SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 18, 2006

Bimini Mortgage Management, Inc.

(Exact Name of Registrant as Specified in Charter)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 9.01. FINANCIAL STATEMENTS INFORMATION AND EXHIBITS

In our report on Form 8-K filed by Bimini Mortgage Management, Inc. (the “Company”) on November 8, 2005, no financial information was provided for Opteum Financial Services, LLC (“Opteum”), the Company’s wholly owned subsidiary.  In this report on Form 8-K/A we are providing the financial information listed below.

(a) Consolidated Financial Statements of Business Acquired

The audited consolidated balance sheets of Opteum and its subsidiaries as of November 30, 2004 and 2003, and the related consolidated statements of income, members’ capital and cash flows for each of the three years in the period ended November 30, 2004, appear as Exhibit 99.1 to this report on Form 8-K.

The unaudited condensed consolidated balance sheet of Opteum as of August 31, 2005 and the unaudited condensed consolidated statements of income and cash flows for the nine months ended August 31, 2005 and 2004, appear as Exhibit 99.2 to this report on Form 8-K.

(b) Pro Forma Financial Information

The following unaudited pro forma combined financial statements are based on the Company’s historical financial statements and Opteum’s historical consolidated financial statements, which are included in this filing. The pro forma financial statements are adjusted to give effect to the acquisition of Opteum and the other transactions described in Item 2.01 of the Company’s report on Form 8-K filed on November 8, 2005. The unaudited pro forma combined income statements for the nine months ended September 30, 2005 and the twelve months ended December 31, 2004 give effect to the acquisition of Opteum, the lending of $68 million to Opteum, and the issuance of $50 million of junior subordinated notes as if it had occurred on January 1, 2004. The unaudited pro forma combined balance sheet as of September 30, 2005 gives effect to the acquisition of Opteum and lending of $68 million to Opteum, and the issuance of $50 million of junior subordinated notes as if it had occurred on September 30, 2005.  The adjustments made are more fully described in the notes to the pro forma statements. The acquisition is treated as a purchase transaction, and as such, the purchase price allocations are preliminary in nature and are subject to change and refinement as actual and improved information becomes available.

The unaudited pro forma financial statements are not necessarily indicative of what the actual results of operations or the financial position of the Company would have been assuming the transaction had been completed at the earlier pro forma date. The unaudited pro forma financial statements should be read in conjunction with the historical financial statements and related notes of the Company.

Because of differing fiscal periods, the September 30, 2005 balance sheet of the Company is combined with the August 31, 2005 consolidated balance sheet of Opteum, and the Company’s income statements for the nine-months ended September 30, 2005 and for the year ended December 31, 2004 are combined, respectively, with the consolidated income statements of Opteum for the nine-months ended August 31, 2005 and for the year ended November 30, 2004.

(c) Exhibits

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FORWARD-LOOKING STATEMENTS

This Form 8-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. The words “believe,” “will be able,” “anticipate,” “estimate,” “should,” “will,” “expect,” “continue,” “intend” or similar words are intended to identify forward-looking statements. Such statements involve risks and uncertainties that exist in the Company’s operations and business environment that could render actual outcomes and results materially different than predicted. The Company’s forward-looking statements are based on assumptions about many factors, including, but not limited to: changes in the real estate market, interest rates or the general economy of the markets in which the Company operates; economic, technological or regulatory changes affecting the use of the Internet; the Company’s ability to employ and retain qualified employees; changes in government regulations that are applicable to the Company’s regulated brokerage and property management businesses; the Company’s ability to identify and complete acquisitions and successfully integrate the businesses it acquires; changes in the demand for the Company’s services; the degree and nature of the Company’s competition; and general volatility of the capital markets and the market price of the Company’s common stock. While the Company believes that its assumptions are reasonable at the time forward-looking statements were made, it cautions that it is impossible to predict the actual outcome of numerous factors and, therefore, readers should not place undue reliance on such statements. Forward-looking statements speak only as of the date they are made and the Company undertakes no obligation to update such statements in light of new information or otherwise.

