UNITED STATES
                       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 AND
                              EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 1999

                                       OR

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

                           Commission File No. 1-12655

                          HomeSide International, Inc.
             (Exact name of registrant as specified in its charter)

            Delaware                                  59-3387041
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
 incorporation or organization)

                   7301 Baymeadows Way, Jacksonville, FL 32256
               (Address of principal executive offices) (Zip Code)

                                 (904) 281-3000
              (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 __



Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

           Class                                  Outstanding at August 13, 1999

Common stock $0.01 par value                                  1
Class C non-voting common stock $1.00 par value              none


                                       1
<PAGE>


                              FINANCIAL INFORMATION

ITEM 1.  Financial Statements
<TABLE>
<CAPTION>
                          HOMESIDE INTERNATIONAL, INC.
                           CONSOLIDATED BALANCE SHEETS

                    (Dollars in Thousands, Except Share Data)

                                                                                          (Unaudited)
                                                                                        June 30, 1999       September 30, 1998
                                                                                       -------------------   -----------------------
ASSETS
<S>                                                                                    <C>                   <C>

Cash and cash equivalents                                                                 $   198,725               $    35,008
Mortgage loans held for sale, net                                                           1,604,120                 2,048,989
Mortgage servicing rights, net                                                              3,272,691                 1,779,180
Early pool buyout advances                                                                    354,833                   759,579
Accounts receivable, net                                                                      227,123                   272,005
Premises and equipment, net                                                                    59,460                    45,657
Goodwill, net                                                                                 670,017                   693,543
Other assets                                                                                   89,019                   117,596
                                                                                       -------------------   -----------------------
Total Assets                                                                              $ 6,475,988               $ 5,751,557
                                                                                       ===================   =======================

LIABILITIES AND STOCKHOLDER'S EQUITY


Notes payable                                                                             $ 3,084,500               $ 2,749,000
Accounts payable and accrued liabilities                                                      600,666                   241,302
Deferred income taxes                                                                         201,862                   160,520
Long-term debt                                                                              1,333,142                 1,337,783
                                                                                       -------------------   -----------------------
Total Liabilities                                                                           5,220,170                 4,488,605
                                                                                       -------------------   -----------------------

Stockholder's Equity:
Common stock:
     Common stock, $.01 par value, 100 shares authorized and 1 share issued and
         outstanding                                                                              -                        -
     Class C non-voting common stock, $1.00 par value, 195,000 shares
         authorized, and 0 shares issued and outstanding                                          -                        -
Additional paid-in capital                                                                  1,231,302                 1,227,846
Retained earnings                                                                              24,516                    35,106
                                                                                       -------------------   -----------------------
Total Stockholder's Equity                                                                  1,255,818                 1,262,952
                                                                                       -------------------   -----------------------
Total Liabilities and Stockholder's Equity                                                $ 6,475,988               $ 5,751,557
                                                                                       ===================   =======================
</TABLE>







                 The accompanying notes are an integral part of
                          these financial statements.



                                       2
<PAGE>


<TABLE>
<CAPTION>


                          HOMESIDE INTERNATIONAL, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

                             (Dollars in Thousands)


                                            For the Three          For the Three
                                            Months Ended           Months Ended
                                            June 30, 1999          June 30, 1998
                                          ------------------    --------------------
<S>                                       <C>                   <C>

REVENUES:

Mortgage servicing fees                            $163,461                $118,334
Amortization of mortgage servicing rights          (118,759)                (74,476)
                                          ------------------    --------------------
    Net servicing revenue                            44,702                  43,858

Interest income                                      43,754                  39,003
Interest expense                                    (32,298)                (29,793)
                                          ------------------    --------------------
    Net interest revenue                             11,456                   9,210

Net mortgage origination revenue                     45,685                  34,341
Other income                                          2,067                   8,783
                                          ------------------    --------------------
    Total Revenues                                  103,910                  96,192

EXPENSES:

Salaries and employee benefits                       32,639                  29,381
Occupancy and equipment                               6,898                   5,006
Servicing losses on investor-owned loans
   and foreclosure-related expenses                  10,822                   8,387
Goodwill amortization                                 8,966                   8,919
Other expenses                                       15,459                  15,498
                                          ------------------    --------------------
    Total Expenses                                   74,784                  67,191

Income before income taxes                           29,126                  29,001
Income tax expense                                   14,354                  14,789
                                          ------------------    --------------------
Net income                                          $14,772                 $14,212
                                          ==================    ====================
</TABLE>








                 The accompanying notes are an integral part of
                          these financial statements.



                                       3
<PAGE>

<TABLE>
<CAPTION>


                          HOMESIDE INTERNATIONAL, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)


                             (Dollars in Thousands)

                                                                                                                    Predecessor
                                                                    For the Nine          For the Period          For the Period
                                                                    Months Ended         from February 11,       from September 1,
                                                                   June 30, 1999              1998 to            1997 to February
                                                                                           June 30, 1998             10, 1998
                                                                  -----------------     --------------------    --------------------
<S>                                                               <C>                   <C>                     <C>
REVENUES:

Mortgage servicing fees                                                   $442,088                 $182,601                $194,690
Amortization of mortgage servicing rights                                 (299,247)                (111,842)               (107,458)
                                                                  -----------------     --------------------    --------------------
    Net servicing revenue                                                  142,841                   70,759                  87,232

Interest income                                                            140,352                   57,293                  51,166
Interest expense                                                           (99,830)                 (45,246)                (51,074)
                                                                  -----------------     --------------------    --------------------
    Net interest revenue                                                    40,522                   12,047                      92

Net mortgage origination revenue                                           125,610                   48,610                  46,695
Other income                                                                 4,580                    9,403                     635
                                                                  -----------------     --------------------    --------------------
    Total Revenues                                                         313,553                  140,819                 134,654


EXPENSES:

Salaries and employee benefits                                             100,967                   44,011                  36,137
Occupancy and equipment                                                     20,042                    7,400                   7,820
Servicing losses on investor-owned loans
   and foreclosure-related expenses                                         29,465                   10,210                  11,465
Goodwill amortization                                                       26,844                   13,860                     283
Other expenses                                                              47,856                   23,694                  19,085
                                                                  -----------------     --------------------    --------------------
    Total Expenses                                                         225,174                   99,175                  74,790

Income before income taxes                                                  88,379                   41,644                  59,864

Income tax expense                                                          44,434                   21,647                  23,347
                                                                  -----------------     --------------------    --------------------
Net income                                                                 $43,945                  $19,997                 $36,517
                                                                  =================     ====================    ====================


</TABLE>




                 The accompanying notes are an integral part of
                          these financial statements.




                                       4
<PAGE>

<TABLE>
<CAPTION>

                          HOMESIDE INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)

                             (Dollars in Thousands)


                                                                            For the Three          For the Three
                                                                             Months Ended           Months Ended
                                                                            June 30, 1999           June 30, 1998
                                                                          -------------------   ---------------------
<S>                                                                       <C>                   <C>
CASH FLOWS  PROVIDED BY OPERATING ACTIVITIES:

Net income                                                                   $  14,772               $   14,212
Adjustments to reconcile net income to net cash provided by operating
      activities:
  Amortization of mortgage servicing rights                                    118,759                   74,476
  Depreciation and amortization                                                 10,077                   10,340
  Servicing losses on investor-owned loans                                       2,784                    3,954
  Change in deferred income tax liability                                       14,322                   12,080
  Origination, purchase and sale of loans held for sale, net of
     repayments                                                                245,672                  273,004
  Change in accounts receivable                                                 (2,107)                  32,633
  Change in other assets and accounts payable and accrued
     liabilities                                                                 8,380                  (41,177)
                                                                          -------------------   ---------------------
Net cash provided by operating activities                                      412,659                  379,522

CASH FLOWS USED IN INVESTING ACTIVITIES:

Purchase of premises and equipment, net                                         (6,913)                  (6,081)
Acquisition of mortgage servicing rights                                      (319,536)                (137,442)
Net (purchase of) proceeds from risk management contracts                      (69,249)                 128,930
Early pool buyout reimbursements (advances)                                     98,494                  (74,230)
Acquisition of Bank One Mortgage servicing assets                                  -                   (201,000)
                                                                          -------------------   ---------------------
Net cash used in investing activities                                         (297,204)                (289,823)

CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:

Net borrowings from (repayments to)  banks                                     140,001                 (433,347)
Repayments of commercial paper, net of repayments                              (88,698)                     -
Issuance of notes payable                                                          -                    350,000
Payment of debt issue costs                                                        -                     (2,888)
Repayment of long-term debt                                                       (122)                    (122)
Dividends paid to the Parent                                                   (24,000)                     -
                                                                          -------------------   ---------------------
Net cash provided by (used in) financing activities                             27,181                  (86,357)
Net increase in cash and cash equivalents                                      142,636                    3,342
Cash and cash equivalents at beginning of period                                56,089                   14,045
                                                                          -------------------   ---------------------
Cash and cash equivalents at end of period                                   $ 198,725                $  17,387
                                                                          ===================   =====================

Supplemental disclosure of cash flow information:
Interest paid                                                                $  28,287                $ 35,002
Income taxes paid                                                            $      32                   2,657

</TABLE>



                 The accompanying notes are an integral part of
                          these financial statements.

                                       5
<PAGE>
<TABLE>
<CAPTION>

                          HOMESIDE INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)

                             (Dollars in Thousands)

                                                                                                                   Predecessor
                                                                   For the Nine        For the Period from     For the Period from
                                                                   Months Ended         February 11, 1998       September 1, 1997
                                                                   June 30, 1999         to June 30, 1998      to February 10, 1998
                                                                 ------------------    ---------------------   ---------------------
<S>                                                              <C>                   <C>                     <C>
CASH FLOWS  PROVIDED BY (USED IN) OPERATING ACTIVITIES:

Net income
                                                                       $  43,945                $  19,997               $  36,517
Adjustments to reconcile net income to net cash provided by
(used in)operating activities:
  Amortization of mortgage servicing rights                              299,247                  111,842                 107,458
  Depreciation and amortization                                           29,251                   15,685                   5,037
  Servicing losses on investor-owned loans                                 9,419                    5,147                   5,781
  Change in deferred income tax liability                                 41,342                   18,939                  20,758
  Origination, purchase and sale of loans held for sale, net of
    repayments                                                           444,869                 (85,891)                (211,035)
  Change in accounts receivable                                           35,232                 (23,829)                 (48,484)
  Change in other assets and accounts payable and accrued
    liabilities                                                          127,302                  82,885                  (73,723)
                                                                 ------------------    ---------------------------------------------
Net cash provided by (used in) operating activities                    1,030,607                 144,775                 (157,691)

CASH FLOWS USED IN INVESTING ACTIVITIES:

Purchase of premises and equipment, net                                  (19,225)                 (9,963)                 (12,037)
Acquisition of mortgage servicing rights                                (992,348)               (299,701)                (261,387)
Net (purchase of) proceeds from risk management contracts               (543,710)                143,115                  218,306
Early pool buyout reimbursements (advances)                              404,746                (149,140)                  (5,692)
Acquisition of Bank One Mortgage servicing assets                            -                  (201,000)                     -
                                                                 ------------------    ---------------------   ---------------------
Net cash used in investing activities                                 (1,150,537)               (516,689)                 (60,810)

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:

Net (repayments to) borrowings from banks                               (850,898)                (49,556)                 206,627
Issuance of commercial paper, net of repayments                        1,189,502                     -                        -
Issuance of notes payable                                                    -                   410,000                   45,000
Payment of debt issue costs                                                  -                    (3,096)                    (886)
Repayment of long-term debt                                                 (424)                   (160)                    (358)
Dividends paid to the Parent                                             (54,533)                    -                        200
                                                                 ------------------    ---------------------   ---------------------
Net cash provided by financing activities                                283,647                 357,188                  250,583
Net increase (decrease) in cash and cash equivalents                     163,717                 (14,726)                  32,082
Cash and cash equivalents at beginning of period                          35,008                  32,113                       31
                                                                 ------------------    ---------------------   ---------------------
Cash and cash equivalents at end of period                             $ 198,725               $  17,387                $  32,113
                                                                 ==================    =====================   =====================

Supplemental disclosure of cash flow information:
Interest paid                                                          $ 133,452               $  48,605                $  52,922
Income taxes paid                                                      $  18,818               $   2,657                $     821

</TABLE>






                 The accompanying notes are an integral part of
                          these financial statements.


