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 March 31, 1998

                                       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 incorporation or organization)         (I.R.S. Employer Identification No.)

                   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 May 8, 1998

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













                              FINANCIAL INFORMATION

ITEM 1.  Financial Statements

<TABLE>

                          HOMESIDE INTERNATIONAL, INC.
                           CONSOLIDATED BALANCE SHEETS

                    (Dollars in Thousands, Except Share Data)

<CAPTION>
                                                                                                
                                                                                                 (Unaudited)           Predecessor
                                                                                                March 31, 1998     February 10, 1998
<S>                                                                                             <C>                <C>    
      ASSETS

      Cash and cash equivalents                                                                   $   14,045           $   32,113
                                                                                                                       
      Mortgage loans held for sale, net                                                            1,597,550            1,292,403
                                                                                                                      
      Mortgage servicing rights, net                                                               1,872,961            1,781,134
                                                                                                                    
      Accounts receivable, net                                                                       312,081              227,294
                                                                                                                
      Early pool buyout advances                                                                     448,909              374,097
                                                                                                                      
      Premises and equipment, net                                                                     31,595               41,982
                                                                                                                        
      Goodwill                                                                                       708,619                8,870
                                                                                                                        
      Other assets                                                                                    53,263              125,710
                                                                                                 ------------         ------------

      Total Assets                                                                                $5,039,023           $3,883,603
                                                                                                  ============        ============

      LIABILITIES AND STOCKHOLDERS' EQUITY

      Notes payable                                                                               $2,458,747           $2,074,956
      Accounts payable and accrued liabilities                                                       205,209              143,870
      Deferred income taxes                                                                          148,808              175,178
      Long-term debt                                                                                 989,855              900,466
                                                                                                 ------------         ------------

      Total Liabilities                                                                            3,802,619            3,294,470
                                                                                                 ------------         ------------

      Common stock:
           Common stock,  $.01 par value,  119,610,000  shares  authorized and 1
               share issued and outstanding after the merger, 43,394,861 shares
               issued and outstanding before the merger                                                    -                  434
           Class C non-voting  common  stock,  $1.00 par value,  195,000  shares              
               authorized, and 0 shares issued and outstanding after the merger,
               97,138 shares issued and outstanding before the merger                                      -                   97  
      Additional paid-in capital                                                                   1,230,618              476,846
                                                                                                                        
      Retained earnings                                                                                5,786              111,756
                                                                                                       

      Total Stockholders' Equity                                                                   1,236,404              589,133
                                                                                                 ------------         ------------

      Total Liabilities and Stockholders' Equity                                                  $5,039,023           $3,883,603
                                                                                                 ============         ============


</TABLE>
The accompanying  notes are an integral part of these financial statements.


<PAGE>

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

                    (Dollars in Thousands, Except Share Data)


<CAPTION>
                                                                                           Predecessor

                                                       For the Period From  For the Period From      For the Period From
                                                       February 11,1998 to  December 1, 1997 to      December 1, 1996 to
                                                       March 31, 1998       February 10, 1998        February 28, 1997
                                                       -------------------  -------------------      -------------------
<S>                                                    <C>                  <C>                      <C>

REVENUES:

Mortgage servicing fees                                    $  64,267            $  85,826                 $  95,871
Amortization of mortgage servicing rights                                                                   (50,090)
                                                             (37,366)             (48,745)
                                                       -----------------    --------------------     -------------------
    Net servicing revenue                                     26,901               37,081                    45,781
Interest income                                               18,290               22,696                    21,277
Interest expense                                             (15,453)             (23,688)                  (26,497)
                                                       -----------------    --------------------     -------------------
    Net interest revenue                                       2,837                 (992)                   (5,220)
    Net mortgage origination revenue                          14,269               26,019                    22,469
Other income                                                     620                  414                       141
                                                       -----------------    --------------------     -------------------
    Total Revenues                                            44,627               62,522                     63,171
                                               
EXPENSES:

Salaries and employee benefits                                14,630               16,945                     19,669
Occupancy and equipment                                        2,394                3,558                      3,503
Servicing losses on investor-owned loans
   and foreclosure-related expenses                            1,823                6,294                      4,981
Goodwill amortization                                          4,941                  128                        152
Other expenses                                                 8,195                9,327                     11,983
                                                       -----------------    --------------------     -------------------
    Total Expenses                                            31,983               36,252                     40,288
                                                       
Income before income taxes and extraordinary  loss            12,644               26,270                     22,883               
Income tax expense                                                                                                          
                                                               6,858               10,245                      8,750     
                                                       -----------------    --------------------     -------------------
Income before extraordinary loss                                                                                
                                                              5,786                16,025                     14,133
Extraordinary loss                                               -                    -                        6,440
                                                       -----------------    --------------------     -------------------
Net income                                                 $  5,786             $  16,025                   $  7,693
                                                       =================    ====================     ===================

</TABLE>

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

<PAGE>
<TABLE>
                          HOMESIDE INTERNATIONAL, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)

                    (Dollars in Thousands, Except Share Data)

<CAPTION>
                                                                                           Predecessor

                                                      For the Period        For the Period From      For the Period From
                                                      From February         September 1, 1997        September 1, 1996 to
                                                      11, 1998 to           to                       February 28, 1997
                                                      March 31, 1998        February 10, 1998
                                                      ------------------    --------------------    -----------------------
<S>                                                   <C>                   <C>                     <C>
REVENUES:

Mortgage servicing fees                                 $  64,267               $194,690                     $187,507
Amortization of mortgage servicing rights                 (37,366)              (107,458)                     (98,921)            
                                                      ------------------    --------------------    -----------------------
    Net servicing revenue                                  26,901                 87,232                       88,586
                                                      

Interest income                                            18,290                 51,166                       46,518
Interest expense                                          (15,453)               (51,074)                     (48,818)             
                                                      ------------------    --------------------    -----------------------
    Net interest revenue                                    2,837                     92                       (2,300)
                                                      

Net mortgage origination revenue                           14,269                 46,695                       38,990              
Other income                                                  620                    635                          220              
                                                      ------------------    --------------------    -----------------------
    Total Revenues                                         44,627                134,654                      125,496
                                                      