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SIGNATURES

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

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Exhibit 99.1

Opteum Financial
Services, LLC and
Subsidiaries

Financial Statements as of November 30, 2004 and
2003, and for Each of the Three Years in the Period
Ended November 30, 2004, and Independent Auditors’
Report

OPTEUM FINANCIAL SERVICES, LLC AND SUBSIDIARIES

TABLE OF CONTENTS

INDEPENDENT AUDITORS’ REPORT

To the Members of Opteum Financial Services, LLC:

We have audited the accompanying consolidated balance sheets of Opteum Financial Services, LLC and subsidiaries (the “Company”) as of November 30, 2004 and 2003 and the related consolidated statements of income, members’ capital, and cash flows for each of the three years in the period ended November 30, 2004. These financial statements are the responsibility of management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Opteum Financial Services, LLC and subsidiaries as of November 30, 2004 and 2003 and the results of their operations and their cash flows for each of the three years in the period ended November 30, 2004, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 11 to the consolidated financial statements, the Company applied the provisions of Statement of Financial Accounting Standards No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets.”

February 28, 2005

(January 17, 2006 with regard to Notes 4, 11 and 15)

OPTEUM FINANCIAL SERVICES, LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF NOVEMBER 30, 2004 AND 2003

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OPTEUM FINANCIAL SERVICES, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED NOVEMBER 30, 2004, 2003 AND 2002

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OPTEUM FINANCIAL SERVICES, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF MEMBERS’ CAPITAL

FOR THE YEARS ENDED NOVEMBER 30, 2004, 2003 AND 2002

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OPTEUM FINANCIAL SERVICES, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED NOVEMBER 30, 2004, 2003 AND 2002

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OPTEUM FINANCIAL SERVICES, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS OF NOVEMBER 30, 2004 AND 2003 AND FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED NOVEMBER 30, 2004

1.              BUSINESS AND OWNERSHIP

Founded in 1999, Opteum Financial Services, LLC (the “Company”) (formerly Homestar Mortgage Services, LLC) is a privately-held mortgage banker with four strategic divisions:  retail, wholesale, conduit, and servicing. Opteum’s core products that are originated or purchased, are Alt-A and Subprime loans.

Alt-A mortgages are generally first lien mortgages made to borrowers whose credit is generally within typical Fannie Mae and Freddie Mac guidelines but have loan characteristics or documentation criteria that make them non conforming under those guidelines.

Subprime mortgages are made to borrowers whose credit and income histories are generally not within typical Fannie Mae and Freddie Mac guidelines.

Opteum is licensed to originate and purchase loans in 50 states. Currently, the states that comprise a majority of these purchases or originations are California, Georgia, New Jersey and Florida. The percentage of purchases and originations from those states were 33.3%, 26.8%, 8.2% and 6.0% respectively as of November 30, 2004.

The consolidated financial statements include the results of Opteum and its majority owned subsidiaries.   On July 31, 2005 the 51% ownership interest of SouthStar was distributed proportionally to the members and is considered a discontinued operation.

2.              SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation—The accompanying consolidated financial statements are prepared on the accrual basis of accounting. The Company exercises control over its less than 100% owned subsidiaries; therefore, their balances and operations have been consolidated in the accompanying consolidated financial statements, and all intercompany accounts and transactions have been eliminated.

Use of Estimates in the Preparation of Financial Statements—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s estimates and assumptions primarily arise from risks and uncertainties associated with interest rate volatility, credit exposure and regulatory changes. Those estimates have an impact on the Company’s estimates of costs and fees incurred to originate mortgage loans, determination of the value of the Company’s rate locked loan pipeline, the valuation of the Company’s loan servicing rights, and the value of the investments in subordinated interests retained. Although management is not currently aware of any factors that would significantly change its estimates and assumptions in the near term, future changes in market trends and conditions may occur which could cause actual results to differ materially.

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Cash and Cash Equivalents—The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents.

