of business.  However,  during the first quarter
         of 1997, the Company sold  substantially all of its mortgage loans
         and paid off a significant portion of its long-term debt and plans
         to cease operations in 1997 (See Notes 2, 4 and 5).

         In the opinion of the Company,  subject to the matter discussed in
         the preceding  paragraph,  the  accompanying  condensed  financial
         statements  contain all adjustments  (all of which were normal and
         recurring)  necessary to present fairly the financial  position as
         of June  30,  1997 and  December  31,  1996,  and its  results  of
         operations for the three-month and six-month periods ended June 30,
         1997 and 1996 and the  statements  of cash flows for the six-month
         periods ended June 30, 1997 and 1996.


(2)      INVESTMENT IN RESIDENTIAL MORTGAGE LOANS:

         On February 7, 1997,  the Company  sold  substantially  all of its
         remaining mortgage loans with an outstanding  principal balance of
         $2,366 on the date of purchase for an above par purchase  price to
         an  unaffiliated  investor and realized a gain on such sale of $65
         (See Note 5).

<PAGE> 7

(3)      VALUATION RESERVES:

         The  following   summarizes   valuation  reserves  for  losses  on
         investment in residential mortgage loans and real estate owned for
         the six months ended June 30, 1997 and 1996.

                                                                 Real Estate
                                                    Investments     Owned
                                                    -----------  -----------
           Balance at December 31, 1995                $1,544       $   -
           Provision for (recovery of) losses             (14)        (23)
           Write-offs                                      (8)          2
           Reclassification                               (22)         22
                                                       ------      ------
           Balance at June 30, 1996                    $1,500      $    1
                                                       ======      ======

           Balance at December 31, 1996                $   22      $    -
                                                       ------      ------
           Reclassification                               (22)         22
                                                       ------      ------
           Balance at June 30, 1997                    $   -       $   22
                                                       ======      ======


(4)      LONG-TERM DEBT:

         In accordance with the terms of an indenture, dated as of July 15,
         1980,  between the Company and The First National Bank of Chicago,
         as amended and supplemented ("Indenture"),  the Company issued, in
         1980 and 1981,  conventional  mortgage-backed  bonds with original
         principal balances of $100,000 ("Bonds").  As a result of the sale
         on February 7, 1997 of  substantially  all of the  mortgage  loans
         pledged to secure the Bonds,  the Trustee  paid  principal  on the
         Bonds in the  amount of $2,871  during  the first  quarter of 1997
         (See Note 5).

         The Company  secured  the Bonds  pursuant  to an  investment  in a
         significant number of conventional residential mortgage loans with
         high   loan-to-value   ratios  that  are  located   primarily   in
         energy-related  areas which in the mid 1980's  experienced a sharp
         decline in real estate values and high foreclosure rates. In 1987,
         the costs and losses associated with the repossession, maintenance
         and resale of  foreclosed  properties  increased  due to depressed
         resale values in these areas which,  in turn,  accelerated  claims
         against  available  blanket mortgage  insurance  coverage.  During
         1987, the Company  projected that, based on its accelerated  claim
         experience,  it  would  exhaust  the  blanket  mortgage  insurance
         coverage for the  conventional  mortgage  loan pools  securing the
         Bonds and such coverage was exhausted  during 1988. As a result of
         the exhaustion of the blanket mortgage  insurance coverage for the
         mortgage  pools,  losses  have  been  and may be  incurred  by the
         Company that previously were reimbursed by the mortgage insurer.


<PAGE> 8

         Under the terms of the  Indenture,  the Company  agreed to provide
         the Trustee with the periodic  reports  filed with the  Securities
         and Exchange Commission ("SEC") and to provide an annual statement
         to the bondholders.  The Company does not have, nor does it expect
         to have,  the cash funds to pay for the costs and  expenses of (a)
         the  annual  audit  of its  financial  statements  required  to be
         included in the annual report filed with the SEC or (b) the annual
         statement  to be provided  to the  bondholders.  Accordingly,  the
         financial  statements  included  in the  Company's  latest  annual
         report and those  included in the Company's  annual  reports filed
         with the SEC since 1991 are  unaudited and the Company did not and
         no longer intends to provide annual  statements to the bondholders
         which  results  in  non-compliance   with  a  covenant  under  the
         Indenture,  permitting  the Trustee or holders of 25% of the Bonds
         to accelerate their maturity.