                                       6
<PAGE>





                          HOMESIDE INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.   BASIS OF PRESENTATION

     The accompanying  consolidated  financial  statements 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.  Accordingly,  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  adjustments)  considered  necessary for a fair presentation have been
included.

     On February  10, 1998,  National  Australia  Bank,  Ltd.  (the  "National")
acquired all outstanding  shares of the common stock of HomeSide  International,
Inc.  ("HomeSide" or the  "Company")  and HomeSide  adopted a fiscal year end of
September  30 to  conform  to the  fiscal  year  of the  National.  Accordingly,
comparative  financial  statements  for the same nine month  period in the prior
year have not been presented.  Instead, a comparison of the periods of the prior
year that most closely correspond to the present nine month period is presented.
HomeSide's  operating results for the present nine month period are not directly
comparable  to its  historical  operating  results  due, in part,  to  different
balance sheet valuations  (estimated fair value as compared to historical cost).
In addition,  because  HomeSide's  operating results are produced on a quarterly
basis, it is not practicable to furnish a period prior to February 11, 1998 that
corresponds  to any  period  other  than the period  reported  according  to the
predecessor's prior fiscal year periods.

     Operating  results for the three and nine months ended June 30,  1999,  the
three months ended June 30, 1998,  the period from February 11, 1998 to June 30,
1998, and the predecessor period from September 1, 1997 to February 10, 1998 are
not  necessarily  indicative  of the results that may be expected for the fiscal
period  ending  September  30,  1999.  For  further  information,  refer  to the
consolidated  financial  statements and footnotes  thereto  included in the Form
10-K for the period from  February  11, 1998 to  September  30, 1998 of HomeSide
International, Inc.

2.   ORGANIZATION

     On December 11, 1995, HomeSide was formed by an investor group,  consisting
of Thomas H. Lee  Company  and  Madison  Dearborn  Partners  (collectively,  the
"Investors"),  and signed a definitive  stock purchase  agreement with The First
National  Bank of Boston  ("BankBoston")  for the purpose of  acquiring  certain
assets and  liabilities  of the mortgage  banking  business owned by BankBoston.
BankBoston received cash and an ownership interest in HomeSide.  The transaction
closed on March 15, 1996 and HomeSide began operations on March 16, 1996.

     On May 31,  1996,  Barnett  Banks,  Inc.  ("Barnett")  sold  certain of its
mortgage  banking  operations,   primarily  its  servicing  portfolio,  mortgage
servicing  operations and proprietary  mortgage  banking  software  systems,  to
HomeSide . Barnett  received  cash and an  ownership  interest in HomeSide . The
accompanying   financial  statements  reflect  the  effects  of  both  of  these
acquisitions.  From May 31, 1996 until the 1997 public offering of common stock,
the  Investors,  BankBoston  and Barnett each owned  approximately  one-third of
HomeSide . Following the public offering, the Investors,  BankBoston and Barnett
owned in the aggregate approximately 79% of the outstanding common stock.

     On January 9, 1998, NationsBank  Corporation,  now BankAmerica Corporation,
acquired all the outstanding common stock of Barnett Banks, Inc.

     On February 10, 1998, the National  acquired all outstanding  shares of the
common stock of HomeSide. As consideration,  the National paid $27.825 per share
for all of the  outstanding  common  stock and $17.7  million cash to retire all
outstanding  stock  options.  The total purchase  price was  approximately  $1.2
billion.  The National paid for the purchase with borrowed and available  funds.
The  transaction  was accounted for as a purchase.  As a result,  all assets and
liabilities  were  recorded at their fair value on February  11,  1998,  and the
purchase  price in excess of the fair  value of net  assets  acquired  of $713.6
million was recorded as goodwill. Following the transaction described above, the
National now owns 100% of the Company's  common stock and the Company has become
an indirect  wholly-owned  subsidiary of the  National.  HomeSide also adopted a
fiscal year end of September 30 to conform to the fiscal year of the National.



3.       ACQUISITIONS

      On  November  23,  1998,   HomeSide  agreed  to  purchase  or  sub-service
approximately  $5 billion in mortgage  servicing from People's Bank, the largest
mortgage lender in Connecticut.  People's Bank also became a Preferred  Partner,
committing to sell a significant  portion of the  residential  mortgage loans it
originates to HomeSide for five years.

      On March 4, 1999, HomeSide agreed to purchase or sub-service the servicing
portfolio  of  First  Chicago  NBD  Mortgage  Company  ("First  Chicago").  This
transaction  represents an expansion of HomeSide's  strategic alliance with Banc
One Mortgage  Corporation and an increase in HomeSide's  servicing  portfolio of
approximately $18 billion. In addition,  First Chicago has committed to sell the
servicing rights associated with its residential mortgage production to HomeSide
on a flow basis.

      On June 15,  1999,  HomeSide  announced  that it had  formed  a  strategic
alliance with Cendant Mortgage Corporation.  Cendant Mortgage has agreed to sell
up to $7.0 billion in mortgage  servicing  assets  annually to HomeSide over a 5
year period.  Since  December 31, 1998,  HomeSide has purchased and will service
$7.0 billion of Cendant Mortgage's portfolio,  representing approximately 60,000
loans.  Cendant  Mortgage is the sixth largest  retail  originator in the United
States.

4.   CASH AND CASH EQUIVALENTS

Cash and cash  equivalents  include  cash and due from  banks,  interest-bearing
deposits, and margin deposits with an original maturity of three months or less.
Margin  deposits  associated  with  the risk  management  program  for  mortgage
servicing rights are maintained with brokers in accordance with the requirements
of  International  Swap Dealer  Agreements.  At June 30, 1999,  margin  deposits
amounted to approximately $157.1 million.

5.   MORTGAGE SERVICING RIGHTS

The  change in the  balance of  mortgage  servicing  rights  was as follows  (in
thousands):

Balance, September 30, 1998                $1,779,180
Additions                                     992,348
Sales of servicing                                -
Deferred hedge loss                           800,410
Amortization                                 (299,247)
                                        -----------------
Balance, June 30, 1999                     $3,272,691
                                        =================

6.       NOTES PAYABLE

Notes payable consist of the following (in thousands):
<TABLE>
<CAPTION>
                                                                               Weighted Average Interest Rate
                                                    Total Outstanding       At Period End       During the Period
                                                  ----------------------    -------------       -----------------
<S>                                               <C>                       <C>                 <C>
Commercial paper                                      $ 1,189,500               4.96%                 4.96%
National Australia Bank unsecured facility              1,895,000               4.96%                 4.96%
                                                  ======================
  Total, June 30, 1999                                $ 3,084,500
                                                  ======================
Bank line of credit                                   $   995,000               5.88%                 5.96%
National Australia Bank unsecured facility              1,754,000               5.66%                 5.67%
                                                  ======================
  Total, September 30, 1998                           $ 2,749,000
                                                  ======================
</TABLE>


     On October 21, 1998,  HomeSide  Lending,  Inc.  established  a $1.5 billion
commercial paper program. The program is supported by the Company's bank line of
credit and outstanding  commercial paper reduces available  borrowings under the
bank line of credit.  At June 30, 1999,  a total of $1.2  billion of  commercial
paper was  outstanding.  The weighted average interest rates on commercial paper
outstanding  during the three and nine month  periods  ended June 30,  1999 were
4.96% and 5.10%, respectively.

     On June 23,  1998,  HomeSide  entered  into an  agreement  for an unsecured
revolving  credit facility with the National.  The agreement was amended on June
22, 1999.  Under the credit  facility,  HomeSide can borrow up to $2.5  billion,
subject  to limits  imposed  by  regulatory  authorities.  As of June 30,  1999,
Australian financial regulations limited the National's ability to lend funds to
HomeSide, a non-bank affiliate, to approximately $2.1 billion.  Borrowings under
the credit facility may be overnight or for periods of 7, 30, 60 or 90 days. For
overnight  borrowings,  the  interest  rate is  determined  by HomeSide  and the
National  at the  time of the  borrowing.  For  LIBOR -  based  borrowings,  the
interest rate is charged at the corresponding  LIBOR rate. At June 30, 1999, the
amount outstanding under this credit facility totaled $1.9 billion. The weighted
average  interest  rate on  outstanding  borrowings  under this credit  facility
during  the three and nine  month  periods  ended  June 30,  1999 were 4.96% and
5.18%, respectively.

     HomeSide  borrows funds on a demand basis from an independent  syndicate of
banks under a $2.0 billion credit  facility  which,  at the request of HomeSide,
may be increased to $3.0 billion.  The line of credit  includes both a warehouse
credit facility,  which is limited to 98% of the fair value of eligible mortgage
loans held for sale, and a servicing-related facility, which is capped at $760.0
million.  Borrowings  under the bank line of credit  bear  interest at rates per
annum,  based on, at  HomeSide's  option (A) the  highest of (i) the lead bank's
prime rate,  (ii) the secondary  market rate of certificates of deposit plus 100
basis  points and (iii) the federal  funds rate in effect from time to time plus
0.5% or (B) various rates based on federal fund rates. On February 14, 2000, the
line of credit will  terminate.  The credit  agreement  contains  covenants that
impose  limitations  and  restrictions  on HomeSide,  including  requirements to
maintain certain net worth and ratio requirements.  Under certain  circumstances
set  forth in the  credit  agreement,  borrowings  under  the  agreement  become
collateralized  by  HomeSide's  assets.  HomeSide  is  in  compliance  with  all
requirements included in the credit agreement. At June 30, 1999, the primary use
of the credit  facility was to provide  liquidity  back-up for  HomeSide's  $1.5
billion commercial paper program and there was no balance  outstanding under the
credit line.  At September  30, 1998,  the amount  outstanding  under the credit
line, all of which was under the warehouse credit facility, was $1.0 billion.

7.   LONG-TERM DEBT

11.25 % Notes

      On May 14,  1996,  HomeSide  issued  $200.0  million of 11.25%  notes (the
"Parent Notes")  maturing on May 15, 2003, and paying  interest  semiannually in
arrears on May 15 and November 15 of each year.  The Parent Notes are redeemable
at the option of HomeSide,  in whole or in part, at any time on or after May 15,
2001, at certain fixed redemption  prices. The indenture contains covenants that
impose limitations and restrictions,  including requirements to maintain certain
net worth and ratio requirements. In addition, the Parent Notes are secured by a
second priority pledge of the common stock of HomeSide  Lending.  HomeSide is in
compliance with all net worth and ratio  requirements  included in the indenture
relating to the Parent  Notes.  HomeSide used a portion of the proceeds from its
February 5, 1997 offering of common stock to pre-pay $70.0 million of the Parent
Notes at a premium of $7.9 million.  The amount outstanding at June 30, 1999 was
$130.0 million.  The balance of the Parent Notes at June 30, 1999, including the
fair value  adjustment  resulting from the merger with the National,  was $148.1
million.

Medium-term notes

        As of June 30, 1999,  outstanding  medium-term  notes issued by HomeSide
Lending under a $1.6 billion shelf  registration  statement  were as follows (in
thousands):

Issue Date           Outstanding Balance     Coupon Rate    Maturity Date

May 20, 1997             $   250,000            6.875%        May 15, 2000
June 30, 1997                200,000            6.875%        June 30, 2002
June 30, 1997                 40,000            6.820%        July 2, 2001
July 1, 1997                  15,000            6.860%        July 2, 2001
July 31, 1997                200,000            6.750%        August 1, 2004
September 15, 1997            45,000            6.770%        September 17, 2001
March 19, 1998                60,000            5.6875%       March 20, 2000
April 23, 1998               125,000            5.7875%       April, 24, 2001
May 22, 1998                 225,000            6.200%        May 15, 2003
                   --------------------------
  Total                   $1,160,000
                   ==========================

      As of June  30,  1999,  $850.0  million  of the  outstanding,  fixed  rate
medium-term  notes  had  been  effectively   converted  by  interest  rate  swap
agreements to  floating-rate  notes.  The weighted  average  borrowing  rates on
medium-term borrowings issued for the three and nine months ended June 30, 1999,
including the effect of the interest rate swap agreements, were 5.49% and 5.74%,
respectively.  Net proceeds from the issuances were primarily used to reduce the
amounts  outstanding under the bank credit agreement and to fund the acquisition
of the servicing rights associated with Bank One's $16.6 billion portfolio.