EXPENSES:

Salaries and employee benefits                             14,630                 36,137                       40,319              
Occupancy and equipment                                     2,394                  7,820                        6,840              
Servicing losses on investor-owned loans
   and foreclosure-related expenses                         1,823                 11,465                        9,938              
Goodwill amortization                                       4,941                    283                          304              
Other expenses                                              8,195                 19,085                       23,542              
                                                      ------------------    --------------------    -----------------------
    Total Expenses                                         31,983                 74,790                       80,943
                                                      
Income before income taxes and extraordinary loss          12,644                 59,864                       44,553              
Income tax expense                                          6,858                 23,347                       17,765              
                                                      ------------------    --------------------    -----------------------
Income                                                      5,786                 36,517                       26,788
Extraordinary loss                                             -                      -                         6,440
                                                      ------------------    --------------------    -----------------------
Net income                                               $  5,786              $  36,517                    $  20,348
                                                      ==================    ====================    =======================
</TABLE>
The accompanying notes are an integral part of these financial statements.


<PAGE>
<TABLE>


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

                             (Dollars in Thousands)

<CAPTION>
                                                                                                  Predecessor
                                                                                                  -----------

                                                             For the Period From   For the Period From  For the Period From
                                                             February 11, 1998 to  December 1, 1997 to  December 1, 1996 to
                                                             March 31, 1998        February 10, 1998    February 28, 1997
                                                             --------------------  -----------------    -----------------
<S>                                                          <C>                   <C>                  <C>
CASH FLOWS (USED IN)  PROVIDED BY OPERATING ACTIVITIES:

Net income                                                        $  5,786               $  16,025            $  7,693
                                                                                 
Adjustments  to  reconcile  net  income  to net  cash  used
   in  operating activities:
Amortization of mortgage servicing rights                           37,366                  48,745              50,090
Depreciation and amortization                                        5,345                   2,208               2,755
Servicing losses on investor-owned loans                             1,193                   2,099                 730
Deferred income tax expense                                          6,859                   3,838               4,450
Mortgage loans originated and purchased for sale                (2,793,790)             (4,888,432)         (3,422,752)
Proceeds and principal repayments of mortgage loans held         2,434,895               4,632,483           3,718,707
  for sale
Change in accounts receivable                                      (56,462)                 23,330              14,857   
Change in other assets and accounts payable and accrued                                     
  liabilities                                                      123,728                 (52,441)              9,082
                                                             ------------------- -------------------- ---------------------
Net cash (used in) provided by operating activities               (235,080)               (212,115)            385,612

CASH FLOWS USED IN INVESTING ACTIVITIES:

Purchase of premises and equipment, net                             (3,549)                 (7,498)             (1,574)
Acquisition of mortgage servicing rights                          (162,259)               (114,789)           (131,441)
Net purchases of (proceeds from) risk management contracts          14,185                  70,248             (53,506)
Purchases of early pool buyout advances                            (74,910)                (62,381)                 -
                                                             ------------------- -------------------- ---------------------
Net cash used in investing activities                             (226,533)               (114,420)           (186,521)

CASH FLOWS PROVIDED BY (USED IN)  FINANCING ACTIVITIES:

Net borrowings from (repayments to) banks                          383,791                 342,307             (192,310)
Issuance of notes payable                                           60,000                      -                    -
Payment of debt issue costs                                           (208)                   (245)              (1,800)
Repayment of long term debt                                            (38)                   (204)             (70,150)
Proceeds from issuance of common stock                                  -                      200              116,677
                                                             ------------------- -------------------- ---------------------
Net cash provided by (used in) financing activities                443,545                 342,058             (147,583)
Net (decrease) increase in cash and cash equivalents               (18,068)                 15,523               51,508
Cash and cash equivalents at beginning of period                    32,113                  16,590                1,183
                                                             ------------------- -------------------- ---------------------
Cash and cash equivalents at end of period                        $ 14,045                $ 32,113            $  52,691
                                                             =================== ==================== =====================
</TABLE>

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






<PAGE>
<TABLE>


                          HOMESIDE INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
                             (Dollars in Thousands)
<CAPTION>
                                                                                               Predecessor

                                                             For the Period      For the Period From  For the Period From
                                                             From                September 1, 1997    September 1, 1996 to
                                                             February 11, 1998   to February 10, 1998 February 28, 1997
                                                             to March 31, 1998               
<S>                                                          <C>                 <C>                  <C>   
                                                             
CASH FLOWS (USED IN) PROVIDED BY OPERATING ACTIVITIES:

Net income                                                     $          5,786    $          36,517       $        26,788
Adjustments to reconcile net income to net cash used in
  operating activities:
Amortization of mortgage servicing rights                                37,366              107,458                98,921
Depreciation and amortization                                             5,345                5,037                 4,625
Servicing losses on investor-owned loans                                  1,193                5,781                 7,800
Deferred income tax expense                                               6,859               20,758                12,902
Mortgage loans originated and purchased for sale                     (2,793,790)         (11,453,271)           (6,949,760)
Proceeds and principal repayments of mortgage loans held              2,434,895           11,242,236             7,435,327
  for sale
Change in accounts receivable                                           (56,462)             (48,484)              (37,860)
Change in other assets and accounts payable and accrued                 123,728              (73,723)              (56,622)
  liabilities
                                                             ------------------- -------------------- ---------------------
Net cash (used in) provided by operating activities                   (235,080)            (157,691)               542,121

CASH FLOWS USED IN INVESTING ACTIVITIES:

Purchase of premises and equipment, net                                 (3,549)             (12,037)               (2,170)
Acquisition of mortgage servicing rights                              (162,259)            (261,387)             (229,620)
Net purchases of (proceeds from) risk management contracts               14,185              218,306              (63,055)
Purchases of early pool buyout advances                                (74,910)
                                                                                             (5,692)                   -
                                                             ------------------- -------------------- ---------------------
Net cash used in investing activities                                 (226,533)             (60,810)             (294,845)

CASH FLOWS PROVIDED BY (USED IN)  FINANCING ACTIVITIES:

Net borrowings from (repayments to) banks                               383,791              206,627             (269,729)
Issuance of notes payable                                                60,000               45,000                    -
                                                                                                               
Payment of debt issue costs                                               (208)                (886)                   624
Repayment of long term debt                                                (38)                (358)              (70,298)
Proceeds from issuance of common stock                                      -                    200              116,827 
                                                             ------------------- -------------------- ---------------------
Net cash provided by (used in) financing activities                     443,545              250,583             (222,576)

Net (decrease) increase in cash and cash equivalents                    (18,068)              32,082                24,700
Cash and cash equivalents at beginning of period                         32,113                   31                27,991
                                                             ------------------- -------------------- ---------------------

Cash and cash equivalents at end of period                       $       14,045     $         32,113       $        52,691
                                                             =================== ==================== =====================
</TABLE>


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




<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"). As consideration,  the National paid $27.825
per share for all of the outstanding common stock and paid $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  now owns 100% of  HomeSide's  common  stock and  HomeSide
International,  Inc.  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 period in the prior year have not
been presented.  Instead, a comparison of the period of the prior year that most
closely  corresponds  to the present period is presented.  HomeSide's  operating
results 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
and  managed 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  Company's  prior  fiscal  year  periods.
Therefore,  the prior year period from December 1, 1997 to February 10, 1998 has
been presented in accordance with Regulation 15d-10(e)(4).

     Operating  results for the period from February 11, 1998 to March 31, 1998,
the predecessor  company's period from December 1, 1997 to February 10, 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, 1998. For further  information,  refer to the consolidated
financial  statements and footnotes  thereto included in the annual report which
is incorporated by reference in the Form 10-K for the fiscal year ended February
10, 1998 of HomeSide International, Inc.

             HomeSide, through its, indirect,  wholly-owned operating subsidiary
HomeSide Lending, Inc. ("HomeSide Lending"),  is one of the largest full service
residential mortgage banking companies in the United States,  formed through the
acquisition of the mortgage  banking  operations of BankBoston,  N.A.,  formerly
known as The First  National Bank of Boston  ("BankBoston")  and Barnett  Banks,
Inc. ("Barnett").

2.  MORTGAGE SERVICING RIGHTS

The rollforward of mortgage servicing rights is as follows (in thousands):

<TABLE>
<CAPTION>
<S>                           <C>               <C>                           <C>   
Balance, February 10, 1998      $1,781,134      Balance, November 30, 1997       $1,748,806
Additions                           95,015      Additions                           114,136
Deferred hedge loss                 34,178      Deferred hedge gain                 (33,063)
Amortization                      (37,366)      Amortization                        (48,745)
                              -------------                                   -------------

Balance, March 31, 1998         $1,872,961      Balance, February 10, 199        $1,781,134
                              =============                                   =============
</TABLE>

3.  NOTES PAYABLE

       HomeSide borrows funds on a demand basis from an independent syndicate of
banks under a $2.5 billion credit  facility  which,  at the request of HomeSide,
may be increased to $3.0  billion.  The line of credit is used to provide  funds
for HomeSide's business of originating,  acquiring and servicing mortgage loans.
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 $950.0 million. On February 14,
2000, the line of credit will terminate. The credit agreement contains covenants
that impose limitations and restrictions on HomeSide,  including the maintenance
of certain net worth and ratio  requirements.  Under certain  circumstances  set
forth  in  the  credit   agreement,   borrowings   under  the  agreement  become
collateralized  by  substantially  all  of  HomeSide's  assets.  HomeSide  is in
compliance with all requirements included in the credit agreement.  At March 31,
1998 and February 28, 1997,  $2.4 billion and $1.8 billion,  respectively,  were
outstanding  under the credit line.  Amounts  outstanding  at March 31, 1998 and
February  28,  1997 under the bank line of credit are  comprised  of a warehouse
credit facility of $1.5 billion and $0.8 billion and a servicing-related  credit
facility of $0.9 billion and $1.0 billion,  respectively.  HomeSide  established
short-term borrowings with National Australia Bank at a maximum capacity of $115
million at interest rates equal to LIBOR.  At March 31, 1998,  total  borrowings
from National Australia Bank were $115 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.  At March 31, 1998,  the
weighted  average  interest rate on the amounts  borrowed  under the bank credit
facility was 5.983%,  and the weighted  average  interest rate during the period
from February 11, 1998 to March 31, 1998 was 5.986%.

4.  LONG-TERM DEBT

     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, commencing on November 15, 1996.
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
the maintenance of 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,  Inc.  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 March 31, 1998 is $130.0 million.  As a result of the
merger with the National,  a fair value  adjustment of $23.4 million is included
in the balance of the Parent Notes at March 31, 1998.

        As of March 31, 1998,  outstanding  medium-term notes issued by HomeSide
Lending, Inc. under a $1.5 billion shelf registration statement were as follows
(in thousands):

 Issue Date         Outstanding Balance  Stated Interest Rate  Maturity Date

May 20, 1997             $250,000              6.890%          May 15, 2000
June 30, 1997             200,000              6.883%          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              6.818%          August 1, 2004
September 15, 1997         45,000              6.770%          September 17,2001
March 19, 1998             60,000              5.688%          March 20, 2000
                        ----------
  Total                  $810,000
                        ==========

       As of March 31, 1998, $650.0 million of the outstanding 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 period from February 11, 1998 to March 31, 1998, including the effect of the
interest rate swap agreements,  was 6.071% . Net proceeds from the issuance were
primarily  used  to  reduce  the  amounts  outstanding  under  the  bank  credit
agreement.  Amounts were subsequently  reborrowed under the bank credit facility
to fund the  early  pool  buyout  program.  As a result of the  merger  with the
National,  a fair value adjustment of $1.8 million is included in the balance of
medium-term notes at March 31, 1998.

          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.  A purchase  accounting  premium was
recorded in connection  with HomeSide  assuming the mortgage note payable.  As a
result of the merger with the National,  a fair value adjustment of $4.2 million
is  included  in the balance of the  mortgage-note  payable.  The balance of the
mortgage payable at March 31, 1998 was $26.5 million.