         On May 28, 1992, the Trustee notified the Company that an Event of
         Default (as defined in the  Indenture) and a default have occurred
         under Section 6.01(4) and Section  6.01(2),  respectively,  of the
         Indenture.  The Trustee declared the outstanding principal balance
         of all of the  remaining  Bonds issued  under the  Indenture to be
         immediately  due and  payable.  Accordingly,  pursuant  to Section
         12.02(a) of the  Indenture,  the Company will no longer redeem any
         of the Bonds.

         As part of the Trustee's annual report to bondholders,  dated July
         14, 1992, the Trustee  notified the  bondholders of the notices to
         the Company on May 28,  1992  relating to the Event of Default and
         default under the Indenture and acceleration of all amounts due on
         the remaining  Bonds. In addition,  the Trustee enclosed a special
         report,  dated July 2, 1993,  ("July Report") with its 1993 annual
         report to the  bondholders  summarizing,  among other things,  the
         remedies  available  under the Indenture and the actions taken and
         proposed  to be taken by the  Trustee  relating  to the  Events of
         Default.  The Trustee  informed the bondholders in the July Report
         that it had retained AM&G Financial  Services,  Inc. (now known as
         First  Security  Capital  Markets and  hereinafter  referred to as
         "FSCM")  in the  last  half of  1992 to  review  and  analyze  the
         collateral  securing the Bonds. The July Report concludes that (a)
         the proceeds from the  liquidation of the collateral  would not be
         sufficient  to pay  either  series  of  Bonds  in full and (b) the
         projected  future cash flows from the collateral  will also result
         in a shortfall in repayment of principal for both series of Bonds.

         Subsequently,  the Trustee mailed another  special  report,  dated
         December 3, 1993 ("December Report"), to the bondholders to update
         the July Report and advise the bondholders of the course of action
         that had been  elected  by the  Trustee.  As part of the  December

<PAGE> 9

         Report, FSCM analyzed the collateral, including the reserve funds,
         using more current  information as of August 30, 1993 to determine
         the economic value to the  bondholders of immediately  liquidating
         the collateral and  distributing the proceeds from the liquidation
         to  the  bondholders,   compared  to  the  value  of  holding  the
         collateral  intact over the remaining  life of the Bonds and using
         the income stream generated from the collateral to pay the Bonds.

         Based on this analysis and after  considering the additional costs
         and risks to maintain  the trust estate  intact,  the Trustee also
         stated  in  the  December  Report  that  ". . .  the  Trustee  has
         determined  not to hold the Trust Estate,  but rather to liquidate
         the Trust Estate and distribute  the proceeds to the  Bondholders"
         and the Indenture will be terminated.

         The Trustee  informed the bondholders in the Trustee's 1994 annual
         report  to   bond-holders,   dated  July  15,   1994,   that  FSCM
         subsequently  obtained  appraised values and/or brokers' estimated
         values for all the properties  securing the mortgage loans.  Based
         on those values,  the Trustee stated that, due to the depreciation
         in the  value  of the  properties  to a  greater  extent  than was
         assumed previously, such depreciation in value is likely to have a
         significant effect on the bondholders'  ultimate recovery of their
         investment in the Bonds.

         The Trustee issued a special report, dated October 7, 1994, of the
         final findings of FSCM in which the Trustee stated their intent to
         hold the collateral for the present and review  periodically  this
         decision  with FSCM. As part of the  Trustee's  annual  reports to
         bondholders  for 1996 (dated  July 15,  1996) and 1995 (dated July
         15, 1995),  the Trustee stated in both reports it was not aware of
         any material change in the  assumptions or market  conditions used
         in their  decision in October 1994 to hold the  collateral for the
         present.

         The Trustee requested  reimbursement from the Company for costs of
         legal counsel and FSCM's collateral  evaluation  services relating
         to the Events of Default and for trust administration  services of
         the  Trustee.  The  Company  does not have,  nor does it expect to
         have, the cash funds to reimburse the Trustee for these costs. The
         Trustee may, in certain  instances,  apply moneys from the reserve
         funds or from the sale of the pledged collateral to the payment of
         expenses  incurred  and advances  made by the Trustee  pursuant to
         Section 7.07 of the  Indenture.  As of June 30, 1997,  the Trustee
         withdrew on a cumulative  basis $107 from the reserve fund for the
         Series A Bonds and the same amount of $107 from the  reserve  fund
         for the Series B Bonds for these costs.