      The balance of the medium-term notes at June 30, 1999,  including the fair
value adjustment resulting from the merger with the National,  was $1.2 billion,
made up of $0.9 billion classified as long-term debt and $0.3 billion classified
as current portion of long-term debt.

Mortgage note payable

          In connection with the acquisition of BancBoston Mortgage Corporation,
HomeSide  assumed a mortgage note payable that is due in 2017 and bears interest
at a stated  rate of  9.5%.  HomeSide's  main  office  building  is  pledged  as
collateral for the mortgage note payable. The balance of the mortgage payable at
June 30, 1999,  including the fair value  adjustments  resulting from the merger
with the National, was $23.9 million.

8.   EARLY POOL BUYOUT ADVANCES AND SALES

        On November 30, 1998, HomeSide Lending formed a wholly-owned subsidiary,
HomeSide Funding,  Inc. ("HomeSide  Funding"),  whose sole purpose is to acquire
delinquent loans from HomeSide Lending's servicing portfolio that are insured by
the Federal Housing  Administration  or guaranteed by the Department of Veterans
Affairs. The purchases are funded through sales to a trust.  HomeSide Funding is
a non-consolidated, qualifying special purpose entity.

        In December 1998,  HomeSide Lending entered into a Pooling and Servicing
Agreement with Bank One Trust Company,  N.A., as Trustee,  and HomeSide Funding,
as Transferor,  pursuant to which approximately $184 million and $467 million of
delinquent  mortgage  loans were sold to HomeSide  Funding  during the three and
nine month periods ending June 30, 1999, respectively. Subsequently, these loans
were sold to the HomeSide  Mortgage Loan Buyout Trust 1998-A.  At June 30, 1999,
HomeSide  held a  residual  interest  in loans sold to  HomeSide  Funding in the
amount of $22.1 million, which approximated fair value.

9.       NEW ACCOUNTING STANDARDS

      In June 1998, the Financial Accounting Standards Board issued Statement of
Financial  Accounting Standard No. 133,  "Accounting for Derivative  Instruments
and Hedging Activities" ("FAS 133"). This statement  standardizes the accounting
for derivative  instruments  and hedging  activities by requiring that an entity
recognize  those items as assets or  liabilities  in the  statement of financial
position  and  measure  them at fair  value.  If certain  conditions  are met, a
derivative  instrument  may be  specifically  designated  as (a) a hedge  of the
exposure to changes in the fair value of a recognized asset or liability,  or of
an unrecognized  firm commitment,  (b) a hedge of the exposure to variability in
the cash flows of a recognized asset, liability or forecasted transaction or (c)
a hedge of the foreign currency exposure of an unrecognized firm commitment,  an
available-for-sale  security, a forecasted  transaction or a net investment in a
foreign operation. In June 1999, the Financial Accounting Standards Board issued
Statement of Financial  Accounting Standards No. 137, "Accounting for Derivative
Instruments  and Hedging  Activities  - Deferral of the  Effective  Date of FASB
Statement  No. 133 - an Amendment  of FASB  Statement  No. 133." This  statement
deferred  the  effective  date of FAS 133 to fiscal  quarters  of  fiscal  years
beginning  after June 15, 2000.  Management has not yet determined the impact of
these statements on the financial statements of HomeSide.

        In  October  1998,  the  Financial  Accounting  Standards  Board  issued
Statement  of  Financial   Accounting   Standards  No.  134,   "Accounting   for
Mortgage-Backed  Securities Retained after Securitization of Mortgage Loans Held
for Sale by a  Mortgage  Banking  Enterprise."  This  statement  further  amends
Statement No. 65 to require that after the securitization of mortgage loans held
for sale,  an  entity  engaged  in  mortgage  banking  activities  classify  the
resulting  mortgage-backed  securities or other retained  interests based on its
ability  and  intent  to sell or hold  those  investments.  This  statement  was
effective  for the first  fiscal  quarter  beginning  after  December  15, 1998.
Management has determined that the impact of this statement on the  presentation
of the financial statements of HomeSide is immaterial.

10.      DIVIDENDS

      On April 1, 1999 and October 1, 1998 the  Company  paid  dividends  to the
Parent in the amounts of $24.0 million and $30.5 million, respectively.

11.      SUBSEQUENT EVENTS

     On  July  30,  1999,  HomeSide's  primary  operating  subsidiary,  HomeSide
Lending,  Inc., filed a Registration  Statement on Form S-3 (Registration Number
333-84179) (the "Shelf Registration Statement") with the Securities and Exchange
Commission  registering  $1 billion in senior  unsecured  debt  securities.  The
prospectus included in the Shelf Registration Statement is a combined prospectus
and also relates to the  remaining  unsold debt  securities  having an aggregate
offering price of $408,000,000 previously registered by HomeSide. The notes will
have stated  maturities  of nine months or more from the date issued.  The notes
may bear interest at fixed or floating rates or may not bear any interest.  When
effective,  $1.4 billion will be available for future  issuance  under the Shelf
Registration Statement.

     On August 11, 1999,  HomeSide Lending,  Inc. issued $230.0 million floating
rate notes due August 16,  2000 under Rule 144A of the  Securities  Act of 1933.
The Notes are unsecured  obligations of HomeSide Lending,  Inc. and rank equally
with all other unsecured and unsubordinated  indebtedness of HomeSide. The Notes
will mature and the principal amount,  together with interest accrued and unpaid
interest,  will be payable on August 16, 2000.  Interest on the Notes is payable
quarterly in arrears on November 16, 1999,  February 16, 2000, May 16, 2000, and
August 16, 2000.  The per annum rate of interest will equal  three-month  LIBOR,
reset quarterly,  plus 20 basis points.  HomeSide may, at its option, redeem the
Notes on any interest  payment date, in whole but not in part, at 100 percent of
the principal amount plus accrued and unpaid interest.


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

General

      HomeSide  International,  Inc. (the  "Company"),  through its wholly-owned
operating subsidiary HomeSide Lending, Inc. ("HomeSide Lending"),  is one of the
largest  full  service  residential  mortgage  banking  companies  in the United
States.  HomeSide's strategy emphasizes variable cost mortgage origination,  low
cost servicing,  and effective risk  management.  Headquartered in Jacksonville,
Florida,  HomeSide  Lending  ranks  as the 8th  largest  originator  and the 6th
largest  servicer in the United States at June 30, 1999, based on data published
by Inside Mortgage Finance.

       HomeSide  plans  to  build  its  core  operations  through  (i)  improved
economies  of  scale in  servicing  costs;  (ii)  increased  productivity  using
proprietary  technology;  and  (iii)  expanded  and  diversified  variable  cost
origination  channels.  In addition,  HomeSide intends to pursue additional loan
portfolio  acquisitions and strategic  origination  relationships similar to the
existing BankBoston, Bank One, and People's Bank relationships.

      On February 10, 1998,  National  Australia  Bank,  Ltd.  (the  "National")
acquired all outstanding  shares of the common stock of HomeSide  International,
Inc.  As  consideration,  the  National  paid  $27.825  per share for all of the
outstanding  common stock and $17.7 million cash to retire all outstanding stock
options.   The  total  purchase  price  was  approximately  $1.2  billion.   The
transaction  was  accounted  for as a  purchase.  As a result,  all  assets  and
liabilities  were  recorded at their fair value on February  11,  1998,  and the
purchase  price in excess of the fair  value of net  assets  acquired  of $713.6
million was recorded as goodwill. Following the transaction described above, the
National owns 100% of the  Company's  common stock and the Company has become an
indirect wholly-owned subsidiary of the National.

         As a result of the merger with the National,  HomeSide adopted a fiscal
year  end of  September  30 to  conform  to the  fiscal  year  of the  National.
Accordingly,  comparative financial statements for the same nine month period in
the prior year have not been presented.  Instead, a comparison of the periods of
the prior year that most closely  correspond to the present nine month period is
presented.  HomeSide's  operating  results for the present nine month period are
not directly  comparable to its  historical  operating  results due, in part, to
different  balance  sheet  valuations  (estimated  fair  value  as  compared  to
historical cost). In addition, because HomeSide's operating results are produced
on a  quarterly  basis,  it is not  practicable  to  furnish  a period  prior to
February 11, 1998 that corresponds to any period other than the periods reported
according to the predecessor's prior fiscal year periods.  Therefore,  the prior
period from February 11, 1998 to June 30, 1998 and the  predecessor  period from
September 1, 1997 to December 10, 1998 have been  presented in  accordance  with
Regulation 15d-10(e)(4).

        Operating results for the three and nine months ended June 30, 1999, the
period from February 11, 1998 to June 30, 1998, and the predecessor  period from
September 1, 1997 to February  10, 1998 are not  necessarily  indicative  of the
results that may be expected for the fiscal year ending  September 30, 1999. For
further  information,   refer  to  the  consolidated  financial  statements  and
footnotes  thereto included in the Form 10-K for the fiscal period from February
11, 1998 to September 30, 1998 of HomeSide International, Inc.

  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 contains  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.  The words "believe,"
"expect,"   "anticipate,"  "intend,"  "estimate"  and  other  expressions  which
indicate future events and trends  identify  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 a result of new
information,  future  events or  otherwise.  The  following  factors could cause
actual  results  to  differ   materially  from   historical   results  or  those
anticipated:  (1) the Company's  ability to grow which depends on its ability to
obtain additional  financing in the future for originating loans,  investment in
servicing  rights,  working capital,  capital  expenditure and general corporate
purposes,   (2)  economic   downturns  may   negatively   affect  the  Company's
profitability  as the  frequency  of loan  default  tends  to  increase  in such
environments  and (3)  changes in  interest  rates may affect the volume of loan
originations and acquisitions,  the interest rate spread on loans held for sale,
the  amount of gain or loss on the sale of loans and the value of the  Company's
servicing  portfolio.  These risks and  uncertainties are more fully detailed in
the Company's filings with the Securities and Exchange Commission.

   Loan Production Activities

      As a  multi-channel  loan  production  lender,  HomeSide  has  one  of the
industry's largest correspondent lending production  operations,  a full-service
brokered  loan  program and a national  production  center for  consumer  direct
mortgage lending.  HomeSide also purchases servicing rights in bulk from time to
time.  By  focusing  on  production  channels  with a variable  cost  structure,
HomeSide eliminates the fixed costs associated with traditional  mortgage branch
offices. Without the burden of high fixed cost origination overhead, HomeSide is
well positioned to weather a variety of interest rate environments.

      The  following   information  regarding  loan  production  activities  for
HomeSide is  presented to aid in  understanding  the results of  operations  and
financial  condition  of HomeSide  for the three and nine months  ended June 30,
1999,  the period from February 11, 1998 to June 30, 1998,  and the  predecessor
period from September 1, 1997 to February 10, 1998 (in millions):

<TABLE>
<CAPTION>
                                                                                                                 Predecessor
                         For the Three          For the Three         For the Nine       For the Period         For the Period
                          Months Ended          Months Ended          Months Ended      From February 11,      From September 1,
                         June 30, 1999          June 30, 1998        June 30, 1999      1998 to June 30,       1997 to February
                                                                                              1998                 10, 1998
                        -----------------    --------------------   -----------------  --------------------   --------------------
<S>                     <C>                  <C>                    <C>                <C>                    <C>
Correspondent                    $ 4,156                  $4,264            $ 14,750                $6,589                $ 6,280
Co-issue                           1,956                   1,139               3,871                 2,627                  2,907
Broker                               967                     709               3,217                 1,081                    609
                        -----------------    --------------------   -----------------  --------------------   --------------------
  Total wholesale                  7,079                   6,112              21,838                10,297                  9,796
Direct                               470                     255               1,153                   352                    193
                        -----------------    --------------------   -----------------  --------------------   --------------------
  Total production                 7,549                   6,367              22,991                10,649                  9,989
Bulk acquisitions                  4,665                  17,143              33,748                17,145                  1,465
                        -----------------    --------------------   -----------------  --------------------   --------------------
  Total production and
    Acquisitions                 $12,214                 $23,510             $56,739               $27,794                $11,454
                        =================    ====================   =================  ====================   ====================
</TABLE>

      Total loan production,  excluding bulk acquisitions,  was $7.5 billion for
the three  months  ended June 30, 1999  compared  to $6.4  billion for the three
months ended June 30, 1998, a 17% increase.  Loan  production  was $23.0 billion
for the nine  months  ended June 30,  1999,  compared  to $10.0  billion for the
predecessor  period from  September 1, 1997 to February 10, 1998  combined  with
$10.6  billion for the period from  February  11, 1998 to June 30,  1998.  On an
annualized basis,  loan production  increased 24% for the nine months ended June
30, 1999 from the predecessor period from September 1, 1997 to February 10, 1998
combined with the period from February 11, 1998 to June 30, 1998.  The increases
for the three and nine month periods  ended June 30, 1999 were  primarily due to
increases  in  wholesale  production.  For the nine months  ended June 30, 1999,
HomeSide's correspondent lending, broker, and co-issue channels were the primary
contributors  to production  volume.  The  correspondent  lending channel volume
decreased  3% for the three  months  ended June 30,  1999  compared to the three
months ended June 30, 1998.  Correspondent  lending  volume  increased 27% on an
annualized  basis  for the nine  months  ended  June 30,  1999  compared  to the
predecessor period from September 1, 1997 to February 10, 1998 combined with the
period from  February  11, 1998 to June 30,  1998.  A major  contributor  to the
increase was the addition of Bank One and People's Bank as Preferred Partners on
June 5, 1998 and November 23, 1998,  respectively.  As Preferred Partners,  Banc
One and  People's  Bank  will  sell a  significant  portion  of the  residential
mortgage loans they originate to HomeSide for five years. Another contributor to
correspondent  lending volume was the strategic alliance formed on June 15, 1999
between  HomeSide  Lending  and  Cendant  Mortgage,  one of the  largest  retail
mortgage loan  originators in the United States.  Cendant Mortgage has agreed to
sell up to $7 billion of  servicing  assets  annually to HomeSide  Lending for a
five-year period.