Mortgage Loans Held for Sale—Mortgage loans held for sale represent mortgage loans originated and held pending sale to investors. The mortgages are carried at the lower of cost or market as determined by outstanding commitments from investors or current investor yield requirements calculated on the aggregate loan basis. The Company generally sells loans with servicing rights retained. Gains or losses on such sales are recognized at the time legal title transfers to the investor based upon the difference between the sales proceeds from the final investor and the allocated basis of the loan sold, adjusted for net deferred loan fees and certain direct costs and selling costs. The Company defers net loan origination costs and fees as a component of the loan balance on the balance sheet. Such costs are not amortized and are recognized into income as a component of the gain or loss upon sale.

Valuation Allowance—a valuation allowance is maintained to adjust mortgage loans held for sale to the lower of cost or market.

Retained Interest, Trading—The Company uses warehouse loan arrangements to finance the origination and purchase of pools of principally fixed and adjustable-rate residential first mortgage loans (the “Mortgage Loans”). Subsequent to their origination or purchase, the Company either sells these loans to third party institutional investors through bulk sale arrangements, or through securitization transactions. The Company generally makes several representations and warranties regarding the performance of the Mortgage Loans in connection with each sale or securitization.

The Company accumulates the desired amount of Mortgage Loans, and securitizes them in order to create marketable securities. The Company has completed six securitization transactions during 2004 and one in January 2005, as follows:

The Company, pursuant to a purchase and sale agreement, transfers the Mortgage Loans to Opteum Mortgage Acceptance Corp. (OPTEMAC) (formerly Homestar Mortgage Acceptance Corp.), a wholly-owned special purpose entity set-up for the execution of these securitizations.

OPTEMAC then sells the Mortgage Loans to an institutional third party to serve as Depositor, pursuant to a Mortgage Loan Purchase and Servicing Agreement (“P&S Agreement”). Under this P&S Agreement, the Company makes general representations and warranties for Mortgage Loans sold by the Company.

The Depositor then deposits the Mortgage Loans into a Real Estate Mortgage Investment Conduit trust (the “REMIC”) where the rights to such Mortgage Loans are pooled and converted into marketable debt

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securities pursuant to the P & S Agreement. These securities, issued by the REMIC, are divided into different classes of certificates (the “Certificates”) with varying claims to payments received on the Mortgage Loans. These Certificates are transferred to the depositor in exchange for all of its rights in the Mortgage Loans deposited into the REMIC.

Certain Certificates are rated by Moody’s Investors Service, Inc. (“Moody’s”) and Standard & Poor’s (“S&P”). In all of the securitizations, all of the senior certificate classes were rated “AAA” by S&P, and “Aaa” by Moody’s, respectively. In addition, all of the mezzanine classes of certificates, starting with Class M-1 through the lowest respective subordinate class for each offering, with each lower numerical class designation being subordinated to the previous designation (the “Mezzanine Certificates”), were each given investment grade ratings. Certain of these Certificates are offered to the public (the “Public Certificates”) pursuant to a prospectus. These Public Certificates are sold to underwriters on the closing date pursuant to an underwriting agreement. The proceeds from the sale of the Public Certificates to the underwriters (less an underwriting discount) and the remaining non-publicly offered Certificates are transferred to the Company as consideration for the Mortgage Loans sold to the depositor pursuant to the P & S Agreement.

Finally, the Company transfers the proceeds from the sale of the Public Certificates and the non-publicly offered Certificates representing the residual interest in the REMIC to OPTEMAC pursuant to the Purchase and Sale Agreement. The additional non-publicly offered Certificates, representing prepayment penalties and overcollateralizaton fundings (the “Underlying Certificates”) are held by OPTEMAC in anticipation of a net interest margin (NIM) securitization. Subsequent to a securitization transaction as described above, the Company executes an additional securitization or “resecuritization” of the Underlying Certificates being held by OPTEMAC. This NIM securitization is typically transacted as follows:

OPTEMAC deposits the Underlying Certificates into a trust (the “NIM Trust”) pursuant to a deposit trust agreement. The NIM Trust is a Delaware statutory trust. The NIM trust, pursuant to an Indenture, issues (i) notes (the “NIM Notes”) representing interests in the Underlying Certificates and (ii) an owner trust certificate (the “Trust Certificate”) representing the residual interest in the NIM trust. The NIM Notes were sold to third parties via private placement transactions, and the Trust Certificate is transferred from OPTEMAC to the Company in consideration for the deposit of the Underlying Certificates.