         Except  for  the  quarterly  interest  payment  due the  Series  B
         bondholders on June 28, 1997, the Company had made timely payments
         due to the bondholders under the terms of the Indenture.  However,
         the Company  believed that the exhaustion of the blanket  mortgage
         insurance  coverage  for the  Bonds  issued  by the  Company,  the

<PAGE> 10

         anticipated  withdrawal by the Trustee for additional expenses and
         advances  for its trust  administration  services and for expenses
         and costs of the Events of  Default,  a  continuation  of the high
         costs and losses associated with foreclosures on pledged loans and
         the application by the Company of certain  proceeds from insurance
         claims,  principal  prepayments  and  foreclosures  to  payment of
         interest on the Bonds rather than to redemptions or prepayments of
         principal on the Bonds would in the future  cause a deficiency  in
         cash flows available for the payments due on the related Bonds and
         the eventual depletion of the cash reserve funds. In addition, the
         Bonds would have matured within the next 4 years in 2000 and there
         was a significant  shortfall in the principal balance and weighted
         average  interest rate earned on the pledged loans compared to the
         corresponding interest rates paid on the Bonds at the end of 1996.
         Such  events  would  cause the  Company at some  future date to be
         unable to meet its debt service  requirements  under the Indenture
         and holders of Bonds would receive less than the principal amounts
         due on their Bonds.

         At the end of 1996,  substantially  all of the remaining  mortgage
         loans were current and had good recent payment histories. In order
         to minimize the eventual losses to the  bondholders,  and based on
         the highest bid the Company  obtained from an investor to purchase
         these loans at an above par  purchase  price,  the Trustee  agreed
         with  the  Company  that  it  was  in  the  best  interest  of the
         bondholders  to sell  the  loans  and  distribute  the  liquidated
         collateral to them.

         U.S. Home Mortgage Corporation ("Mortgage"),  as servicer, was not
         obligated  to  advance  delinquent  payments  due on  the  pledged
         mortgage  loans unless it  reasonably  believed that such advances
         would ultimately be recoverable from mortgage insurance  proceeds.
         On March 27, 1991, Mortgage, as servicer, advised the Company that
         it would not advance delinquent  mortgage loan payments due to the
         uncertainty of the  recoverability of such advances.  As a result,
         the Trustee  withdrew a portion of the reserve  funds on March 28,
         1991 and March 30, 1992 to make the required  interest payments on
         the Series B Bonds and on August 28, 1996 to make such payments on
         the  Series A  Bonds.  In  addition  to the  withdrawals  from the
         reserve  funds by the  Trustee for bond  administration  costs and
         expenses,  the anticipated  cash flow  deficiencies to meet future
         debt  service  requirements  would have also  resulted  in further
         withdrawals  from each of the  reserve  funds  for both  series of
         Bonds  until  these  funds  were  eventually  exhausted.  The cash
         reserve   funds  for  the   Series  A  and  Series  B  Bonds  were
         substantially  depleted from the principal  payments paid on these
         Bonds during the first quarter of 1997. At June 30, 1997, funds on
         deposit with the Trustee,  including  the  remaining  cash reserve
         funds, totaled $47.



<PAGE> 11

(5)      LOAN SALE AND BOND PREPAYMENT:

         At the end of 1996,  the Company  obtained bids from  unaffiliated
         investors/brokers  to  purchase  the  remaining  loans  pledged to
         secure the Bonds  since most of these  loans were  current and had
         good recent payment  histories.  The Company requested the consent
         of the Trustee to sell the loans to the investor  with the highest
         bid of 102.75%  offering to  purchase  all of the loans which were
         not in foreclosure.

         As part of the Special  Reports  the Trustee  sent to the Series A
         bondholders  (dated  February  28,  1997)  and  to  the  Series  B
         bondholders  (dated March 28, 1997),  the Trustee  stated in those
         reports  that prior to  granting  their  consent to this  proposed
         sale,  the  Trustee  requested  its  mortgage  banking  affiliate,
         experienced in the sale of residential  mortgage  loans, to review
         the process by which the Company obtained the bids to determine if
         it  was  likely  to  have  resulted  in  receipt  of  bids  fairly
         reflecting  the market for such loans and assess the  fairness  of
         the bid.  The  Trustee  also  stated  in these  reports  that this
         affiliate concluded that the bid solicitation  process employed by
         the Company was  appropriate  and that the  accepted bid was fair.
         Accordingly,  the Trustee  exercised its rights under Section 6.04
         of the Indenture and consented to the sale.