         On  May  29,  1998,   HomeSide  also   purchased   the   operations  of
NationsBank's  subsidiary Loan America, a national broker network. This purchase
is  contributing  to HomeSide's  expansion of its broker  network,  a production
channel that is key to HomeSide's variable cost origination strategy. The broker
channel  volume  increased 36% for the three months ended June 30, 1999 compared
to the three months ended June 30, 1998. The broker channel increased 112% on an
annualized  basis  for the nine  months  ended  June 30,  1999  compared  to the
predecessor period from September 1, 1997 to February 10, 1998 combined with the
period from February 11, 1998 to June 30, 1998.
      The interest rate environment has  significantly  affected the size of the
mortgage origination market. When interest rates decline,  increasing numbers of
mortgagees  refinance their loans. As a result, the mortgage  origination market
grows.  During  this  period of high  refinances,  HomeSide  has strived to keep
production at a level which is sustainable should the market size return to 1997
and 1996 volumes.  As an alternative,  HomeSide has emphasized its  acquisitions
strategy to maintain  and  increase  the  servicing  portfolio  size during this
period of relatively high portfolio runoff.

      As part of this acquisition strategy, HomeSide completed bulk acquisitions
totaling $4.7 billion and $33.7  billion  during the three and nine months ended
June 30, 1999,  respectively.  Bulk acquisitions for the three months ended June
30,  1998 were $17.1  billion,  including  the  acquisition  of Bank One's $16.6
billion mortgage portfolio. For the predecessor period from September 1, 1997 to
February 10, 1998  combined  with the period from  February 11, 1998 to June 30,
1998,  bulk  acquisitions  were $18.6  billion.  The  increase in purchases is a
continuation of HomeSide's  targeted  approach to grow the servicing  portfolio.
Included  in these  bulk  acquisitions  is the March 4, 1999  purchase  of First
Chicago NBD Mortgage Company's ("First Chicago") servicing portfolio.  This bulk
acquisition, which represents an expansion of HomeSide's strategic alliance with
Bank One, increased HomeSide's servicing portfolio by approximately $18 billion.
In addition, First Chicago has committed to sell the servicing rights associated
with its residential  mortgage  originations  to HomeSide on a flow basis.  Also
included in bulk  acquisitions  are $5 billion in mortgage loans  purchased from
People's  Bank on November  23,  1998 and  approximately  $2.2  billion and $6.9
billion in mortgage loans purchased from Cendant Mortgage for the three and nine
month periods ended June 30, 1999, respectively.  Cendant Mortgage has agreed to
sell $7 billion of its mortgage  production  to HomeSide  each year and People's
Bank, the largest mortgage lender in Connecticut, has also committed to sell its
residential mortgage originations to HomeSide for five years.

   Servicing Portfolio

      Management  believes that HomeSide is one of the most  efficient  mortgage
servicers in the industry based on its servicing cost per loan and the number of
loans  serviced per employee.  The servicing  operation  makes  extensive use of
state-of-the-art technology, process re-engineering and expense management. With
a portfolio size of $143 billion,  HomeSide  services the loans of approximately
1.7  million  homeowners  from  across the United  States  and is  committed  to
protecting the value of this important asset by a sophisticated  risk management
strategy.  HomeSide anticipates its low cost of servicing loans will continue to
maximize the bottom-line impact of its growing servicing  portfolio.  HomeSide's
focus on efficient and low cost  processes is pursued  through the selective use
of  automation,  strategic  outsourcing  of  selected  servicing  functions  and
effective control of delinquencies and foreclosures.

The following  information  on the dollar amounts of loans serviced is presented
to aid in  understanding  the results of operations  and financial  condition of
HomeSide  for the three and nine months  ended June 30,  1999,  the three months
ended June 30, 1998, the period from February 11, 1998 to June 30, 1998, and the
predecessor period from September 1, 1997 to February 10, 1998 (in millions):

<TABLE>
<CAPTION>
                                                                                                                   Predecessor
                             For the Three        For the Three        For the Nine       For the Period         For the Period
                              Months Ended        Months Ended         Months Ended      From February 11,      From September 1,
                             June 30, 1999        June 30, 1998       June 30, 1999      1998 to June 30,       1997 to February
                                                                                               1998                 10, 1998
                            -----------------  --------------------  -----------------  --------------------   --------------------
<S>                         <C>                <C>                   <C>                <C>                    <C>
Balance at beginning of
  Period                           $ 139,653              $ 99,918           $115,800              $ 99,956                $96 554
   Additions                          12,214                23,510             56,739                27,794                 11,454
   Scheduled amortization                849                   663              2,401                   983                    973
   Prepayments                         7,807                 6,378             24,956                10,211                  6,403
   Foreclosures                          395                   385                988                   514                    370
   Sales of servicing                    195                   201              1,573                   241                    306
                            -----------------  --------------------   -----------------  --------------------  --------------------
       Total reductions                9,246                 7,627             29,918                11,949                  8,052
                            -----------------  --------------------  -----------------  --------------------   --------------------
Balance at end of period            $142,621             $ 115,801          $ 142,621             $ 115,801                $99,956
                            =================  ====================  =================  ====================   ====================
</TABLE>

      The number of loans  serviced at June 30, 1999 was  1,667,124  compared to
1,424,256  at June  30,  1998.  HomeSide's  strategy  is to build  its  mortgage
servicing   portfolio  by   concentrating  on  variable  cost  loan  origination
strategies,  and as a result, benefit from improved economies of scale. A key to
HomeSide's  future growth is its  proprietary  servicing  software.  This system
allows  HomeSide  to double the number of loans  typically  serviced on a single
system. For the three and nine months ended June 30, 1999,  substantially all of
the servicing portfolio is serviced on the proprietary system.


Results of Operations

For the three months ended June 30, 1999 compared to the three months ended June
30, 1998

   Summary

      HomeSide's  net  income,   excluding   goodwill   amortization   from  the
acquisition  of HomeSide by the National,  increased 3% to $23.7 million for the
three months ended June 30, 1999  compared to $23.1 million for the three months
ended June 30,  1998.  Total  revenues  for the three months ended June 30, 1999
were $103.9  million  compared to $96.2  million for the three months ended June
30, 1998, an 8% increase. The increases in net income and revenues for the three
months ended June 30, 1999 compared to the three months ended June 30, 1998 were
primarily  attributable to increases in net mortgage origination revenue and net
interest revenue.  Net mortgage  origination  revenue increased primarily due to
increased  margins  on  loan  production  activities,  increased  mortgage  loan
production  volumes,  and gains on sales of reinstated  early pool buyout loans.
Net  interest  revenue  increased  due to  increases  in the balances of average
interest-earning assets and as a result of reduced borrowing costs from improved
credit ratings.  Net servicing  revenue  increased 2% for the three months ended
June 30, 1999 compared to the three months ended June 30, 1998, primarily due to
an  increase  in the  servicing  portfolio,  partially  offset by an increase in
amortization  expense.  The  increased  amortization  expense  resulted  from an
increase in the average  balance of mortgage  servicing  rights.  Total expenses
increased as a result of expenses associated with the growing mortgage servicing
portfolio.

    Net Servicing Revenue

      Net  servicing  revenue was $44.7  million for the three months ended June
30, 1999  compared to $43.9  million for the three months ended June 30, 1998, a
2% increase.  Net  servicing  revenue is comprised of mortgage  servicing  fees,
ancillary servicing revenue, and amortization of mortgage servicing rights.

     Mortgage  servicing  fees  increased  38% to $163.5  million  for the three
months ended June 30, 1999 compared to $118.3 million for the three months ended
June 30,  1998,  primarily  as a  result  of  portfolio  growth.  The  servicing
portfolio increased $26.8 billion to $142.6 billion at June 30, 1999 compared to
$115.8 billion at June 30, 1998, a 23% increase.  A significant  portion of this
portfolio growth was due to the purchase of First Chicago NBD Mortgage Company's
$18 billion servicing  portfolio on March 4, 1999.  HomeSide's  weighted average
interest rates of the mortgage  loans in the servicing  portfolio were 7.47% and
7.76% at June 30, 1999 and June 30, 1998,  respectively.  The  weighted  average
servicing  fee,  including  ancillary  income,  for the servicing  portfolio was
0.465% for the three months ended June 30, 1999 compared to 0.450% for the three
months ended June 30, 1998. The increase in the weighted  average  servicing fee
was due to guaranteed  servicing fees resulting from the  termination  agreement
with NationsBank on their acquisition of Barnett.

     Amortization expense was $118.8 million for the three months ended June 30,
1999  compared to $74.5  million for the three months ended June 30, 1998, a 59%
increase.  Amortization expense increased mainly as a result of a higher average
balance of mortgage  servicing  rights and lower  interest  rates.  Amortization
charges are highly dependent upon the level of prepayments during the period and
changes in prepayment  expectations,  which are significantly  influenced by the
direction and level of long-term interest rate movements. A decrease in mortgage
interest  rates  results  in  an  increase  in  prepayment   estimates  used  in
calculating periodic amortization expense. Because mortgage servicing rights are
amortized  over the  expected  period of service  fee  revenues,  an increase in
mortgage  prepayment  activity  typically results in a shorter estimated life of
the mortgage servicing assets and, accordingly, higher amortization expense.

   Net Interest Revenue

      Net  interest  revenue  is  driven  by the level of  interest  rates,  the
direction in which rates are moving and the spread  between  short and long-term
interest rates and the rates at which HomeSide is able to borrow.  These factors
influence the size of the residential  mortgage  origination market,  HomeSide's
loan production  volumes and the interest rates HomeSide earns on loans and pays
to its lenders.

      Loan refinancing levels are the largest contributor to changes in the size
of the mortgage  origination market. To reduce the cost of their home mortgages,
borrowers  tend to refinance  their loans during  periods of declining  interest
rates,  increasing  the  size of the  origination  market  and  HomeSide's  loan
production  volumes.  Higher loan  production  volumes  result in higher average
balances  of loans  held for sale and  consequently  higher  levels of  interest
income from interest earned on such loans prior to their sale. This higher level
of interest  income due to increased  volumes is  partially  offset by the lower
rates earned on the loans.

        Overall  borrowing  costs also fluctuate with changes in interest rates.
Currently, the interest expense HomeSide pays to finance mortgage loans held for
sale and other net assets is generally  calculated  with reference to short-term
interest rates. In addition,  because mortgage loans held for sale earn interest
based on longer term interest rates,  the level of net interest  revenue is also
influenced by the spread between long-term and short-term interest rates.