Trading Securities–Securities held for trading are recorded as of the date of purchase or sale at fair value. Changes in fair value subsequent to the purchase date are reflected in earnings as gains and losses from investments. Realized gains and losses are determined on a specific identified basis cost basis.

Mortgage Servicing Rights—The Company recognizes mortgage serving rights (“MSR”) as an asset when separated from the underlying mortgage loans, upon the sale of the loans. Upon sale of a loan, the Company measures the retained MSRs by allocating the total cost of originating a mortgage loan between the loan and the servicing right based on their relative fair values. Gains or losses on the sale of MSRs are recognized when title and all risks and rewards have irrevocably passed to the buyer and there are no significant unresolved contingencies. MSRs are carried at the lower of cost, less accumulated amortization, or fair value. MSRs are amortized in proportion to, and over the period of, the estimated future net servicing income. Such amortization, which is recorded as a reduction of net servicing revenue in the accompanying consolidated financial statements was $12,028,746 and $4,410,651 and $572,831 during 2004, 2003 and 2002, respectively. For purposes of performing its quarterly impairment evaluation, the Company stratifies its portfolio primarily on the basis of interest rates of the underlying mortgage loans and the type of product associated with the MSR’s. The Company measures impairment for each stratum by comparing estimated fair value to the carrying amount. Such

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impairment, which is recorded as a reduction of net servicing revenue in the accompanying consolidated financial statements was $4,248,410, $4,644,614 and $2,319,294 during 2004, 2003 and 2002 respectively. Fair value is estimated based on expected cash flows considering market prepayment estimates, historical prepayment rates, portfolio characteristics, interest rates, and other economic factors.

Fixed Assets—Fixed assets are stated at cost and are depreciated over the estimated useful lives of the assets using the straight-line method. The estimated useful lives for equipment, furniture and fixtures, leasehold improvements, and other fixed assets range from three to five years. Significant improvements and betterments are capitalized if they extend the useful life of the asset. Routine repairs and maintenance are expensed when incurred.

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Loan Origination Fees and Costs—Loan fees, discount points, and certain direct origination costs are recorded as an adjustment of the cost of the loan and are included in gain on sales of loans when the loan is sold. Accordingly, salaries, commissions, benefits and other operating expenses have been reduced by $ 57,199,462, $42,901,652 and $20,639,920 during 2004, 2003 and 2002, respectively, due to direct loan origination costs, including commission costs. Loan fees related to the origination and funding of mortgage loans held for sale are $ 5,770,659, $ 4,841,486 and $2,007,750 during 2004, 2003 and 2002, respectfully.

Income Recognition—Sales of mortgage loans are generally recorded on the date a loan is funded by an investor. Gains or losses on sales of mortgage loans are recognized based upon the difference between the selling price and the carrying value of the related mortgage loans sold.

Interest income and interest expense are recognized as earned. Loans are placed on a nonaccrual status when concern exists as to the ultimate collectibility of principal or interest. Loans return to accrual status when principal and interest become current and are anticipated to be fully collectible.

Servicing Fee Income-Servicing fee income is generally a fee based on a percentage of the outstanding principal balances of the mortgage loans serviced by the Company (or by a subservicer where the Company is the master servicer) and is recorded as income as the installment payments on the mortgages are received by the Company or the subservicer.

Other Interest Expense—Other interest expense represents interest paid and accrued for loans to members and on working capital lines of credit for the servicing portfolio.

Income Taxes—The Company is not a taxable entity under the provisions of the Internal Revenue Code, and accordingly, the Company has not provided for federal or state income taxes. Each member reports its share of the profits and losses of the Company, and federal and state income taxes are computed on the member’s total income from all sources.