         On February 7, 1997, the Company sold,  without  recourse,  all of
         its mortgage loans to this investor except for one loan pledged to
         secure the Series B Bonds which was in the process of foreclosure.
         During  February  and March,  1997,  the Trustee used the proceeds
         from this sale  together  with  payments  collected on these loans
         prior to the sale and funds from the respective cash reserve funds
         to pay  the  Series  A  Bonds  in  full  and to  make a  principal
         prepayment of $1,642 on the Series B Bonds.  At June 30, 1997, the
         outstanding principal balance of the Series B Bonds was $525.

         The  Company  does  not  have,  nor  expect  to have,  any  assets
         available  to make  further  payments  on the Series B Bonds other
         than the remaining  cash funds on deposit with the Trustee and the
         one  remaining   foreclosed   mortgage  loan  in  the  process  of
         liquidation  with  an  outstanding  principal  balance  of $36 and
         estimated net  realizable  value of $14. The Trustee stated in the
         Special  Report  (dated  March  28,  1997)  sent to the  Series  B
         bondholders that the Trustee expects,  and the Company agrees, the
         proceeds from the  liquidation of this loan will not be sufficient
         to repay the  remaining  principal  of the Series B Bonds in full.
         The  Trustee  further  stated  in this  report  that,  due to such
         insufficiency,  there will be no further  payments  of interest on
         the Series B Bonds.  Based on this  statement by the Trustee,  the
         Company  ceased   accruing   interest   expense   payable  on  the
         outstanding  Series B Bonds.  Therefore,  at June  30,  1997,  the
         outstanding bond principal  balance of $525 and interest  accruing
         on the  Series B Bonds is  substantially  not  recoverable  and is
         expected to result in a loss to the holders of the Series B Bonds.


<PAGE> 12

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

            Results of Operations -

            Interest  revenues and expenses  decreased during the three and
            six month  periods  ended June 30,  1997  compared  to the same
            periods  in  1996  due,  primarily,   to  a  reduction  in  the
            outstanding  principal  balances  of  the  mortgage  loans  and
            long-term  debt.  The reductions in the  outstanding  principal
            balances  of the  mortgage  loans and  long-term  debt are due,
            primarily,  to the sale of  substantially  all of the  mortgage
            loans and the principal  prepayment of a significant portion of
            the  related  long-term  debt  from  such  sale  proceeds.   In
            addition,  during  the  first  quarter  of  1997,  the  Company
            realized a gain from the sale of these loans.

            Financial Condition and Liquidity -

            At December 31, 1996, the Company had outstanding approximately
            $3,396,000 of  mortgage-backed  bonds ("Bonds") issued pursuant
            to an indenture ("Indenture") under two series of publicly held
            debt. On May 28, 1992,  the Trustee for the Bonds  notified the
            Company  that an Event of Default had occurred and declared the
            outstanding  principal  balance of the Bonds  issued  under the
            Indenture to be immediately due and payable.

            The  Company  did not  have,  nor did it  expect  to have,  any
            significant assets other than the mortgage loans, reserve funds
            and primary mortgage  insurance  policies pledged as collateral
            for the remaining Bonds. Accordingly,  the Company's ability to
            pay the  principal  and interest on the Bonds when due depended
            on  the  ongoing  cash  flows  and  any  liquidation   proceeds
            generated by the pledged loans and the funds available from the
            cash  reserve  funds and  coverage  under the primary  mortgage
            insurance policies.

            The  Company had made timely  payments  due to the  bondholders
            under the terms of the Indenture. However, the Company believed
            that the exhaustion of the blanket mortgage  insurance coverage
            for the Bonds issued by the Company, the anticipated withdrawal
            by the Trustee to pay for its trust administration services and
            for  the  expenses  and  costs  of the  Events  of  Default,  a
            continuation  of the high  costs  and  losses  associated  with
            foreclosures  on  pledged  loans  and  the  application  by the
            Company of certain  proceeds from insurance  claims,  principal
            prepayments  and  foreclosures  to payment of  interest  on the
            Bonds rather than to redemptions or prepayments of principal on
            the Bonds would have in the future  caused a deficiency in cash
            flows  available  for the payments due on the related Bonds and

<PAGE> 13

            the eventual  depletion of the cash reserve funds. In addition,
            the  Bonds  matured  within  4 years in 2000  and  there  was a
            significant  shortfall  in the  principal  balance and weighted
            average  interest rate earned on the pledged loans  compared to
            the corresponding  principal balance and interest rates paid on
            the Bonds at the end of 1996. Such events would have caused the
            Company  at some  future  date to be  unable  to meet  its debt
            service  requirements  under the Indenture and holders of Bonds
            would  receive  less than the  principal  amounts  due on their
            Bonds.