      Net interest revenue totaled $11.5 million for the three months ended June
30, 1999  compared to $9.2  million for the three  months ended June 30, 1998, a
25%  increase.  The  increase  in net  interest  revenue  was  primarily  due to
increases  in the average  balances of loans held for sale and escrow  deposits.
Lower funding rates obtained through improved credit ratings also contributed to
increases in net interest  income.  These increases were partially  offset by an
increase in interest expense to fund the growth of mortgage servicing assets.

Net Mortgage Origination Revenue

      Net  mortgage  origination  revenue  is  comprised  of fees  earned on the
origination of mortgage loans,  gains and losses on the sale of loans, gains and
losses resulting from hedging of secondary marketing activities and fees charged
to review loan documents for purchased loan production.

      Net mortgage  origination  revenue was $45.7  million for the three months
ended June 30, 1999  compared to $34.3  million for the three  months ended June
30, 1998, a 33% increase.  This increase was primarily due to increased  margins
on loan production  activities,  increased mortgage loan production volumes, and
gains on sales of reinstated early pool buyout loans.

   Other Income

       Other  income for the three  months  ended June 30, 1999 was $2.1 million
compared  to $8.8  million  for the three  months  ended  June 30,  1998,  a 76%
decrease. The decrease was primarily due to the prior year recognition of income
in  relation  to payments  received  for  termination  of the  Preferred  Seller
arrangement with  NationsBank that resulted from the NationsBank  acquisition of
Barnett.

   Salaries and Employee Benefits

      Salaries and  employee  benefits  expense was $32.6  million for the three
months ended June 30, 1999  compared to $29.4 million for the three months ended
June 30, 1998,  an 11%  increase.  The average  number of  full-time  equivalent
employees  was 2,706 for the three months ended June 30, 1999  compared to 2,139
for the three months ended June 30, 1998. The increases in salaries and employee
benefits  expense and  average  number of  full-time  equivalent  employees  are
primarily  attributable  to  additional  expenses  and  employees to service the
growing  mortgage  servicing   portfolio,   increased  production  volumes,  and
increased prepayment activity.

   Occupancy and Equipment Expense

      Occupancy and equipment expense primarily includes rental expense, repairs
and maintenance  costs,  certain computer  software expenses and depreciation of
HomeSide's premises and equipment. Occupancy and equipment expense for the three
months  ended June 30, 1999 was $6.9  million  compared to $5.0  million for the
three months ended June 30,  1998, a 38%  increase.  The increase in expense was
mainly due to the increased  expenses incurred to enhance processing systems and
technology expenditures necessary to support targeted business growth.

Servicing Losses on Investor-Owned Loans and Foreclosure-Related Expenses

      Servicing  losses on  investor-owned  loans represent  anticipated  losses
primarily  attributable  to  servicing  FHA and VA loans  for  investors.  These
amounts   include   actual   losses   for  the  final   disposition   of  loans,
non-recoverable  foreclosure costs,  accrued interest for which payment has been
curtailed and estimates for potential losses based on HomeSide's experience as a
servicer of government loans.

      The  servicing  losses on  investor-owned  loans  and  foreclosure-related
expenses totaled $10.8 million for the three months ended June 30, 1999 compared
to $8.4  million for the three  months  ended June 30,  1998.  The  increase was
primarily due to the growth of the portfolio.

      Included  in the balance of accounts  payable and accrued  liabilities  at
June 30,  1999 is a reserve for  estimated  servicing  losses on  investor-owned
loans of $21.7 million.  The reserve has been  established for potential  losses
related to the  mortgage  servicing  portfolio.  Increases  to the  reserve  are
charged to earnings as servicing losses on investor-owned  loans. The reserve is
decreased  for  actual  losses  incurred  related  to  the  mortgage   servicing
portfolio.  HomeSide's historical loss experience on VA loans generally has been
consistent with industry  experience.  Management  believes that HomeSide has an
adequate  level of reserve  based on servicing  volume,  portfolio  composition,
credit quality and historical  loss rates,  as well as estimated  future losses.
Servicing losses are generally  greatest during the three to six year age of the
loan.
        The following  table sets forth  HomeSide's  delinquency and foreclosure
experience:

<TABLE>
<CAPTION>

                        Servicing Portfolio Delinquencies
                             (percent by loan count)

                                                                                    June 30, 1999          June 30, 1998
                                                                                 --------------------    -------------------
<S>                                                                              <C>                     <C>
Servicing Portfolio Delinquencies, excluding bankruptcies (at end of period)
          30 days                                                                       3.20%                  3.38%
          60 days                                                                       0.59%                  0.69%
          90+ days                                                                      0.47%                  0.58%
                                                                                 --------------------    -------------------
               Total past due                                                           4.26%                  4.65%
                                                                                 ====================    ===================

          Foreclosures pending                                                          0.66%                   0.75
                                                                                 ====================    ===================

</TABLE>

      As a  result  of a larger  and  more  mature  portfolio  at June 30,  1999
compared  to June  30,  1998,  servicing  losses  on  investor-owned  loans  and
foreclosure-related  expenses increased while servicing portfolio  delinquencies
decreased.

   Other Expenses and Goodwill Amortization

      Other  expenses  consist  mainly  of  professional  fees,   communications
expense,  advertising and public relations, data processing expenses and certain
loan origination expenses.  The level of other expenses fluctuates in part based
upon the level of HomeSide's  mortgage  servicing  portfolio and loan production
volumes.

      Other  expenses  were $15.5  million for the three  months  ended June 30,
1999,  approximately equal to other expenses for the three months ended June 30,
1998. Goodwill amortization was $9.0 million and $8.9 million, respectively, for
the three months ended June 30, 1999 and the three months ended June 30, 1998.


   Income Tax Expense

      HomeSide's income tax expense was $14.4 million for the three months ended
June 30, 1999  compared to $14.8  million  for the three  months  ended June 30,
1998. The effective  income tax rates for the three month periods ended June 30,
1999 and June 30, 1998 were 49% and 51%, respectively.


Results of Operations

For the nine months ended June 30, 1999 compared to the period from February 11,
1998 to June 30,  1998 and the  predecessor  period  from  September  1, 1997 to
February 10, 1998 combined

   Summary

      HomeSide's  net  income,   excluding   goodwill   amortization   from  the
acquisition  of HomeSide by the National,  was $70.8 million for the nine months
ended June 30, 1999, an 11%  annualized  increase  compared to $33.9 million for
the period from  February 11, 1998 to June 30, 1998  combined with $36.8 million
for the  predecessor  period from  September 1, 1997 to February  10, 1998.  Net
income after the goodwill  amortization  from the acquisition of HomeSide by the
National  for the nine  months  ended  June 30,  1999 was $43.9  million.  Total
revenues for the nine months ended June 30, 1999 were $313.6 million compared to
$140.8 million for the period from February 11, 1998 to June 30, 1998 and $134.7
million for the predecessor  period from September 1, 1997 to February 10, 1998,
a 26%  annualized  increase.  The  increases in net income,  excluding  goodwill
amortization,  and revenues for the nine months ended June 30, 1999  compared to
the period from February 11, 1998 to June 30, 1998 combined with the predecessor
period from September 1, 1997 to February 10, 1998 were  primarily  attributable
to increases in net mortgage  origination revenue and net interest revenue.  Net
mortgage  origination  revenue increased on an annualized basis primarily due to
increased  production  volumes and margins on loan  production  activities.  Net
interest  revenue  increased  on an  annualized  basis due to  increases  in the
balances of average interest-earning assets and as a result of reduced borrowing
costs from improved credit ratings. Net servicing revenue increased less than 1%
on an annualized  basis  primarily due to an increase in  amortization  expense,
offset by an increase  in the  servicing  portfolio.  Declining  interest  rates
during most of the period increased mortgage prepayments speeds and consequently
increased amortization expense.  Amortization expense also increased as a result
of a higher  average  balance  in  mortgage  servicing  rights.  Total  expenses
increased on an annualized basis as a result of increases in production  volume,
expenses  associated with the growing mortgage servicing portfolio and high loan
prepayment activity.

    Net Servicing Revenue

      Net  servicing  revenue was $142.8  million for the nine months ended June
30, 1999 compared to $70.8 million for the period from February 11, 1998 to June
30, 1998 and $87.2 million for the predecessor  period from September 1, 1997 to
February 10, 1998,  aproximately  equal on an  annualized  basis.  Net servicing
revenue is comprised of mortgage  servicing fees,  ancillary  servicing revenue,
and amortization of mortgage servicing rights.

     Mortgage  servicing  fees  increased 30% on an  annualized  basis to $442.1
million for the nine months ended June 30, 1999  compared to $182.6  million for
the period from February 11, 1998 to June 30, 1998 combined with $194.7  million
for the  predecessor  period  from  September  1,  1997 to  February  10,  1998,
primarily as a result of portfolio  growth.  The servicing  portfolio  increased
$26.8 billion to $142.6  billion at June 30, 1999 compared to $115.8  billion at
June 30, 1998, a 23% increase.  A significant  portion of this portfolio  growth
was due to the  purchase of First  Chicago NBD  Mortgage  Company's  $18 billion
servicing portfolio on March 4, 1999.  HomeSide's weighted average interest rate
of the mortgage loans in the servicing portfolio was 7.47% and 7.76% at June 30,
1999 and June 30,  1998,  respectively.  The  weighted  average  servicing  fee,
including  ancillary income, for the servicing portfolio was 0.467% for the nine
months ended June 30, 1999  compared to 0.456% for the period from  February 11,
1998 to June 30, 1998 and 0.451% for the  predecessor  period from  September 1,
1997 to February 10, 1998.  The increase in the weighted  average  servicing fee
was due to guaranteed  servicing fees as a result of the  termination  agreement
with  NationsBank  on their  acquisition  of Barnett  and a growth of  ancillary
revenues, including late fees and other mortgage related products.

      Amortization expense was $299.2 million for the nine months ended June 30,
1999  compared to $111.8  million for the period from  February 11, 1998 to June
30, 1998 combined with $107.5 million for the predecessor  period from September
1, 1997 to February 10, 1998, a 52% annualized  increase.  Amortization  expense
increased  mainly as a result of a higher average balance of mortgage  servicing
rights  and  declining  mortgage  interest  rates  during  most  of the  period.
Amortization  charges are highly dependent upon the level of prepayments  during
the  period and  changes in  prepayment  expectations,  which are  significantly
influenced by the direction and level of long-term  interest rate  movements.  A
decrease  in  mortgage  interest  rates  results in an  increase  in  prepayment
estimates used in calculating periodic  amortization  expense.  Because mortgage
servicing rights are amortized over the expected period of service fee revenues,
an increase  in  mortgage  prepayment  activity  typically  results in a shorter
estimated  life  of the  mortgage  servicing  assets  and,  accordingly,  higher
amortization expense.

   Net Interest Revenue

      Net  interest  revenue  is  driven  by the level of  interest  rates,  the
direction in which rates are moving and the spread  between  short and long-term
interest rates and the rates at which HomeSide is able to borrow.  These factors
influence the size of the residential  mortgage  origination market,  HomeSide's
loan production  volumes and the interest rates HomeSide earns on loans and pays
to its lenders.

      Loan refinancing levels are the largest contributor to changes in the size
of the mortgage  origination market. To reduce the cost of their home mortgages,
borrowers  tend to refinance  their loans during  periods of declining  interest
rates,  increasing  the  size of the  origination  market  and  HomeSide's  loan
production  volumes.  Higher loan  production  volumes  result in higher average
balances  of loans  held for sale and  consequently  higher  levels of  interest
income from interest earned on such loans prior to their sale. This higher level
of interest  income due to increased  volumes is  partially  offset by the lower
rates earned on the loans.

      Overall  borrowing  costs also fluctuate  with changes in interest  rates.
Currently, the interest expense HomeSide pays to finance mortgage loans held for
sale and other net assets is generally  calculated  with reference to short-term
interest rates. In addition,  because mortgage loans held for sale earn interest
based on longer term interest rates,  the level of net interest  revenue is also
influenced by the spread between long-term and short-term interest rates.