5.  SUBSEQUENT EVENTS

       On April 1,  1998,  HomeSide  entered  into an  agreement  with  Banc One
Mortgage  Corporation  ("Banc One") to acquire the mortgage  servicing assets of
Banc One.  HomeSide  and Banc One have also  entered  into a  Preferred  Partner
agreement,  whereby Banc One will sell a significant  portion of its residential
mortgage  loans to  HomeSide  over the  next  five  years.  The  total  purchase
consideration  is $201.0 million cash. The mortgage  servicing  rights  acquired
relate  to  mortgage  servicing  loans  of  approximately  $18.0  billion.   The
transaction  is subject to regulatory  approvals and is expected to close in the
second calendar quarter of 1998.

         On April 6, 1998,  the Company  signed an  agreement  with  NationsBank
Corporation  ("NationsBank")  whereby  NationsBank  agreed  to sell  HomeSide  a
national  wholesale  mortgage loan network  which was formerly  owned by Barnett
Banks, Inc.

      On April 24, 1998,  an  additional  $125.0  million of 5.788%  medium term
notes maturing on April 24, 2001 were issued by HomeSide Lending, Inc. under its
Shelf  Registration  Statement.  Interest  is  payable  quarterly  in arrears on
January 24,  April 24, July 24 and October 24 of each year,  commencing  on July
24,  1998.  Net  proceeds  were used for working  capital and general  corporate
purposes.

      Effective April 30, 1998, HomeSide Inc., amended its charter to change its
name to HomeSide International, Inc.

      As  a  result  of  NationsBank's   acquisition  of  Barnett  Banks,  Inc.,
NationsBank and the Company entered into an agreement,  subsequently amended, to
release Barnett from a five year agreement to sell certain of its mortgage loans
to HomeSide. In consideration,  the Company received an increase in the weighted
average servicing fee for Barnett portfolio loans currently  serviced and a cash
payment.

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

General

      HomeSide   International,   Inc.,   through  its  wholly-owned   operating
subsidiary  HomeSide  Lending,   Inc.,  is  one  of  the  largest  full  service
residential mortgage banking companies in the United States,  formed through the
acquisition of the mortgage  banking  operations of BankBoston,  N.A.,  formerly
known as The First  National Bank of Boston  ("BankBoston"),  and Barnett Banks,
Inc.   ("Barnett").   HomeSide's  strategy  emphasizes  variable  cost  mortgage
origination  and low cost servicing.  Headquartered  in  Jacksonville,  Florida,
HomeSide ranks as the 5th largest originator and the 6th largest servicer in the
United States for calendar year 1997 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 and BancOne 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 paid $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 now owns 100% of  HomeSide's  common stock and HomeSide  International,
Inc. 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 period in the prior
year have not been presented.  Instead,  a comparison of the period of the prior
year  that  most  closely  corresponds  to  the  present  period  is  presented.
HomeSide's  operating  results 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  and managed 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(s)  reported  according to the Company's  prior
fiscal year periods.  Therefore,  the prior year period from December 1, 1997 to
February 10, 1998 has been presented in accordance with Regulation 15d-10(e)(4).

        Operating  results  for the period from  February  11, 1998 to March 31,
1998, the predecessor  period from December 1, 1997 to February 10, 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, 1998. For further  information,  refer to the consolidated
financial  statements and footnotes  thereto included in the annual report which
is incorporated by reference in the Form 10-K for the fiscal year ended February
10, 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
indicated 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.  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 period from  February 11, 1998 to March
31, 1998 and the predecessor periods from December 1, 1997 to February 10, 1998,
September 1, 1997 to February  10,  1998,  December 1, 1996 to February 28, 1997
and September 1, 1996 to February 28, 1997 (in millions):

<TABLE>
<CAPTION>

                           For the Period From  For the Period From  For the Period From  For the Period From   For the Period From
                           February 11, 1998    December 1, 1997 to  December 1, 1996 to  September 1, 1997 to  September 1, 1996 to
                           to March 31, 1998    February 10, 1998    February 28, 1997    February 10, 1998     February 28, 1997
<S>                        <C>                  <C>                  <C>                  <C>                   <C>    
Correspondent                   $2,325               $2,970               $3,021               $6,280                $6,270
Co-issue                         1,488                1,162                2,610                2,907                 4,595
Broker                             372                  290                  300                  609                   468
                               --------             --------             --------             --------              --------
Total wholesale                  4,185                4,422                5,931                9,796                11,333
Direct                              97                   87                  134                  193                   273
                               --------             --------             --------             --------              --------
Total production                 4,282                4,509                6,065                9,989                11,606
Bulk acquisitions                    2                  380                    -                1,465                     -
                               --------             --------             --------             --------              --------
Total production and 
     acquisitions               $4,284               $4,889               $6,065              $11,454               $11,606
                               ========             ========             ========             ========              ========
</TABLE>
                             


     Total loan production,  excluding bulk  acquisitions,  was $4.3 billion for
the period from  February 11, 1998 to March 31, 1998 compare to $4.5 billion for
the  predecessor  period from  December 1, 1997 to February 10, 1998 compared to
$6.1 billion for the  predecessor  period from  December 1, 1996 to February 28,
1997.  Loan  production  for the  predecessor  period from  September 1, 1997 to
February 10, 1998, excluding bulk acquisitions, totaled $10.0 billion while loan
production  for the  predecessor  period from  September 1, 1996 to February 28,
1997, excluding bulk acquisitions,  totaled $11.6 billion.  Production increases
were  primarily  due to growth in  HomeSide's  correspondent  lending and broker
channels.  HomeSide also made bulk servicing acquisitions of $2.0 million during
the period from February 11, 1998 to March 31, 1998 compared to $380 million for
the  predecessor  period from  December  1, 1997 to  February  10, 1998 and $1.5
billion  during the  predecessor  period from  September 1, 1997 to February 10,
1998.

     HomeSide  continues  to  examine  a number  of ways to  diversify  and grow
revenue sources from its existing and new customer base. As part of this effort,
HomeSide  has  announced an alliance  with a sub-prime  mortgage  lender,  which
allows HomeSide to offer additional  mortgage-related products to the production
network.  HomeSide then sells the loans,  servicing  released,  to its strategic
partners. The subprime lending unit began operations in January 1998.