            At the end of 1996, the Company obtained bids from unaffiliated
            investors/brokers  to purchase the  remaining  loans pledged to
            secure the Bonds since most of these loans were current and had
            good  recent  payment  histories.  The  Company  requested  the
            consent  of the  Trustee  to sell the  loans  at an  above  par
            purchase price to the investor with the highest bid offering to
            purchase all of the loans which were not in foreclosure.

            The Trustee  disclosed  in Special  Reports to the  bondholders
            that prior to granting its consent to this proposed  sale,  the
            Trustee requested its mortgage banking  affiliate,  experienced
            in the  sale of  residential  mortgage  loans,  to  review  the
            process by which the Company  obtained the bids to determine if
            it was  likely  to have  resulted  in  receipt  of bids  fairly
            reflecting the market for such loans and assess the fairness of
            the bid. The Trustee also stated this affiliate  concluded that
            the  bid  solicitation  process  employed  by the  Company  was
            appropriate  and that the accepted  bid was fair.  Accordingly,
            the Trustee  exercised  its rights  under  Section  6.04 of the
            Indenture and consented to the sale.

            On February 7, 1997,  the Company sold without  recourse all of
            its  mortgage  loans to this  investor  except  for one loan in
            default and pledged to secure the Series B Bonds which has been
            subsequently  foreclosed  and is awaiting  liquidation.  During
            February and March,  1997,  the Trustee used the proceeds  from
            this sale together with payments collected on these loans prior
            to the sale and funds from the respective cash reserve funds to
            pay  the  Series  A  Bonds  in  full  and to  make a  principal
            prepayment  of  $1,642,200  on the Series B Bonds.  At June 30,
            1997, the outstanding  principal  balance of the Series B Bonds
            was $525,300.

            The  Company  does not have,  nor  expect to have,  any  assets
            available to make further  payments on the Series B Bonds other
            than the  remaining  cash funds on deposit  with the Trustee of
            $46,700 and the one remaining  foreclosed  mortgage loan in the
            process of liquidation with an outstanding principal balance of
            $36,100  (and  with  an  estimated  net  realizable   value  of
            $14,000). The Trustee expects, and the Company agrees, that the
            proceeds  from  the  liquidation  of  this  loan  will  not  be
            sufficient  to repay the  remaining  principal  of the Series B

<PAGE> 14

            Bonds  in  full.   The  Trustee  also  informed  the  Series  B
            bondholders that, due to such  insufficiency,  there will be no
            further payments of interest on the Series B Bonds.  Therefore,
            at June 30, 1997, the  outstanding  bond  principal  balance of
            $525,300  and  interest  accruing  on the  Series  B  Bonds  is
            substantially  not  recoverable  and is expected to result in a
            loss to the holders of the Series B Bonds.

            In  addition,  the Company  does not have the funds to repay the
            payable of  $1,584,000  to U.S.  Home Mortgage Corporation.

            For additional information, see "Notes 2, 4 and 5 of Notes to
            Condensed Financial Statements."

Item 3.     Defaults Upon Senior Securities.
            --------------------------------

            On May 28, 1992, the Trustee notified the Company that an Event
            of Default  (as  defined in the  Indenture)  had  occurred  and
            declared  the  outstanding  principal  balance  of  all  of the
            remaining  Bonds issued under the  Indenture to be  immediately
            due and payable.

            For additional information, see "Notes 2, 4 and 5 of Notes to
            Condensed Financial Statements."

<PAGE> 15

PART II - OTHER INFORMATION

Item 6.     Exhibits and Reports on Form 8-K
            --------------------------------

            (a)  Exhibits

                 Exhibit 11 - Computation of Income (Loss) Per Common Share.

                 Exhibit 27 - Financial Data Schedule.

            (b)  Reports on Form 8-K

                 No  Current  Report on Form 8-K was  filed by the  Company
                 during the three months ended June 30, 1997.



                                 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.


                                 C.M. CORP.
                                (Registrant)


Date:   August 11, 1997              /s/ James R. Petty
                                    -------------------
                                    (James R. Petty)
                                    President and Chief Executive Officer
                                    (principal executive officer)


Date:   August 11, 1997              /s/ Ronald C. McCabe
                                    ---------------------
                                    (Ronald C. McCabe)
                                    Senior Vice President and Chief
                                    Accounting Officer (principal
                                    accounting officer)


<PAGE> 16

                             INDEX OF EXHIBITS


 Exhibit                                                              Page
 Number                                                              Number
 ------                                                              ------

     11          Computation of Income (Loss) Per Common Share         17

     27          Financial Data Schedule                               18