      Net interest  revenue totaled $40.5 million for the nine months ended June
30, 1999 compared to $12.0 million for the period from February 11, 1998 to June
30, 1998 combined with $0.1 million for the predecessor period from September 1,
1997 to February 10, 1998.  Increases in net interest  revenue on an  annualized
basis were  primarily due to increases in net interest  earned on mortgage loans
held for sale,  escrow deposits,  and early pool buyout advances.  Lower funding
rates  obtained  through  improved  credit  ratings and the issue of medium-term
notes and commercial paper also contributed to increases in net interest income.
These increases were partially offset by an increase in interest expense to fund
the growth of mortgage servicing assets.
    Net Mortgage Origination Revenue

      Net  mortgage  origination  revenue  is  comprised  of fees  earned on the
origination of mortgage loans,  gains and losses on the sale of loans, gains and
losses resulting from hedging of secondary marketing activities and fees charged
to review loan documents for purchased loan production.

      Net mortgage  origination  revenue was $125.6  million for the nine months
ended June 30, 1999  compared to $48.6  million for the period from February 11,
1998 to June 30, 1998  combined with $46.7  million for the  predecessor  period
from  September 1, 1997 to February 10, 1998, a 46%  annualized  increase.  This
increase  was due to  increases  in  production  volumes  and  margins  due to a
declining interest rate environment during most of the period.

   Other Income

       Other  income for the nine months  ended June 30,  1999 was $4.6  million
compared to $9.4 million for the period from  February 11, 1998 to June 30, 1998
combined with $0.6 million for the predecessor  period from September 1, 1997 to
February  10, 1998,  a 49%  annualized  decrease.  The  annualized  decrease was
primarily due to volume decreases in real estate tax service fees.

   Salaries and Employee Benefits

      Salaries and  employee  benefits  expense was $101.0  million for the nine
months  ended June 30,  1999  compared  to $44.0  million  for the  period  from
February  11,  1998 to  June  30,  1998  combined  with  $36.1  million  for the
predecessor period from September 1, 1997 to February 10, 1998, a 40% annualized
increase. The average number of full-time equivalent employees was 2,616 for the
nine months ended June 30, 1999  compared to 2,070 for the period from  February
11, 1998 to June 30, 1998 and 1,848 for the predecessor period from September 1,
1997 to February 10,  1998.  The  increases  in salaries  and employee  benefits
expense and average  number of  full-time  equivalent  employees  are  primarily
attributable  to  additional  expenses  and  employees  to service  the  growing
mortgage  servicing  portfolio,  increased  prepayment  activity  and  increased
production volume.

   Occupancy and Equipment Expense

      Occupancy and equipment expense primarily includes rental expense, repairs
and maintenance  costs,  certain computer  software expenses and depreciation of
HomeSide's premises and equipment.  Occupancy and equipment expense for the nine
months  ended June 30, 1999 was $20.0  million  compared to $7.4 million for the
period from  February 11, 1998 to June 30, 1998  combined  with $7.8 million for
the  predecessor  period from  September  1, 1997 to February  10,  1998,  a 46%
annualized  increase.  The  increase in expense was mainly due to the  increased
expenses  incurred to enhance  processing  systems and  technology  expenditures
necessary to support targeted business growth.

    Servicing Losses on Investor-Owned Loans and Foreclosure-Related Expenses

      Servicing  losses on  investor-owned  loans represent  anticipated  losses
primarily  attributable  to  servicing  FHA and VA loans  for  investors.  These
amounts   include   actual   losses   for  the  final   disposition   of  loans,
non-recoverable  foreclosure costs,  accrued interest for which payment has been
curtailed and estimates for potential losses based on HomeSide's experience as a
servicer of government loans.

      The  servicing  losses on  investor-owned  loans  and  foreclosure-related
expenses  totaled $29.5 million for the nine months ended June 30, 1999 compared
to $10.2 million for the period from February 11, 1998 to June 30, 1998 combined
with $11.5 million for the predecessor period from September 1, 1997 to February
10,  1998.  The increase was due to the growth of the  portfolio  and  increased
foreclosure losses.

      Included  in the balance of accounts  payable and accrued  liabilities  at
June 30,  1999 is a reserve for  estimated  servicing  losses on  investor-owned
loans of $21.7 million.  The reserve has been  established for potential  losses
related to the  mortgage  servicing  portfolio.  Increases  to the  reserve  are
charged to earnings as servicing losses on investor-owned  loans. The reserve is
decreased  for  actual  losses  incurred  related  to  the  mortgage   servicing
portfolio.  HomeSide's historical loss experience on VA loans generally has been
consistent with industry  experience.  Management  believes that HomeSide has an
adequate  level of reserve  based on servicing  volume,  portfolio  composition,
credit quality and historical  loss rates,  as well as estimated  future losses.
Servicing losses are generally  greatest during the three to six year age of the
loan.



        The following  table sets forth  HomeSide's  delinquency and foreclosure
experience:
<TABLE>
<CAPTION>

                        Servicing Portfolio Delinquencies
                             (percent by loan count)

                                                                                       June 30, 1999       June 30, 1998
                                                                                 --------------------    -------------------
<S>                                                                              <C>                     <C>
Servicing Portfolio Delinquencies, excluding bankruptcies (at end of period)
          30 days                                                                       3.20%                  3.38%
          60 days                                                                       0.59%                  0.69%
          90+ days                                                                      0.47%                  0.58%
                                                                                 --------------------    -------------------
               Total past due                                                           4.26%                  4.65%
                                                                                 ====================    ===================

          Foreclosures pending                                                          0.66%                  0.75%
                                                                                 ====================    ===================

</TABLE>

      As a  result  of a larger  and  more  mature  portfolio  at June 30,  1999
compared  to June  30,  1998,  servicing  losses  on  investor-owned  loans  and
foreclosure-related  expenses increased while servicing portfolio  delinquencies
decreased.

   Other Expenses and Goodwill Amortization

      Other  expenses  consist  mainly  of  professional  fees,   communications
expense,  advertising and public relations, data processing expenses and certain
loan origination expenses.  The level of other expenses fluctuates in part based
upon the level of HomeSide's  mortgage  servicing  portfolio and loan production
volumes.

      Other expenses,  excluding  goodwill  amortization from the acquisition of
HomeSide  by National  Australia  Bank,  were $47.9  million for the nine months
ended June 30, 1999  compared to $23.7  million for the period from February 11,
1998 to June 30, 1998  combined with $19.1  million for the  predecessor  period
from  September 1, 1997 to February 10, 1998, a 24%  annualized  increase.  This
annualized increase was primarily due to increased production volumes.  Goodwill
amortization  totaled  $26.8  million for the nine months  ended June 30,  1999,
$13.9  million for the period from  February  11, 1998 to June 30, 1998 and $0.3
million for the predecessor  period from September 1, 1997 to February 10, 1998.
The increase was due to the purchase of HomeSide by National  Australia  Bank on
February 10, 1998.

   Income Tax Expense

      HomeSide's  income tax expense was $44.4 million for the nine months ended
June 30, 1999 compared to $21.6 million for the period from February 11, 1998 to
June 30, 1998 and $23.3  million for the  predecessor  period from  September 1,
1997 to February 10, 1998.  The  effective  income tax rates for the nine months
ended June 30, 1999 and the period from  February 11, 1998 to June 30, 1998 were
50% and 52%,  respectively.  The effective  income tax rate for the  predecessor
period from  September 1, 1997 to February  10, 1998 was 39%. The increase  from
the predecessor period was due to the tax effects of goodwill as a result of the
merger with the National.

Risk Management Activities

     HomeSide  has a risk  management  program  designed to protect the economic
value  of its  mortgage  servicing  portfolio  from  declines  in  value  due to
increases in estimated loan prepayment speeds, which are primarily influenced by
declines in interest rates. When loans prepay faster than anticipated,  the cash
flow HomeSide expects to receive from servicing such loans is reduced. The value
of mortgage  servicing rights is based on the present value of the cash flows to
be received over the life of the loan and therefore,  the value of the servicing
portfolio declines as prepayments increase.

     During the nine months ended June 30, 1999,  HomeSide  utilized  options on
U.S.  Treasury  bond and note  futures,  U.S.  Treasury  bond and note  futures,
Eurodollar  futures,  and interest rate swaps,  caps, and swaptions to protect a
significant portion of the market value of its mortgage servicing portfolio from
a  decline  in  value.  The risk  management  contracts  used by  HomeSide  have
characteristics  such that  they tend to  increase  in value as  interest  rates
decline. Conversely, these risk management contracts tend to decline in value as
interest  rates  rise.  Accordingly,  changes in value of these risk  management
instruments  will tend to move  inversely  with  changes in value of  HomeSide's
mortgage servicing rights.

     These risk management  instruments are designated as hedges on the purchase
date and such  designation  is at a level at least as  specific  as the level at
which  mortgage  servicing  rights  are  evaluated  for  impairment.   The  risk
management  instruments  are  marked-to-market  with  changes  in  market  value
deferred  and  applied as an  adjustment  to the basis of the  related  mortgage
servicing  right asset being  hedged.  As a result,  any changes in market value
that are deferred are amortized and evaluated for  impairment in the same manner
as the related  mortgage  servicing  rights.  The  effectiveness  of  HomeSide's
hedging activity can be measured by the correlation between changes in the value
of the risk  management  instruments  and  changes  in the  value of  HomeSide's
mortgage servicing rights.  This correlation is assessed on a quarterly basis to
ensure that high correlation is maintained over the term of the hedging program.
If  management's   ongoing   assessment  of  correlation   indicates  that  high
correlation is not being achieved,  the Company will discontinue the application
of hedge accounting and recognize a gain or loss to the extent the hedge results
have not been  offset by changes in value of the hedged  asset  during the hedge
period. During the periods presented, HomeSide has experienced a high measure of
correlation  between changes in the value of mortgage  servicing  rights and the
risk management contracts.

     As of June 30, 1999, deferred losses on risk management  contracts resulted
in net  deferred  hedge  losses of $413.5  million  which  are  included  in the
carrying  value of mortgage  servicing  rights.  Activity in the deferred  hedge
account during the nine months ended June 30, 1999 is as follows (in thousands):

Net deferred hedge balance at September 30, 1998           $  389,572
Net deferred hedge loss                                      (800,410)
Amortization                                                 (  2,643)
                                                       ====================
Net deferred hedge balance at June 30, 1999                  (413,481)
                                                       ====================

    HomeSide's  future cash needs as they relate to its hedging  program will be
influenced by such factors as long-term  interest rates,  loan production levels
and  growth in the  mortgage  servicing  portfolio.  The fair value of open risk
management  contracts  at June 30,  1999 was  $(199.3)  million.  This amount is
comprised  of  interest  rate  swaps,  caps and  swaptions  with a fair value of
$(233.1)  million,  partially  offset  by  options  on U.S.  Treasury  bonds and
Eurodollars  with a fair market value of $33.8  million.  The  premiums  paid on
options  along  with  amounts  due to or  from  counterparties  related  to risk
management  contracts are included in Other Assets and Other  Liabilities in the
accompanying  consolidated  balance sheet. See "Liquidity and Capital Resources"
for further  discussion  of HomeSide's  sources and uses of cash.  See Note 3 of
Notes to  Consolidated  Financial  Statements  for a  description  of HomeSide's
accounting policy for its risk management contracts and Notes 13 and 14 of Notes
to Consolidated  Financial Statements for additional fair value disclosures with
respect to HomeSide's risk management contracts included in HomeSide's Form 10-K
for the period from February 11, 1998 to September 30, 1998.

Liquidity and Capital Resources

      The  Company's  principal  financing  needs  are  the  financing  of  loan
origination  activities and the investment in mortgage servicing rights. To meet
these needs,  the Company  currently  utilizes funding from its commercial paper
program, a credit facility with the National,  medium-term notes, an independent
syndicate  of banks,  repurchase  agreements,  and cash  flow  from  operations.
HomeSide  continues to  investigate  and pursue  alternative  and  supplementary
methods to finance its growing operations through the public and private capital
markets.  These may include methods  designed to expand the Company's  financial
capacity and reduce its cost of capital. In addition, to facilitate the sale and
distribution of certain mortgage products, HomeSide Mortgage Securities, Inc., a
wholly-owned  subsidiary  of  HomeSide  Lending,  Inc.,  may  continue  to issue
mortgage-backed securities.