Regulated Programs—During the years ended November 30, 2004, 2003 and 2002, the Company originated 2,276, 3,475 and 1,973 FHA/VA insured/guaranteed mortgage loans with loan proceeds of

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$315,275,629, $451,598,681 and $248,548,835, respectively. Additionally, the Company was servicing 4,274, 3,082 and 16 FHA/VA insured/guaranteed mortgage loans with an unpaid principal balance of $564,583,932, $352,029,467 and $1,704,023 at November 30, 2004, 2003 and 2002, respectively.

During the years ended November 30, 2004, 2003 and 2002, the Company issued 179, 201 and 40 Ginnie Mae loan pools with security proceeds of $305,298,209, $293,508,335 and $87,468,882, respectively.

Risk Management of the Mortgage Pipeline—The Company’s mortgage committed pipeline includes interest rate lock commitments (“IRLCs”) that have been extended to borrowers who have applied for loan funding and meet certain defined credit and underwriting criteria. Effective with the adoption of Statement of Financial Accounting Standards (“SFAS”) No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended, the Company classifies and accounts for the IRLCs as freestanding derivatives. Accordingly, IRLCs are recorded at their fair value with changes in fair value recorded to current earnings. The Company uses other derivative instruments to economically hedge the IRLCs, which are also classified and accounted for as freestanding derivatives. Gains (losses) on IRLCs represent the change in value from rate-lock inception to funding date.

Risk Management of Mortgage Loans Held for Sale—The Company’s risk management objective for its mortgage loans held for sale includes use of mortgage forward delivery contracts designed as fair value derivative instruments to protect earnings from an unexpected change due to a decline in value. Effective with the adoption of SFAS No. 133, the Company’s mortgage forward delivery contracts are recorded at their fair value with changes in fair value recorded to current earnings. Gains (losses) on mortgage forward delivery contracts represent the change in value from contract inception to funding date.

IRLCs and derivative assets or liabilities arising from the Company’s derivative activities are included in either receivables or accounts payable and accrued liabilities in the accompanying consolidated financial statements. Changes in the fair values of these derivatives and the associated basis adjustments for mortgage loans held for sale are recorded within gain on sales of mortgage loans. The Company also evaluates its contractual arrangements, assets and liabilities for the existence of embedded derivatives.

Income Per Share:   Basic income per share is computed based on weighted average shares outstanding.  Diluted income per share considers the effect of outstanding options, restricted shares warrants and convertible or redeemable securities.

Reclassifications—Certain prior year balances have been reclassified in order to conform to current year presentation.

3.              MORTGAGE LOANS HELD FOR SALE, NET

Upon the closing of a residential mortgage loan or shortly thereafter, the Company will securitize the majority of its mortgage loan originations. The Company also sells mortgage loans insured or guaranteed by various government-sponsored entities and private insurance agencies. The insurance or guaranty is provided primarily on a nonrecourse basis to the Company, except where limited by the Federal Housing Administration and Veterans Administration and their respective loan programs. At November 30, 2004 and 2003, the Company serviced approximately $5,952,000,000 and $2,769,000,000, respectively, of mortgage loans sold into the secondary market.  All of the Company’s loans held for sale are pledged as collateral under the various financing arrangements described in Note 6.

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Mortgage loans held for sale consist of the following as of November 30:

4.              RETAINED INTEREST, TRADING

Subordinated interests retained represent the over-collateralization and net interest spread, which represents the estimated cash-flows to be received from the trust in the future from mortgage loan securitizations structured as sales in accordance with Statement of Financial Accounting Standard No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (“SFAS 140”). Generally, to meet the sale treatment requirements of SFAS 140, the REMIC Trust is structured as a “qualifying special purpose entity” or QSPE, which specifically limits the trust’s activities, and the Company surrenders control over the mortgage loans upon their transfer to the REMIC Trust. All of the Company’s securitization issues were accounted for as a sale under SFAS 140. The subordinated interests retained are classified as “trading securities” and are reported at fair value with unrealized gains or losses reported in earnings.