       On April 1,  1998,  HomeSide  entered  into an  agreement  with  Banc One
Mortgage  Corporation  ("Banc One") to acquire the mortgage  servicing assets of
Banc One.  HomeSide  and Banc One have also  entered  into a  Preferred  Partner
agreement,  whereby Banc One will sell a significant  portion of its residential
mortgage  loans to  HomeSide  over the  next  five  years.  The  total  purchase
consideration  is $201.0 million cash. The mortgage  servicing  rights  acquired
relate  to  mortgage  servicing  loans  of  approximately  $18.0  billion.   The
transaction  is subject to regulatory  approvals and is expected to close in the
second calendar quarter of 1998.

   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 $100 billion,  HomeSide  services the loans of approximately
1.2  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  as well  as the  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 period from  February 11, 1998 to March 31, 1998
and the predecessor period from December 1, 1997 to February 10, 1998, September
1, 1997 to  February  10,  1998,  December  1,  1996 to  February  28,  1997 and
September 1, 1996 to February 28, 1997 (in millions):
<TABLE>
<CAPTION>


                         For the Period From  For the Period From   For the Period From   For the Period From   For the Period From
                         February 11, 1998    December 1, 1997      December 1, 1996      September 1, 1997     September 1, 1996
                         to March 31, 1998    to February 10, 1998  to February 28, 1997  to February 10, 1998  to February 28, 1997
<S>                      <C>                  <C>                   <C>                   <C>                   <C>   
Balance at beginning of 
     period                     $99,956              $98,868               $88,706               $96,554               $85,835
Additions                         4,284                4,920                 6,064                11,454                11,308
Scheduled amortization              320                  438                   576                   973                 1,093
Prepayments                       3,833                3,244                 1,674                 6,403                 3,203
Foreclosures                        129                  150                   141                   370                   247
Sales of servicing                   40                    -                 2,187 (a)               306                 2,408
                               ---------            ---------             ---------             ---------             ---------
     Total reductions             4,322                3,832                 4,578                 8,052                 6,951
                               =========            =========             =========             =========             =========
Balance at end of period        $99,918              $99,956               $90,192               $99,956               $90,192
                               =========            =========             =========             =========             =========
</TABLE>

(a)  Includes  $1.9  billion of  servicing  sold as part of the sale of Honolulu
Mortgage Company.

      The number of loans  serviced at March 31, 1998 was 1,182,913  compared to
1,087,336  at February 28,  1997.  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 the proprietary  servicing  software  purchased from
Barnett.  This system will allow HomeSide to double the number of loans serviced
on a single  system.  Over half of the  servicing  portfolio  is serviced on the
proprietary system. The transfer of the remaining portfolio is expected to occur
by the end of calendar year 1998.


Results of Operations

For the  period  from  February  11,  1998 to March  31,  1998  compared  to the
predecessor  period  from  December  1,  1997  to  February  10,  1998  and  the
predecessor period from December 1, 1996 to February 28, 1997

   Summary


     HomeSide's  net income was $5.8  million for the period from  February  11,
1998 to March 31, 1998 compared to $16.0 million for the predecessor period from
December 1, 1997 to  February  10,  1998 and $7.7  million  for the  predecessor
period from December 1, 1996 to February 28, 1997. Total revenues for the period
from  February 11, 1998 to March 31, 1998 were $44.6  million  compared to $62.5
million for the  predecessor  period from  December 1, 1997 to February 10, 1998
and $63.2 million for the  predecessor  period from December 1, 1996 to February
28, 1997.  The increases on an  annualized  basis in net income and revenues for
the period from February 11, 1998 to March 31, 1998 compared to the  predecessor
period from  December 1, 1997 to February  10, 1998 and the  predecessor  period
from  December  1, 1996 to  February  28, 1997 were  primarily  attributable  to
increases in net servicing revenue,  net mortgage  origination  revenue, and net
interest revenue. Total expenses increased on an annualized basis as a result of
amortization expense of $4.9 million related to the goodwill associated with the
merger with the National (see Note 1). The increase in net servicing  revenue on
an  annualized  basis was  mainly a result of a $9.8  billion  increase  in the
servicing  portfolio to $100.0  billion at March 31, 1998 from $90.2  billion at
February 28, 1997. Net mortgage  origination  revenue increased on an annualized
basis due to loan production volume increases. Net interest revenue increased on
an annualized  basis  primarily as a result of reduced  borrowing costs from the
bank line of credit from improved credit ratings and the issuance of medium-term
notes which expanded borrowing capacity.

    Net Servicing Revenue

      Net  servicing  revenue was $26.9 million for the period from February 11,
1998 to March 31, 1998 compared to $37.1 million for the predecessor period from
December 1, 1997 to  February  10,  1998 and $45.8  million for the  predecessor
period from  December 1, 1996 to February 28,  1997.  Net  servicing  revenue is
comprised  of  mortgage  servicing  fees,   ancillary  servicing  revenue,   and
amortization of mortgage servicing rights.

      Mortgage servicing fees totaled $64.3 million for the period from February
11, 1998 to March 31, 1998 compared to $85.8 million for the predecessor  period
from December 1, 1997 to February 10, 1998 and $95.9 million for the predecessor
period from  December 1, 1996 to February  28,  1997.  The  servicing  portfolio
increased  to $100.0  billion at March 31,  1998  compared  to $90.2  billion at
February 28, 1997, an 11% increase. HomeSide's weighted average interest rate of
the mortgage loans in the servicing portfolio was 7.82% at March 31, 1998, 7.85%
at February  10, 1998 and 7.92% at  February  28,  1997.  The  weighted  average
servicing  fee,  including  ancillary  income,  for the servicing  portfolio was
0.463% for the period from  February 11, 1998 to March 31, 1998,  0.444% for the
predecessor  period from  December 1, 1997 to February 10, 1998,  and 0.423% for
the predecessor period from December 1, 1996 to February 28, 1997, respectively.
The  increase  in the  weighted  average  servicing  fee  was due to  growth  of
ancillary revenues including late fees and other  mortgage-related  products and
higher  proportions of government  loans serviced which  typically have a higher
servicing  fee.  Amortization  expense  was $37.4  million  for the period  from
February  11,  1998  to  March  31,  1998  compared  to  $48.7  million  for the
predecessor  period from December 1, 1997 to February 10, 1998 and $50.1 million
for the  predecessor  period  from  December  1,  1996  to  February  28,  1997.
Amortization  expense  increased on an annualized  basis mainly as a result of a
higher average balance of mortgage  servicing  rights and a decrease of 0.59% in
average mortgage interest rates from February 28, 1997 to March 31, 1998.

   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.  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 $2.8 million for the period from February 11,
1998 to March 31, 1998  compared to ($1.0)  million for the  predecessor  period
from  December  1,  1997  to  February  10,  1998  and  ($5.2)  million  for the
predecessor period from December 1, 1996 to February 28, 1997.  Increases in net
interest  revenue were primarily due to improved  funding rates obtained through
improved credit ratings,  the issue of medium-term  notes and the adoption of an
early pool buyout program.  HomeSide's  primary operating  subsidiary,  HomeSide
Lending,  Inc. has issued a total of $810.0 million of medium-term  notes to the
public  market at an average cost of 6.071% as of March 31,  1998.  The proceeds
were  used to pay down  existing  bank  debt,  increasing  HomeSide's  borrowing
capacity.  An immediate  benefit of this  increased  borrowing  capacity was the
initiation  of an early pool buyout  program,  which  involves  the  purchase of
delinquent government loans from pools early in the foreclosure process, thereby
reducing the unreimbursed interest expense that HomeSide incurs.

   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 $14.3  million for the period from
February  11,  1998  to  March  31,  1998  compared  to  $26.0  million  for the
predecessor  period from December 1, 1997 to February 10, 1998 and $22.5 million
for the  predecessor  period from  December 1, 1996 to February  28,  1997.  The
increase in net mortgage  origination revenue on an annualized basis reflects an
increase in loan production volumes,  primarily through HomeSide's correspondent
lending and broker channels,  and an increase in gains from secondary  marketing
activities.

   Salaries and Employee Benefits

      Salaries and employee  benefits  expense was $14.6  million for the period
from  February  11,  1998 to March 31, 1998  compared  to $16.9  million for the
predecessor  period from December 1, 1997 to February 10, 1998 and $19.7 million
for the  predecessor  period from  December 1, 1996 to February  28,  1997.  The
average number of full-time  equivalent  employees was 1,968 for the period from
February 11, 1998 to March 31, 1998 compared to 1,891 for the predecessor period
from December 1, 1997 to February 10, 1998 and 1,689 for the predecessor  period
from December 1, 1996 to February 28, 1997.

   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
period from  February  11, 1998 to March 31, 1998 was $2.4  million  compared to
$3.6 million for the  predecessor  period from  December 1, 1997 to February 10,
1998 and $3.5  million  for the  predecessor  period  from  December  1, 1996 to
February 28, 1997. The increase in expense on an annualized basis was mainly due
to the  increase in  information  systems  costs  required to handle the growing
mortgage servicing portfolio.

   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 $1.8 million for the period from February 11, 1998 to March 31,
1998 compared to $6.3 million for the  predecessor  period from December 1, 1997
to February 10, 1998 and $5.0 million for the  predecessor  period from December
1, 1996 to February 28, 1997. The decrease was due to the  implementation of the
early pool buyout program.


      Included  in the balance of accounts  payable and accrued  liabilities  at
March 31, 1998 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.

The  following   table  sets  forth   HomeSide's   delinquency  and  foreclosure
experience:

                        Servicing Portfolio Delinquencies
                             (percent by loan count)

                                                     At          Predecessor At
                                               March 31, 1998  February 28, 1997
Servicing Portfolio Delinquencies, 
     excluding bankruptcies (at end of period)
          30 days                                   3.20%             3.27%
          60 days                                   0.67%             0.69%
          90+ days                                  0.61%             0.54%
                                                   =======           =======
               Total past due                       4.48%             4.50%
                                                   =======           =======
          Foreclosures pending                      0.80%             0.72%
                                                   =======           =======


   Other Expenses

      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 $8.2 million for the period from February 11, 1998 to
March 31, 1998 compared to $9.3 million for the predecessor period from December
1, 1997 to February 10, 1998 and $12.0 million for the  predecessor  period from
December 1, 1996 to February  28,  1997.  The  increase in other  expenses on an
annualized  basis was  primarily  due to  expenses  associated  with the growing
mortgage servicing portfolio.


   Income Tax Expense

     HomeSide's income tax expense was $6.9 million for the period from February
11, 1998 to March 31, 1998 compared to $10.2 million the predecessor period from
December 1, 1997 to  February  10,  1998 and $8.8  million  for the  predecessor
period from December 1, 1996 to February 28, 1997. The effective income tax rate
for the period from  February 11, 1998 to March 31, 1998 was 54% compared to 39%
for the  predecessor  period from  December 1, 1997 to February 10, 1998 and 38%
for the  predecessor  period from December 1, 1996 to February 28, 1997,  due to
the tax effects of goodwill as a result of the merger with the National.

Results of Operations

For the  period  from  February  11,  1998 to March  31,  1998  compared  to the
predecessor  period  from  September  1,  1997  to  February  10,  1998  and the
predecessor period from September 1, 1996 to February 28, 1997

   Summary

     HomeSide's  net income was $5.8  million for the period from  February  11,
1998 to March 31, 1998 compared to $36.5 million for the predecessor period from
September  1, 1997 to February  10, 1998 and $20.3  million for the  predecessor
period from  September  1, 1996 to February  28,  1997.  Total  revenues for the
period from  February  11, 1998 to March 31,  1998 were $44.6  million  compared
$134.7 million for the predecessor period from September 1, 1997 to February 10,
1998 and $125.5  million for the  predecessor  period from  September 1, 1996 to
February  28,  1997.  The  increases  on an  annualized  basis in net income and
revenues for the period from February 11, 1998 to March 31, 1998 compared to the
predecessor  period  from  September  1,  1997  to  February  10,  1998  and the
predecessor  period from  September 1, 1996 to February 28, 1997 were  primarily
attributable  to increases in net servicing  revenue,  net mortgage  origination
revenue,  and net interest  revenue.  Total expenses  increased on an annualized
basis as a result of  amortization  expense  related to the goodwill  associated
with the merger with the National  (see Note 1). The  increase in net  servicing
revenue on an annualized basis was mainly a result of a $9.8 billion increase in
the servicing  portfolio to $100.0  billion at March 31, 1998 from $90.2 billion
at  February  28,  1997.  Net  mortgage  origination  revenue  increased  on  an
annualized basis due to loan production volume  increases.  Net interest revenue
increased on an  annualized  basis  primarily  as a result of reduced  borrowing
costs from the bank line of credit from improved credit ratings and the issuance
of medium-term notes which expanded borrowing capacity.

    Net Servicing Revenue

      Net  servicing  revenue was $26.9 million for the period from February 11,
1998 to March 31, 1998 compared to $87.2 million for the predecessor period from
September  1, 1997 to February  10, 1998 and $88.6  million for the  predecessor
period from  September 1, 1996 to February 28, 1997.  Net  servicing  revenue is
comprised  of  mortgage  servicing  fees,   ancillary  servicing  revenue,   and
amortization of mortgage servicing rights.

     Mortgage  servicing fees totaled $64.3 million for the period from February
11, 1998 to March 31, 1998 compared to $194.7 million for the predecessor period
from  September  1,  1997 to  February  10,  1998  and  $187.5  million  for the
predecessor  period from  September 1, 1996 to February 28, 1997.  The servicing
portfolio  increased  to $100.0  billion  at March 31,  1998  compared  to $90.2
billion at February 28,  1997,  an 11%  increase.  HomeSide's  weighted  average
interest  rate of the mortgage  loans in the  servicing  portfolio  was 7.82% at
March 31, 1998,  7.85% at February 10, 1998 and 7.92% at February 28, 1997.  The
weighted average servicing fee,  including  ancillary income,  for the servicing
portfolio  was 0.463% for the period  from  February  11, 1998 to March 31, 1998
compared to 0.451% for the predecessor period from September 1, 1997 to February
10,  1998 and  0.421%  for the  predecessor  period  from  September  1, 1996 to
February 28, 1997. The increase in the weighted average servicing fee was due to
growth of  ancillary  revenues  including  late fees and other  mortgage-related
products and higher  proportions of government  loans  serviced which  typically
have a higher  servicing  fee.  Amortization  expense was $37.4  million for the
period from February 11, 1998 to March 31, 1998  compared to $107.4  million for
the  predecessor  period from  September  1, 1997 to February 10, 1998 and $98.9
million for the predecessor  period from September 1, 1996 to February 28, 1997.
The amortization  expense increased on an annualized basis mainly as a result of
a higher average balance of mortgage servicing rights and a decrease of 0.59% in
average mortgage interest rates from February 28, 1997 to March 31, 1998.

   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.  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 $2.8 million for the period from February 11,
1998 to March 31, 1998 compared to $0.09 million for the predecessor period from
September  1, 1997 to February 10, 1998 and ($2.3)  million for the  predecessor
period from  September 1, 1996 to February  28, 1997.  Increases in net interest
revenue on an  annualized  basis were  primarily  due to improved  funding rates
obtained through improved credit ratings, the issue of medium-term notes and the
adoption  of  an  early  pool  buyout  program.   HomeSide's  primary  operating
subsidiary,  HomeSide  Lending,  Inc.  has  issued a total of $810.0  million of
medium-term  notes to the public market at an average cost of 6.071% as of March
31, 1998.  The proceeds  were used to pay down  existing  bank debt,  increasing
HomeSide's borrowing capacity.  An immediate benefit of this increased borrowing
capacity was the initiation of an early pool buyout program,  which involves the
purchase of  delinquent  government  loans from pools  early in the  foreclosure
process,  thereby  reducing the  unreimbursed  interest  expense  that  HomeSide
incurs.

   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 $14.3  million for the period from
February  11,  1998  to  March  31,  1998  compared  to  $46.7  million  for the
predecessor period from September 1, 1997 to February 10, 1998 and $39.0 million
for the  predecessor  period from  September 1, 1996 to February  28, 1997.  The
increase in net mortgage  origination revenue on an annualized basis reflects an
increase in loan production volumes,  primarily through HomeSide's correspondent
lending and broker channels,  and an increase in gains from secondary  marketing
activities.

   Salaries and Employee Benefits

      Salaries and employee  benefits  expense was $14.6  million for the period
from  February  11,  1998 to March 31, 1998  compared  to $36.1  million for the
predecessor period from September 1, 1997 to February 10, 1998 and $40.3 million
for the  predecessor  period from  September 1, 1996 to February  28, 1997.  The
average number of full-time  equivalent  employees was 1,968 for the period from
February 11, 1998 to March 31, 1998 compared to 1,848 for the predecessor period
from September 1, 1997 to February 10, 1998 and 1,698 for the predecessor period
from September 1, 1996 to February 28, 1997.

   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 was $2.4
million for the period from February 11, 1998 to March 31, 1998 compared to $7.8
million for the  predecessor  period from September 1, 1997 to February 10, 1998
and $6.8 million for the  predecessor  period from September 1, 1996 to February
28, 1997.  The increase in expense on an annualized  basis was mainly due to the
increase in information  systems costs  required to handle the growing  mortgage
servicing portfolio.

   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.

     Servicing losses on investor-owned loans and  foreclosure-related  expenses
totaled  $1.8  million for the period from  February  11, 1998 to March 31, 1998
compared to $11.5 million for the  predecessor  period from September 1, 1997 to
February 10, 1998 and $9.9 million for the predecessor  period from September 1,
1996 to February 28, 1997.  The  decrease was due to the  implementation  of the
early pool buyout program.


      Included  in the balance of accounts  payable and accrued  liabilities  at
March 31, 1998 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.

The  following   table  sets  forth   HomeSide's   delinquency  and  foreclosure
experience:

                        Servicing Portfolio Delinquencies
                             (percent by loan count)

                                                     At          Predecessor At
                                               March 31, 1998  February 28, 1997
Servicing Portfolio Delinquencies, 
     excluding bankruptcies (at end of period)
          30 days                                   3.20%             3.27%
          60 days                                   0.67%             0.69%
          90+ days                                  0.61%             0.54%
                                                   =======           =======
               Total past due                       4.48%             4.50%
                                                   =======           =======

          Foreclosures pending                      0.80%             0.72%
                                                   =======           =======


   Other Expenses

      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 $8.2 million for the period from February 11, 1998 to
March 31, 1998 compared to $19.1 million the  predecessor  period from September
1, 1997 to February 10, 1998 and $23.5 million for the  predecessor  period from
September  1, 1996 to February 28,  1997.  The increase in other  expenses on an
annualized  basis was  primarily  due to  expenses  associated  with the growing
mortgage servicing portfolio.


   Income Tax Expense

     HomeSide's income tax expense was $6.9 million for the period from February
11, 1998 to March 31, 1998 compared to $23.3 million for the predecessor  period
from  September  1,  1997  to  February  10,  1998  and  $17.8  million  for the
predecessor  period from  September 1, 1996 to February 28, 1997.  The effective
income tax rate for the period from  February 11, 1998 to March 31, 1998 was 54%
compared to 39% for the  predecessor  period from  September 1, 1997 to February
10, 1998 and 40% for the  predecessor  period from September 1, 1996 to February
28, 1997,  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 period  from  February  11,  1998 to March 31,  1998,  HomeSide
utilized options on U.S. Treasury bond futures and U.S. Treasury bond futures 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.
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.  However,  in periods of rising interest rates,  the
increase in values of mortgage servicing rights may outpace the decline in value
of the options  included in the hedge position,  because the loss on the options
is limited to the premium paid.

     During the period from February 11, 1998 to March 31, 1998,  deferred gains
and losses on risk management  contracts  resulted in net deferred hedge loss of
$33.1  million.  As of March 31, 1998,  net  deferred  gains of $6.4 million are
included in the carrying value of mortgage servicing rights. The increase in the
estimated  fair value of the  mortgage  servicing  rights  approximated  the net
losses on risk  management  contracts  for this period.  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 March
31, 1998 was ($14.7)  million,  which was equal to their carrying amount because
they are marked-to-market at each reporting date.


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  an  independent
syndicate   of   banks,   including   a   warehouse   credit   facility   and  a
servicing-related  facility,  medium-term  notes 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 used in operations  for the period from February 11, 1998 to March
31, 1998 was $235.1 million. The primary uses of cash in operations were to fund
loan originations and pay corporate expenses.  These uses of cash were offset by
cash provided from  servicing fee income,  loan sales and principal  repayments.
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  was $226.5  million for the period
from February 11, 1998 to March 31, 19987. Cash used in investing activities was
for the purchase and  origination of mortgage  servicing  rights and for funding
the early pool buyout  program.  These uses of cash were offset by net  proceeds
from risk management  contracts.  Other assets  decreased $72.4 million to $53.3
million at March 31, 1998 from $125.7  million at February 11, 1998 primarily as
a result of a decrease in HomeSide's  hedge assets.  Early pool buyout  advances
totaled  $448.9  million at March 31,  1998.  Future uses of cash for  investing
activities will be dependent on the mortgage  origination  market and HomeSide's
hedging needs. Except for the Banc One acquisition (see Note 5), 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.  HomeSide
will fund the Banc One  acquisition  under existing  medium-term  note borrowing
capacity.


Financing
   Net cash provided by financing  activities  was $443.5 million for the period
from  February  11,  1998 to March 31,  1998.  The  primary  source of cash from
financing  activities during the period from February 11, 1998 to March 31, 1998
was $60.0 million from the issuance of  medium-term  notes and net borrowings of
$383.8 million from HomeSide's line of credit.

    During the period from February 11, 1998 to March 31, 1998, net cash used in
operations was $235.1 million,  net cash used in investing activities was $226.5
million  and net cash  provided  by  financing  activities  was $443.5  million,
resulting in a net decrease in cash of $18.1 million.  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 Compliance

     HomeSide  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 HomeSide,  software and
systems  purchased  from  outside  vendors  and  software  and  systems  used by
HomeSide's third party providers. HomeSide has initiated a review and assessment
of all hardware and software to determine  whether it will function  properly in
the Year 2000. It is anticipated  that some level of modification or replacement
of hardware and software will be necessary in order to make  HomeSide's  systems
"Year 2000 Compliant."  HomeSide presently  estimates these remediation costs to
total approximately $15.0 million. Remediation costs are expected to be expensed
as  incurred,  with the  exception  of new  software  purchases,  which  will be
capitalized. The Company has not incurred significant remediation costs prior to
March 31,  1998.  Year 2000  remediation  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. In addition, HomeSide has relationships with vendors, customers and
other third  parties that rely on software and systems that may not be Year 2000
compliant. With respect to such third parties, Year 2000 compliance matters will
not be within  HomeSide's  direct  control.  There can be no assurance that Year
2000 compliance  failures by such third parties will not have a material adverse
effect on HomeSide's results of operations.


                           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 documents are filed as a part of this Report:

              Number       Description
                  27       Financial Data Schedule
    (b) Reports on form 8-K

         HomeSide  filed a report on Form 8-K dated  February 25, 1998,  Items 1
and 7,  including  Unaudited  Consolidated  Pro Forma  Balance  Sheet and Income
Statements.  HomeSide  filed reports on form 8-K dated April 3, 1998,  April 15,
1998 and May 8, 1998, each on Item 5.



                                   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: March 15, 1998      By:   /s/Joe K. Pickett
                                -----------------
                                   Joe K. Pickett
                          Chairman of the Board, Chief Executive Officer
                               and Director (Principal Executive Officer)

Date: March 15, 1998      By:  /s/Kevin D. Race
                               ----------------
                                  Kevin D. Race
                          Vice President, Chief Financial Officer and Treasurer
                          (Principal Financial and Accounting Officer)