Operations

     Net cash  provided by  operations  for the three and nine months ended June
30,  1999 were $412.7  million  and  $1,030.6  million,  respectively.  Net cash
provided by  operations  for the three months ended June 30, 1998 and the period
from February 11, 1998 to June 30, 1998 were $379.5 million and $144.8  million,
respectively.  Net cash  used in  operations  for the  predecessor  period  from
September 1, 1997 to February 10, 1998 was $157.7  million.  Cash  provided from
servicing fee income,  loan sales and principal  repayments was partially offset
by cash used for the  origination  and purchase of mortgage  loans held for sale
and to pay corporate  expenses.  Cash flows from loan originations are dependent
upon current  economic  conditions  and the level of long-term  interest  rates.
Decreases  in  long-term   interest  rates  generally   result  in  higher  loan
refinancing  activity,  which  results in higher cash demands to meet  increased
loan  production  levels.  Higher cash demands to meet increased loan production
levels are primarily met through borrowings and loan sales.

Investing

     Net cash used in investing  activities  for the three and nine months ended
June 30, 1999 were $297.2 million and $1,150.5 million,  respectively.  Net cash
used in  investing  activities  for the three months ended June 30, 1998 and the
period from  February  11, 1998 to June 30, 1998 were $289.8  million and $516.7
million, respectively. Net cash used in investing activities for the predecessor
period from September 1, 1997 to February 10, 1998 was $60.8 million.  Cash used
in investing  activities  was primarily  for the purchase of mortgage  servicing
rights and risk  management  contracts.  Cash was provided by proceeds from risk
management  contracts  and  early  pool  buyout  reimbursements.   Other  assets
decreased $28.6 million to $89.0 million at June 30, 1999 from $117.6 million at
September  30,  1998  primarily  as a result  of a  decreases  in hedge  assets.
Accounts  payable and accrued  liabilities  increased  $359.4  million to $600.7
million at June 30, 1999 from $241.3 million at September 30, 1998, primarily as
a result of an increase in hedge liabilities. Early pool buyout advances totaled
$354.8 million at June 30, 1999 compared to $759.6 million at September 30, 1998
as a result of re-instatements  and sales of advances to HomeSide Funding,  Inc.
Future uses of cash for investing  activities  will be dependent on the mortgage
origination  market  and  HomeSide's  hedging  needs.  HomeSide  is not  able to
estimate  the timing and  amount of cash uses for future  acquisitions  of other
mortgage banking entities, if such acquisitions were to occur.

Financing

    Net cash  provided  by  financing  activities  for the three and nine months
ended June 30, 1999 were $27.2  million and $283.6  million,  respectively.  Net
cash used in financing  activities  for the three months ended June 30, 1998 was
$86.4  million.  Net cash provided by financing  activities  for the period from
February  11, 1998 to June 30,  1998 was $357.2  million.  Net cash  provided by
financing  activities  for the  predecessor  period  from  September  1, 1997 to
February  10, 1998 was $250.6  million.  Cash was  provided  by the  issuance of
commercial  paper and  medium-term  notes,  borrowings  from the  National,  and
borrowings  on HomeSide's  line of credit  during the periods.  Cash was used to
repay borrowings from the National,  commercial paper, borrowings on the line of
credit and to pay dividends to the Parent.

      HomeSide  expects that to the extent cash  generated  from  operations  is
inadequate to meet its liquidity needs, those needs can be met through financing
from its bank credit  facility  and other  facilities  which may be entered into
from time to time, as well as from the issuance of debt securities in the public
markets.  Accordingly,  HomeSide does not currently anticipate that it will make
sales  of  servicing  rights  to any  significant  degree  for  the  purpose  of
generating cash.  Nevertheless,  in addition to its cash and mortgage loans held
for sale balances,  HomeSide's portfolio of mortgage servicing rights provides a
potential source of funds to meet liquidity requirements,  especially in periods
of  rising  interest  rates  when  loan  origination  volume  slows.  Repurchase
agreements  also provide an alternative to the bank line of credit for mortgages
held for sale.  Future cash needs are highly dependent on future loan production
and servicing  results,  which are  influenced by changes in long-term  interest
rates.

Year 2000

General.  In common with many business users of computers  around the world, the
Company  has  investigated  to what extent the date change from 1999 to 2000 may
affect its business.  The Company has established a program designed to minimize
the impact of the change to 2000 on the Company and its customers.  The Board of
Directors  has made the work  associated  with the change to 2000 a key priority
for management.

The Company uses and is dependent upon a significant number of computer software
programs  and  operating  systems to conduct its  business.  Such  programs  and
systems  include  those  developed and  maintained by the Company,  software and
systems  purchased  from  outside  vendors and  software and systems used by the
Company's third party providers. The Company recognizes that the Year 2000 issue
is one of  the  most  complex  data  processing  problems  faced  by  businesses
worldwide.  As the Company  approaches the century change, its primary objective
is to maintain "business as usual."

The  Company  began  its   information   technology  Year  2000  assessment  and
remediation  efforts  in the third  quarter  of  calendar  year  1996  under the
sponsorship  of its  executive  management.  A formal,  enterprise-wide  program
commenced  in January  1998.  The Year 2000 issue has been  identified  as a top
priority. The Company's executive management and Board of Directors are provided
with frequent detailed updates.  The Company has dedicated  resources to assess,
repair and test programs,  applications,  equipment and facilities.  The Company
has established a Year 2000 Program Office that is coordinating the preparations
for the change to 2000 with each business unit throughout the Company.

The Company's  program  involves an extensive  review of its own  operations and
scoping the work that needs to be completed to minimize  any  potential  impact.
This includes  reviewing the possible  effects on the Company arising out of how
third parties manage their transition to 2000. The work  demonstrates that there
are two possible key impacts:

         Internal  - the  change to 2000 could  cause  interruptions,  errors in
         calculations or delays to the Company's critical business processes via
         unexpected system or application malfunctioning.

         External  - the  impact on the  Company's  own  operations  from  third
         parties,  including  customers,  vendors,  suppliers,   regulators  and
         electronic distribution channels which may be impacted by the change to
         2000.  This  includes any  secondary or systemic  impact that may arise
         from the change to 2000 and the risk of  disruption  in the capital and
         secondary mortgage markets on which the Company is dependent.

The Company's  strategy for  addressing  Year 2000 focuses on four teams,  which
together  address  all  aspects  of  the  Company's  business.  The  Information
Technology  team  addresses  all  of  the  Mainframe,   LAN  and  client  server
applications.  The End User  Computing (or Business) team addresses the business
risks within each of the operating departments, including facilities' risk. This
area of the strategy involves the greatest  concentration of embedded chips. The
Enterprise  team  addresses  the  corporate-wide  risks  posed by the Year 2000,
including business  continuity planning to be implemented by individual business
units. Finally, the Year 2000 Program Office coordinates the Company's Year 2000
readiness  efforts and is responsible  for  communications,  vendor  management,
project documentation and reporting.  The Company's Year 2000 Program Office and
overall  Year 2000  Program are managed by a Year 2000  Program  Director  whose
full-time resources and  responsibilities are dedicated to this effort under the
sponsorship  of  the  President  and  Chief  Operating  Officer  and  the  Chief
Information Officer.

Throughout  all phases of the Year 2000  Program the goal of the Year 2000 teams
is to complete  all required  work while  minimizing  disruption  to the current
service  delivery  levels of the Company.  Central  management of the project is
executed  using  fully  dedicated  staff  with  high  levels of  subject  matter
knowledge.  In order to speed the  assessment  and  remediation  aspects  of the
mainframe and client server IT projects,  a factory philosophy was adopted using
Paragon Computer Professionals, Inc. as the primary outsourcer. Contractors were
used internally where subject matter expertise was not required.

State of Readiness.  The Company's  approach to preparing for the change to 2000
includes a standard set of methods and tools,  customized  as applicable to each
team, to coordinate and drive the project to completion.  The approach  consists
of six phases:

1.   Assessment  - Defining  each system and process to  determine  if there are
     date  dependencies  and  how  to  resolve  them.  For  business  continuity
     purposes, assessment includes identifying event and dependency risk.

2.   Remediation - Implementing  the steps  identified in the assessment  phase,
     including code remediation and development of contingency plans.

3.   Testing - Developing and implementing test plans to determine if remediated
     code is correct and assurance testing of business continuity plans.

4.   Implementation  - Moving all approved  changes from testing into production
     and execution of contingency plans as may be required.

5.   Check-Off - Formally  acknowledging  that each process has been implemented
     and is functioning correctly.

6.   Clean  Management  -  Employing  procedures  and  practices  to prevent the
     reintroduction of non-compliant  applications,  products and processes into
     the operating environment, once Check-Off has been completed.


The  Company's  Information  Technology  and Business  Teams'  assessment of the
Company's systems and business  processes for Year 2000  vulnerability  included
substantially all hardware and software systems, embedded systems, buildings and
equipment,  and business processes. The assessment also included a review of the
Company's  dependencies  on third  parties,  including  vendors,  suppliers  and
customers.

The Company  established in its Year 2000 Program  certain key milestones and an
internal  timetable  for  the  change  to 2000 in  line  with  or  ahead  of its
regulator's suggested completion dates for core systems. These were:

o    Assessment  of  substantially  all systems and processes by July 31, 1998 -
     Completed;

o    Remediation and internal  testing of all mission  critical  applications by
     December 31, 1998 - Completed;

o    End-to-end  testing of all mission  critical  systems with  material  third
     parties by March 31, 1999 - Substantially completed by July 31, 1999;

o    Remediation  and testing of all  non-mission  critical  systems by June 30,
     1999 - Substantially completed; and

o    clean  management of all systems through 1999 - implemented  throughout the
     Company.


End-to-End  testing with material  external parties is ongoing.  As of March 31,
1999, HomeSide  successfully  completed the mandatory components of the MBA Year
2000 Readiness Test,  including Fannie Mae, Freddie Mac and Ginnie Mae. Optional
components of the MBA Year 2000 Readiness Test were  substantially  completed by
June 30, 1999.  As of June 30, 1999,  End-to-End  testing  with  material  third
parties was 91%  complete.  As of July 31, 1999,  the most recent date for which
information is available prior to this filing,  End-to-End testing with material
third parties was 97% complete.

The Company had initially  established  an internal  milestone of March 31, 1999
for  completion  of  End-to-End  testing  with  material  external  parties.  In
addition,  the Company's regulator  established June 30, 1999 as its target date
for  completion of external  testing with material  third  parties.  The Company
worked  extensively  with  material  external  parties,  including  key vendors,
suppliers and  counter-parties,  throughout  the fourth  quarter of 1998 and the
first quarter of 1999 to produce test plans and prepare for End-to-End  testing.
Although  substantially  all test plans were  produced and delivered to material
external parties by March 31, 1999,  delays in responses from them prevented the
Company  from  achieving  its March 31, 1999  milestone.  Many of the  Company's
material external parties are vendors and suppliers. The Company recognized that
many of our key vendors have  regulatory  requirements  and material third party
dependencies of their own, and that those  requirements  and dependencies had to
be  prioritized  above  testing  with  the  Company.   The  Company  values  its
relationships with its key vendors and has worked with them to accommodate their
competing  priorities even those that  necessitated  extending the Company's own
date for this milestone. Although the Company failed to meet its original target
of completing  End-to-End testing with material third parties by March 31, 1999,
the  Company  had  substantially  completed  such  testing by the June 30,  1999
regulatory  deadline.  The incomplete  End-to-End  testing items are not mission
critical.

The Company's two most critical  business  applications are its primary mortgage
servicing  software  systems:   MSP  (licensed  from  and  supported  by  Alltel
Information Services, Inc.) and ALSS (a proprietary software system supported by
the Company). As to these two systems, as of June 30, 1999, external testing was
96% complete. As to these two systems, as of July 31, 1999, the most recent date
for which  information is available prior to this filing,  external  testing was
100% complete.  As of June 30, 1999, external testing was 82% complete as to all
other systems and  applications.  As of July 31, 1999,  the most recent date for
which  information is available prior to this filing,  external  testing was 91%
complete as to all other systems and applications.

The  Company's  Year 2000  Program  also  addresses  end-user  computing  issues
presented by the Year 2000 change. As to end-user  computing issues (systems and
business processes other than information  technology  systems),  as of December
31, 1998, assessment was 100% complete, and as of June 30, 1999, remediation was
100% complete,  testing and implementation  were each 95% complete and check-off
was  90%  complete.  As of July  31,  1999,  the  most  recent  date  for  which
information  is available  prior to this  filing,  testing,  implementation  and
check-off  were each 97% complete.  The Company had originally set a target date
of June 30, 1999 for completion of testing, implementation and check-off for its
end-user computing issues. However, testing and implementation of certain ad hoc
decision support  applications was adversely  impacted by a change in processing
environment. The incomplete end user computing items are not mission critical.