Valuation of Investments—The Company classifies its retained interests as trading securities and therefore records these securities at their estimated fair value. In order to value the unrated, unquoted, investments, the Company will record these assets at their estimated fair value utilizing either a) pricing available directly from dealers or b) the present value calculated by projecting the future cash flows of an investment on a publicly available analytical system. When a publicly available analytical system is utilized, the Company will input the following variable factors which will have an impact on determining the market value:

Interest Rate Forecast—The forward LIBOR interest rate curve.

Discount Rate—The present value of all future cash flows utilizing a discount rate assumption established at the discretion of the Company to represent market conditions and value.

Prepayment Forecast—The prepayment forecast may be expressed by the Company in accordance with one of the following standard market conventions: 1) Constant Prepayment Rate (CPR) or 2) Percentage of a Prepayment Vector (PPV). Prepayment forecasts may be changed as the Company observes trends in the underlying collateral as delineated in the Statement to Certificate Holders generated by the REMIC trust’s Trustee for each underlying security.

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Credit Performance Forecast—A forecast of future credit performance of the underlying collateral pool will include an assumption of default frequency, loss severity, and a recovery lag. In general, the Company will utilize the combination of default frequency and loss severity in conjunction with a collateral prepayment assumption to arrive at a target cumulative loss to the collateral pool over the life of the pool based on historical performance of similar collateral by the originator. The target cumulative loss forecast will be developed and noted at the pricing date of the individual security but may be updated by the Company consistent with observations of the actual collateral pool performance.

Default Frequency may be expressed by the Company in accordance with any of three standard market conventions: 1) Constant Default Rate (CDR) 2) Percentage of a Standard Default Assumption (SDA) curve, or 3) a vector or curve established to meet forecasted performance for specific collateral pools.

Loss Severity will be expressed by the Company in accordance with historical performance of similar collateral and the standard market conventions of a percentage of the unpaid principal balance of the forecasted defaults lost during the foreclosure and liquidation process.

During the first year of a new issue the Company may balance positive or adverse effects of the prepayment forecast and the credit performance forecast allowing for deviation between actual and forecasted performance of the collateral pool. After the first year the Company will generally adjust the Prepayment and Credit Performance Forecasts to replicate actual performance trends without balancing adverse and positive effects.

The Company did not receive any cash from their residual investment in NIM Trust Certificates during the year ended November 30, 2004. The following table summarizes the Company’s residual interests in securitizations as of November 30, 2004; there were no residual interests as of November 30, 2003.

Key economic assumptions used in measuring the fair value of retained interests at the date of securitization resulting from securitizations completed during 2004 were as follows:

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At November 30, 2004 key economic assumptions and the sensitivity of the current fair value of residual cash flows to the immediate 10 percent and 20 percent adverse change in those assumptions are as follows:

These sensitivities are hypothetical and should be used with caution. As the figures indicate, changes in fair value based upon a 10 percent variation in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of the variation in a particular assumption on the fair value of the retained interest is calculated without changing any other assumption, in reality, changes in one factor may result in changes in another which may magnify or counteract the sensitivities. To estimate the impact of a 10% and 20% adverse change of the Forward LIBOR curve, a parallel shift in the forward LIBOR curve was assumed based on the Forward LIBOR curve at November 30, 2004.

Static pool losses are calculated by summing the actual and projected future credit losses and dividing them by the original balance of each pool of assets. The amount shown here for each year is calculated based upon all securitizations occurring in that year.

The table below summarizes certain cash flows received from and paid to securitization trusts:

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The following information presents quantitative information about delinquencies and credit losses on securitized financial assets as of November 30, 2004:

5.              MORTGAGE SERVICING RIGHTS

Activities for mortgage servicing rights are summarized as follows at November 30:

Activities in the valuation reserve for mortgage servicing rights is as follows:

Estimated amortization expense for the five years ended November 30:

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At November 30, 2004, key economic assumptions and the sensitivity of the current fair value of mortgage servicing rights cash flows to the immediate 10 percent and 20 percent adverse change in those assumptions are as follows:

These sensitivities are hypothetical and should be used with caution. As the figures indicate, changes in fair value based upon a 10% and 20% variations in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of the variation in a particular assumption on the fair value of the mortgage servicing right is calculated without changing any other assumption.  In reality, changes in one factor may result in changes in another which may magnify or counteract the sensitivities.