For the remainder of 1999,  the emphasis of the Company's Year 2000 Program will
be  continued  assurance  testing,   finalization  and  refinement  of  business
continuity  plans  and  transition  plans,   clean  management  of  systems  and
processes,  and  monitoring  of Year 2000  readiness  efforts  by the  Company's
customers,   vendors  and  other  third   parties  with  whom  the  Company  has
relationships.  Clean management of systems involves developing and implementing
procedures  and  practices  to  prevent  the   reintroduction  of  non-compliant
applications,  products  and  processes  into  the  operating  environment  once
Check-Off has been completed.  The Company has developed and implemented a Clean
Management Strategy on a Company-wide basis.

The Company has  relationships  with vendors,  customers and other third parties
that rely on software  and systems that may not be ready for the change to 2000.
However, it is not possible in all cases to obtain complete, accurate and timely
information  regarding the Year 2000  programs of third  parties.  Further,  the
Company's  ability to direct such third parties efforts or change relations with
such  third  parties  is often  limited.  There can be no  assurance  that third
parties on which the Company  relies will  complete  their Year 2000 programs on
time or that Year 2000  failures by such third  parties will not have a material
adverse effect on the Company's results of operations.

The  Company  is  conducting  ongoing  reviews  of the Year 2000  efforts of its
mission  critical  vendors,  customers  and service  providers.  The Company has
identified a number of mission  critical  third  parties whose Year 2000 failure
may  reasonably be expected to have a material  adverse  impact on the Company's
results of  operations.  Examples of such third parties  include:  the Company's
primary software licensor, Alltel Information Services, Inc.; the Company's sole
provider of insurance  processing  services;  the Company's sole provider of tax
payment  services;  and the  Company's  sole provider of  foreclosure  services.
Catastrophic  failure by any of these  parties  would  have a  material  adverse
effect on the Company.  The Company is targeting  these mission  critical  third
parties for particular  scrutiny  regarding their preparations for the change to
2000. That process is ongoing.

The Company has been  successful  in  negotiating  Year 2000  amendments  to its
contracts  with several  mission  critical  vendors.  These  amendments  contain
representations  and warranties by the vendors as to their state of readiness to
meet the Year 2000 challenge and  indemnification and other remedies in favor of
the Company in the event the Company  suffers a loss because the vendor does not
successfully manage the change to 2000.

Cost of Year 2000  Efforts.  The  Company  acknowledges  that  work  needs to be
carried out in virtually  all aspects of its business to ensure that the Company
successfully  manages the change to 2000. As previously  disclosed,  the Company
presently estimates these costs to total approximately $13.5 million.

Year 2000 costs are based on  management's  best  estimates,  which were derived
utilizing  numerous   assumptions  of  future  events  including  the  continued
availability  of certain  resources,  third party  modification  plans and other
factors.  However,  there  can be no  guarantee  that  these  estimates  will be
achieved and actual  results  could  differ  materially  from those  plans.  The
Company does not  separately  track the indirect costs incurred in its Year 2000
program.

Through June 30, 1999,  the Company had expended  approximately  $9.2 million of
its total Year 2000  budget.  Through  July 31,  1999,  the most recent date for
which  information is available  prior to this filing,  the Company had expended
approximately $9.7 million of its total Year 2000 budget.

The  Company  anticipates  significant  expenditures  associated  with  employee
retention  efforts,  continued  testing,  clean management of systems,  business
continuity  and  transition  planning and  maintenance  of its Year 2000 Program
Office through March 31, 2000. In addition, the Company anticipates  significant
expenditures  in the fourth  calendar  quarter of 1999 associated with proactive
communications  to its customers.  The Company has allocated $1.7 million of its
total Year 2000  budget to  transition  management  during the period of 1 June,
1999 through  January 31, 2000.  Additional  expenses  will be incurred  through
March 31, 2000.

The Company  expensed  its  remediation  costs as they were  incurred,  with the
exception of new hardware and software  purchases,  which were capitalized.  The
source of funds for Year 2000  remediation  is operating  income of the Company.
The percentage of the Company's  information  technology  budget devoted to Year
2000 efforts in the quarter  ended June 30,  1999,  was  approximately  14%. The
Company is unable to readily  determine the cost of replacement of non-compliant
systems  that  are  being  replaced  in the  ordinary  course  of  business.  No
significant  information technology projects have been deferred due to Year 2000
efforts.

The Company's  Year 2000 Program is complex and reliant upon  coordination  with
numerous  third parties.  Accordingly,  the effort and costs in any given period
will depend  upon  progress.  The  Company's  current  Year 2000 budget of $13.5
million is based on the current  status of the Year 2000  Program and is subject
to change.  The budget of $13.5 million does not take into account any potential
losses the Company may suffer as a result of Year 2000  failures,  or any claims
for loss or damage  that may be asserted  against the Company by third  parties,
which may result if the Company or third parties do not successfully  manage the
effect of the Year 2000 date change.


Risks.  The  Company's  risk  management  office  is  actively  involved  in the
Company's  Year 2000 Program.  The most  reasonably  likely worst case Year 2000
scenario,   disregarding  the  Company's  remediation  efforts  and  contingency
planning,  is: (i) a failure in its loan servicing  software and/or systems,  or
(ii) a failure by one of the  Company's key third party  providers.  Either such
failure would result in material disruption in the Company's operations possibly
preventing it from  discharging its contractual  obligations to service mortgage
loans in an accurate and timely  fashion.  The  consequences  of such disruption
could  include,  among other things,  revocation  of the Company's  status as an
FHA/VA approved  lender/servicer  or Ginnie Mae/Fannie  Mae/Freddie Mac approved
seller/servicer,  incorrect processing and/or reporting of payments to consumers
and investors,  a material loss of revenue,  and  litigation  with third parties
alleging losses related to servicing failure.

While  working to ensure that the  Company's  primary  objective  of business as
usual  before,  during and through 2000 is  achieved,  there can be no guarantee
that its Year 2000 program will be  successful  in all respects or that the date
change for 1999 to 2000 will not  materially  affect the  Company's  business in
some form.

Contingency Planning. The Company's Year 2000 Program is based on the assumption
that 100% impact coverage is neither feasible nor practical. It is possible that
the  Company or third  parties on which the Company  depends may have  unplanned
system  difficulties  during the transition  through 2000, or that third parties
may not successfully manage the change to 2000;  therefore,  an integral part of
the  Company's  Year 2000 Program is the  development  of  contingency  plans in
anticipation of systems or third party failure.

These contingency plans have been developed for individual applications, systems
and business  processes.  Individual  departments within the Company,  including
information  technology,  acting under the supervision and direction of the Year
2000 Program  Enterprise  team, have (a) identified  applicable Year 2000 events
and threats,  (b) considered  the  likelihood of occurrence,  (c) determined the
severity of impact of such events and threats,  and (d) created  preventive  and
continuity  plans to address such events and threats.  Although the  contingency
plans vary by application,  system and business  process,  each of the Company's
contingency  plans include:  identification  of the Company's  systems and third
party risks that the plan  addresses;  an analysis of  strategies  and available
resources to restore and  continue  operations;  and a recovery  and  continuity
program that  identifies  participants,  processes,  and  significant  resources
required. Contingency plans include: identifying alternate providers and locking
them in  contractually  as  applicable;  securing  redundant  telecommunications
resources;  stockpiling of critical  supplies;  developing  manual procedures to
replace automated  procedures;  altering delivery  schedules for certain reports
and services to avoid the rollover period. Alternate providers are not available
for those key third parties  identified above as the Company's sole providers of
certain services.  As to those providers,  the Company has in each case reviewed
and approved the Year 2000 contingency plans adopted by those third parties.  In
the event of a failure in those third parties' contingency plans, the Company is
prepared,  as an  additional  contingency,  to terminate  its contract  with any
non-compliant provider and take over the performance of those services in-house.
In that regard,  it should be noted that the Company retains control of the data
essential to the provision of these services.

The Company's contingency plans have been reviewed and approved by the Company's
Program Office and executive  management and, where possible,  are being tested.
Testing of the Company's  continuity plans is scheduled for completion by August
31, 1999.  Given the  potential  scope of Year 2000 events,  it is possible that
despite considerable  planning,  the Company's business continuity plans for the
date change to 2000 may only assist in the reduction of the degree of disruption
rather than its avoidance.


Transition  Planning.  Transition  planning is concerned  with  identifying  and
preparing for specific issues and risks associated with the period of October 1,
1999  through  March 31,  2000.  The  Company  has  developed  a  corporate-wide
Transition  Strategy.  The objective of the Company in transition planning is to
ensure a Company-wide  capability to manage  internal and  externally  generated
events as and when they might arise.  Transition  plans for the century rollover
and beyond are targeted for  completion  by September  30, 1999.  The Company is
planning  a "dress  rehearsal"  to test its  Transition  capabilities  for early
fourth quarter 1999.

As part of the Company's  Transition planning and overall Year 2000 Program, the
Company has established a moratorium period using a scaled  implementation  plan
to restrict the introduction of minor,  significant and major changes to systems
or business  processes.  The  moratorium  period  will not impair the  Company's
ability to conduct its core businesses and meet the needs of its customers.  The
Company's  Year  2000  Program  will  continue  until  the  end of  March  2000.
Activities planned for the first quarter of 2000 include:

o    Monitoring and verification  activities  surrounding  business  information
     systems;

o    Implementation of maintenance  programs  associated with the system changes
     made to manage  the date  change  to 2000;

o    Working with  customers and  suppliers  regarding any impacts they may have
     sustained as a result of the date change to 2000; and

o    Completing a formal  post-implementation review of the Year 2000 Program to
     assess achievements and lessons learned.

The foregoing  disclosure,  including the  description of a worst case Year 2000
scenario,  is furnished in response to and in  compliance  with the Statement of
the  Commission  Regarding  Disclosure of Year 2000 Issues and  Consequences  by
Public  Companies,  Investment  Advisers,  Investment  Companies,  and Municipal
Securities Issuers, Securities Act Rel. No. 33-7448 (July 30, 1998).


Quantitative and Qualitative Market Risk

     There have been no  material  changes  in the  Company's  market  risk from
September 30, 1998. For information  regarding the Company's  market risk, refer
to Form  10-K  for  the  fiscal  year  ended  September  30,  1998  of  HomeSide
International, Inc.



                           PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings

      HomeSide is a defendant  in a number of legal  proceedings  arising in the
normal course of business.  HomeSide, in management's  estimation,  has recorded
adequate   reserves  in  the  financial   statements  for  pending   litigation.
Management,  after  reviewing  all actions and  proceedings  pending  against or
involving  HomeSide,  considers  that the  aggregate  liability or loss, if any,
resulting from the final outcome of these  proceedings  will not have a material
effect on the financial position of HomeSide.

      In recent years,  the mortgage  banking industry has been subject to class
action  lawsuits  which  allege   violations  of  federal  and  state  laws  and
regulations,  including the propriety of collecting  and paying various fees and
charges.  Class action  lawsuits may be filed in the future against the mortgage
banking industry.


ITEM 6.  Exhibits and Reports on Form 8-K

(a) The following document is filed as a part of this Report:

Number            Description

10.1 First Amendment dated June 22, 1999 to Unsecured Revolving Credit Agreement
     dated June 23, 1998 between HomeSide Lending,  Inc. and National  Australia
     Bank  Limited

10.2 Amended and Restated  Renewal  Promissory  Note dated June 22, 1999 between
     HomeSide Lending, Inc. and National Australia Bank Limited

27   Financial Data Schedule

 (b)   Reports on form 8-K

         HomeSide filed a report on Form 8-K, Item 5, dated April 22, 1999.



                                   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.

                            HomeSide International, Inc.
                            (Registrant)

Date: August 13, 1999       By:   /s/_________________________
                                  Joe K. Pickett
                                  Chairman of the Board, Chief Executive Officer
                                  and Director (Principal Executive Officer)

Date: August 13, 1999       By:  /s/__________________________
                                 W. Blake Wilson
                                 Vice President, Chief Financial Officer
                                 (Principal Financial and Accounting Officer)