6.              WAREHOUSE LINES OF CREDIT AND DRAFTS PAYABLE

The Company issues drafts or wires at loan settlement in order to facilitate the closing of mortgage loans held for sale. Drafts payable represent mortgage loans on which a closing has occurred prior to year end but the related drafts have not cleared the respective bank. Upon clearing the bank, the drafts are funded by the appropriate warehouse line of credit.

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Warehouse and aggregate lines of credit and loans sale agreements accounted for as financing consisted of the following at November 30, 2004 and 2003:

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In addition to the RFC, Colonial Bank, UBS Warburg, and Citigroup facilities, the Company has purchase and sale agreements with Greenwich Capital and Fannie Mae. The agreements allow for the Company to accelerate the sale of its mortgage loan inventory, resulting in a more effective use of its warehouse facilities. The Company has a combined capacity of $300 million under these purchase and sale agreements. There were no amounts sold and being held under these agreements at November 30, 2004. The agreements are not committed facilities and may be terminated at the discretion of either party.

7.              MORTGAGE NOTE PAYABLE

During 2003, the Company entered into a mortgage note agreement on its corporate apartment in the amount of $290,000. The note bears interest at the average six-month LIBOR plus 1.5% with interest due monthly until maturity on June 1, 2012.

8.              OPERATING LEASES

Certain facilities and equipment are leased under short-term lease agreements expiring at various dates through August 2010. All such leases are accounted for as operating leases.

Obligations under noncancelable operating leases which have an initial term of more than a year are as follows:

Rental expense for 2004, 2003 and 2002 was $4,029,000, $2,710,000 and $2,361,531 respectively.

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9.              MINORITY INTEREST

The Company has a 50% interest in profits and distributions made by its joint ventures. These interests represent 51% of the aggregate voting power.

The activity in the minority interest account is as follows:

10.       SAVINGS INCENTIVE PLAN

The Company’s employees have the option to participate in the Company Savings Incentive Plan (the “Plan”). Under the terms of the Plan, eligible employees can make tax-deferred 401(k) contributions, and at the Company’s sole discretion, the Company can match the employees’ contributions as well as make annual profit-sharing contributions to the Plan. For the years ended November 30, 2004 and 2003, the Company made 401(k) matching contributions of $361,409 and $236,643, respectively. The Company also made profit-sharing contributions of $1,949,919 and $1,212,239 in 2004 and 2003, respectively.

11.       DISCONTINUED OPERATION

In August of 2005, the Company transferred its 50% ownership interest in SouthStar Funding (“SouthStar”) to the owners of the Company for $21,500,000, which represented the Company’s basis in SouthStar at the transfer date.  In connection with the transfer, the Company reduced their loans from members by the same amount.  Subsequent to the transaction, the Company converted from a Partnership to an S-Corporation.  The conversion did not have an impact on the Company’s net income.

SFAS No. 144 requires discontinued operations presentation for disposals of a “component” of an entity.  In accordance with SFAS No. 144, for all periods presented, the Company reclassified its consolidated statements of income to reflect income and expenses for its distribution of the Company’s ownership of SouthStar, which occurred on July 31, 2005, as discontinued operations and reclassified its consolidated balance sheets to reflect assets and liabilities related to SouthStar as assets related to discontinued operations and liabilities related to discontinued operations.

Assets related to the discontinued operation consist primarily of mortgage loans held for sale, fixed assets net of accumulated depreciation and cash.  The following table sets forth the balances of the assets related to discontinued operation as of November 30, 2004 and 2003:  (in thousands)

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Liabilities related to the discontinued operation represent the obligation for the Warehouse lines of credit and Accounts Payable. The following table sets forth the balances of the assets related to the discontinued operations as of November 30, 2004 and 2003:

The combined results of operations of the assets related to the discontinued operation for the years ended November 30, 2004, 2003 and 2002 are as follows: