U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-QSB


(Mark One)

[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

               For the quarterly period ended: September 30, 2004

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

             For transition period from ____________ to ____________

                          Commission File No.: 0-22936

                              Crown NorthCorp, Inc.
        (Exact name of small business issuer as specified in its charter)


                                                              
            Delaware                                         22-3172740
   (State or other jurisdiction of                        (I.R.S. Employer
   incorporation or organization)                         Identification No.)



                     1251 Dublin Road, Columbus, Ohio 43215
                    (Address of principal executive offices)

                                 (614) 488-1169
                           (Issuer's telephone number)

                                       N/A
                   (Former name, former address and former fiscal year,
                               if changed since last report)

        Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the issuer was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes X No

    APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
                             PRECEDING FIVE YEARS.

        Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court.Yes ___ No ___

                      APPLICABLE ONLY TO CORPORATE ISSUERS

        State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.
        As of November 8, 2004, the issuer had 14,656,106 shares of its common
stock, par value $.01 per share, outstanding.

        Transitional Small Business Disclosure Format (check one). 
                                 Yes [ ] No [X]

                              CROWN NORTHCORP, INC.
                                   FORM 10-QSB
                    QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004

                                      INDEX



                                                                                  PAGES
                                                                                  -----
                                                                               
               PART I 

Item 1.  Financial Statements (Unaudited)

         Condensed Consolidated Balance Sheets as of September 30, 2004 and
         December 31, 2003 ...................................................       1

         Condensed Consolidated Statements of Operations for the third quarter
         and the nine months ended September 30, 2004 and 2003 ...............       2

         Condensed Consolidated Statements of Cash Flows for the
         nine months ended September 30, 2004 and 2003 .......................       3

         Notes to Condensed Consolidated Financial Statements--
         September 30, 2004 and 2003 .........................................       4

Item 2.  Management's Discussion and Analysis ................................       9

Item 3.  Controls and Procedures .............................................      16

           PART II

Item 1.  Legal Proceeding ....................................................      16

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds .........      16

Item 3.  Defaults Upon Senior Securities .....................................      16

Item 4.  Submission of Matters to a Vote of Security Holders .................      16

Item 5.  Other Information ...................................................      16

Item 6.  Exhibits ............................................................      17

Signatures.,,,,,,,,,,,,,,, ...................................................      18


CROWN NORTHCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2004 AND DECEMBER 31, 2003



                                                                       UNAUDITED
ASSETS                                                        2004                   2003
                                                          ------------           ------------
                                                                           
CURRENT ASSETS:
  Cash and cash equivalents                               $    796,131           $  2,052,065
  Accounts receivable - net                                  1,248,785              2,405,456
  Prepaid expenses and other assets                            949,645                368,588
                                                          ------------           ------------

            Total current assets                             2,994,561              4,826,109

PROPERTY AND EQUIPMENT - Net                                   212,536                111,747

RESTRICTED CASH                                                373,444                257,490

OTHER ASSETS
  Investment in partnerships and joint ventures                760,676                392,985
  Other investments                                          6,597,412              1,939,589
  Loan servicing rights- net                                 6,908,172              7,017,674
  Capitalized software cost - net                              737,871              1,026,196
  Acquisition costs                                              2,091                  2,091
  Deposits                                                      43,434                 42,585
                                                          ------------           ------------

            Total other assets                              15,049,656             10,421,120
                                                          ------------           ------------

TOTAL                                                     $ 18,630,197           $ 15,616,466
                                                          ============           ============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
  Current portion of long-term obligation                    1,385,063              1,294,202
  Accounts payable                                             686,980                638,133
  Accrued expenses:
     Interest                                                   70,434                 10,688
     Other                                                     316,023                884,875
                                                          ------------           ------------

            Total current liabilities                        2,458,500              2,827,898

LONG-TERM OBLIGATIONS:
  Notes and bonds payable - less current portion                  --                  505,979
  Allowance for loan losses & other                            235,979                235,979
                                                          ------------           ------------
            Total long-term obligations                        235,979                741,958

MINORITY INTEREST                                                 --                     --

SHAREHOLDERS' EQUITY:
  Common stock                                                 158,502                152,502
  Additional paid-in capital                                20,100,425             20,058,116
  Accumulated comprehensive income                           4,872,927                114,231
  Accumulated deficit                                       (9,019,077)            (8,101,180)
  Treasury stock, at cost                                     (177,059)              (177,059)
                                                          ------------           ------------

            Total shareholders' equity                      15,935,718             12,046,610
                                                          ------------           ------------

TOTAL                                                     $ 18,630,197           $ 15,616,466
                                                          ============           ============



See notes to condensed consolidated financial statements.


                                       1



CROWN NORTHCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003



                                                         Third Quarter                     YEAR TO DATE
                                                     2004             2003             2004             2003
                                                 ------------     ------------     ------------     ------------
                                                                                       
REVENUES:
  Management fees                                $     89,902     $    115,271     $    372,671     $    525,857
  Servicing fees                                      739,698           27,794        2,086,926           83,717
  Interest income                                   1,326,764           13,586        1,458,221          239,628
  Income from joint ventures and subsidiaries         363,679                           363,551
  Other                                                   232             --              1,463            4,043
                                                 ------------     ------------     ------------     ------------
            Total revenues                          2,520,275          156,651        4,282,832          853,245
                                                 ------------     ------------     ------------     ------------

EXPENSES:
  Personnel                                         1,336,097          164,952        3,434,810          449,722
  Occupancy, insurance and other                      564,551          114,569        1,811,214          377,030
  Interest                                             20,613            4,396           76,848           12,866
  Minority interest in earnings of subsidiary            --               --               --             25,887
  Depreciation and amortization                       146,053           15,499          487,217           46,498
                                                 ------------     ------------     ------------     ------------
            Total expenses                          2,067,314          299,416        5,810,089          912,003
                                                 ------------     ------------     ------------     ------------

INCOME (LOSS) BEFORE INCOME TAXES                     452,961         (142,765)      (1,527,257)         (58,758)

INCOME TAX (BENEFIT)                                 (208,391)            --           (595,736)            --
                                                 ------------     ------------     ------------     ------------

NET INCOME (LOSS)                                $    661,352     $   (142,765)    $   (931,521)    $    (58,758)

OTHER COMPREHENSIVE INCOME
  Unrealized gain/(loss)                            4,619,494             --          4,645,009          (25,002)
                                                 ------------     ------------     ------------     ------------

COMPREHENSIVE INCOME (LOSS)                      $  5,280,846     $   (142,765)    $  3,713,488     $    (83,760)
                                                 ============     ============     ============     ============

LOSS PER SHARE - BASIC AND DILUTED               $       0.05     $      (0.01)    $      (0.07)    $      (0.00)
                                                 ============     ============     ============     ============


WEIGHTED AVERAGE SHARES OUTSTANDING                14,062,628       12,060,778       14,058,304       12,040,998
                                                 ============     ============     ============     ============


See notes to condensed consolidated financial statements.


                                       2



CROWN NORTHCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003




                                                                                  2004                2003
                                                                              -----------         -----------
                                                                                           
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                           $  (931,521)        $   (58,758)
  Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
    Depreciation and amortization                                                 474,129              72,497
    Equity in income from investment in partnerships and joint ventures          (357,957)               --
    Payment of board of directors fees by issuance of common stock                 60,000              39,500
    Minority interest in earnings                                                    --                25,887
    Change in operating assets and liabilities:
      Accounts receivable                                                         915,476             (29,447)
      Prepaid expenses and other assets                                          (422,428)            (27,153)
      Accounts payable and accrued expenses                                      (235,627)            (52,125)
                                                                              -----------         -----------

            Net cash used in operating activities                                (497,928)            (29,599)
                                                                              -----------         -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment                                             (154,255)            (94,635)
  Decrease (increase) in restricted cash                                         (115,954)               --
  Increase in additional paid in capital                                                               11,694
  Purchase of minority interest                                                                      (111,694)
  Increase in warehouse loans                                                     (51,930)               --
  Distributions from D-Certificate                                                   --                17,151
  Deposits                                                                                             (1,992)
  Decrease (increase) in other investments                                         56,345                --
                                                                              -----------         -----------

            Net cash provided (used) in investing activities                     (265,794)           (179,476)
                                                                              -----------         -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from notes payable                                                     156,598             306,199
  Principal payments on notes payable                                            (603,219)            (82,208)
                                                                              -----------         -----------

            Net cash provided by financing activities                            (446,621)            223,991
                                                                              -----------         -----------

NET INCREASE (DECREASE) IN CASH DURING THE PERIOD                              (1,210,343)             14,916
Effect of Exchange rate on cash                                                   (45,591)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                2,052,065              17,332
                                                                              -----------         -----------


CASH AND CASH EQUIVALENTS AT END OF PERIOD                                    $   796,131         $    32,248
                                                                              ===========         ===========


SUPPLEMENTAL CASH FLOW INFORMATION
   Cash paid for interest                                                     $    19,094         $    13,141




See notes to condensed consolidated financial statements.



                                       3

                     CROWN NORTHCORP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2004 AND 2003
                                   (UNAUDITED)

1.    General and Basis of Presentation

      The accompanying unaudited condensed consolidated financial statements of
      Crown NorthCorp, Inc. and subsidiaries reflect all material adjustments
      consisting of only normal recurring adjustments which, in the opinion of
      management, are necessary for a fair presentation of results for the
      interim periods. Certain information and footnote disclosures required
      under generally accepted accounting principles have been condensed or
      omitted pursuant to the rules and regulations of the Securities and
      Exchange Commission, although the company believes that the disclosures
      are adequate to make the information presented not misleading. These
      financial statements should be read in conjunction with the year-end
      financial statements and notes thereto included in the company's Form
      10-KSB for the year ended December 31, 2003. Investments in majority owned
      affiliates where the company does not have a majority voting interest and
      non-majority-owned affiliates are accounted for on the equity method. All
      significant inter-company balances and transactions have been eliminated.
      Certain reclassifications of prior year amounts have been made to conform
      to the current year presentation.

2.    Significant Accounting Policies

      Acquisitions

      Effective December 31, 2003, the company acquired 100% of the issued and
      outstanding stock of Royal Investments Corp. for 12,000,000 shares of
      common stock of the company. Crown now holds as treasury stock 1,125,803
      of the common stock of the company formerly owned by Royal. Through this
      transaction, the company has acquired Crown NorthCorp Limited ("CNL"), a
      corporation organized under the laws of the United Kingdom, and CNL's
      operating subsidiaries, including Crown Mortgage Management ("CMM"). The
      acquisition was accounted for using the purchase method of accounting and,
      accordingly, the results of operations will be reflected in the financial
      statements from January 1, 2004 forward. Royal was a Delaware corporation
      whose sole shareholder was the company's chairman and chief executive
      officer.

      Foreign Currency Translation

      Results of operations for the company's non-U.S. subsidiaries and
      affiliates are translated from the designated functional currency to the
      U.S. dollar using average exchange rates during the period, while assets
      and liabilities are translated at the


                                       4

      average monthly exchange rate in effect at the reporting date. Resulting
      gains or losses from translating foreign currency financial statements are
      reported as other comprehensive income (loss). The effect of changes in
      exchanges rates between the designated functional currency and the
      currency in which a transaction is denominated are recorded as foreign
      currency transaction gains (losses).

      Capitalized Software Costs

      The company follows the accounting guidance as specified in Statement of
      Position ("SOP") 98-1, "Accounting for the Costs of Computer Software
      Developed or Obtained for Internal Use." The company capitalizes
      significant costs in the acquisition or development of software for
      internal use, including the costs of the software, materials, consultants,
      interest and payroll and payroll-related costs for employees incurred in
      developing internal-use computer software once final selection of the
      software is made. Costs incurred prior to the final selection of software
      and costs not qualifying for capitalization are charged to expense.

      Investments in Partnerships and Joint Ventures

      Certain of Crown's general partner and joint venture investments (ranging
      from 1% to 50%) are carried at cost, adjusted for the company's
      proportionate share of undistributed earnings and losses because the
      company exercises significant influence over their operating and financial
      activities.

      Other Investments

      Two wholly owned subsidiaries of the company, CRS Bond Portfolio, L.P.
      ("CRS I") and CRS Bond Portfolio II, L.P. ("CRS II"), have as their sole
      asset a residual interest in a securitization of tax-exempt bonds
      collateralized by multifamily projects. Since all remaining projects were
      under contacts for sale as of September 30, 2004, management has increased
      its estimate of the carrying value of this residual interest to
      approximately $4,600,000 as of September 30, based upon the sales
      contracts. This increase in investment value is reflected in comprehensive
      income in accordance with SFAS 130 of the Financial Accounting Standards
      Board.

3.    Loss Per Common Share

      The losses per share for the nine months ended September 30, 2004 and 2003
      are computed based on the loss applicable to common stock divided by the
      weighted average number of common shares outstanding during each period.


                                       5

4.    Property and Equipment

      Property and equipment consists of the following at September 30, 2004
      and December 31, 2003:



                                                                     2004            2003
                                                                ---------       ---------
                                                                          
                                                                $280,667        $272,234
       Property and equipment
       Less accumulated depreciation                             (68,131)       (160,487)
                                                                ---------       ---------
       Property and equipment -- net                            $ 212,536       $ 111,747
                                                                =========       =========


5.    Preferred Stock

      The company has 1,000,000 authorized shares of preferred stock. At
      September 30, 2004 and December 31, 2003, Crown had no outstanding shares
      of preferred stock.

6.    Contingencies

      The company has certain contingent liabilities resulting from contractual
      requirements in the United Kingdom in regards to employment contracts
      acquired in the merger with Royal. Upon termination (but only in the event
      of redundancy, as defined under the employment laws of the United
      Kingdom), 11 employees may be entitled to receive severances based upon a
      formula taking into account years and weekly pay.

      The company has certain other contingent liabilities resulting from claims
      incident to the ordinary course of business. Management believes that the
      probable resolution of such contingencies will not materially effect the
      consolidated financial statements of the company.

7.    Statements of Recently Adopted Financial Accounting Standards

      SFAS No. 149, "Amendment to Statement 133 on Derivative Instruments and
      Hedging Activities," was issued by the Financial Accounting Standards
      Board in April 2003. SFAS No. 149 amends and clarifies financial
      accounting and reporting for derivative instruments, including certain
      derivative instruments embedded in other contracts, and for hedging
      activities under SFAS No. 133. SFAS No. 149 is generally effective for
      contracts entered into or modified after June 30, 2003. The adoption of
      SFAS No. 149 on July 1, 2003 did not have any impact on the results of
      operations or financial position of the company.

      SFAS No. 150, "Accounting for Certain Financial Instruments with
      Characteristics 


                                       6

      of both Liabilities and Equity," was issued by the Financial Accounting
      Standards Board in May 2003. SFAS No. 150 establishes standards for the
      classification and measurement of certain freestanding financial
      instruments that embody obligations of the issuer and have characteristics
      of both liabilities and equity. Further, SFAS No. 150 requires disclosures
      regarding the terms of those instruments and settlement alternatives. As
      originally issued, the guidance in SFAS No. 150 was generally effective
      for financial instruments entered into or modified after May 31, 2003, and
      otherwise effective at the beginning of the first interim period beginning
      after June 15, 2003. The adoption of SFAS No. 150 on July 1, 2003 did not
      have any impact on the company's results of operation or financial
      position.

      FIN No. 45, "Guarantor's Accounting and Disclosure Requirements for
      Guarantees -- an interpretation of FASB Statements No. 5, 57 and 107 and
      rescission of FASB Interpretation No. 34," was issued by the Financial
      Accounting Standards Board in November 2002. FIN 45 requires a guarantor
      to provide more detailed interim and annual financial statement
      disclosures about obligations under certain guarantees it has issued. It
      also requires a guarantor, at the inception of new guarantees or ones
      modified after December 31, 2002, to recognize a liability for the fair
      value of the obligation undertaken in issuing the guarantee. The adoption
      of FIN 45 as of January 1, 2003 did not have a material impact on the
      financial position or results of operations of the company.

      In December 2003, the FASB issued a revision to Interpretation No. 46,
      "Consolidation of Variable Interest Entities, an Interpretation of ARB No.
      51" ("FIN 46R") issued in January 2003. FIN 46R clarifies the application
      of ARB No. 51, "Consolidated Financial Statements," with respect to
      certain entities in which equity investors do not have the characteristics
      of a controlling financial interest or do not have sufficient equity at
      risk for the entity to finance its activities without additional
      subordinated financial support. FIN 46R requires the consolidation of
      these entities, known as variable interest entities ("VIEs"), by the
      primary beneficiary of the entity. The primary beneficiary is the entity,
      if any, that will absorb a majority of the entity's expected losses,
      receive a majority of the entity's expected residual returns, or both.
      Among other changes, the revisions of FIN 46R clarified some requirements
      of the original FIN 46 issued in January 2003, eased some implementation
      problems and added new scope exceptions. FIN 46R deferred the effective
      date of the interpretation for public companies to the end of the first
      reporting period after March 15, 2004, except that all public companies
      must at minimum apply the provisions of the interpretation to entities
      that were previously considered "special-purpose entities" under the FASB
      literature prior to the issuance of FIN 46R by the end of the first
      reporting period ending after December 15, 2003. During the year ended
      December 31, 2003, adoption of FIN 46R did not have a material impact on
      the company's financial statements.


                                       7

8.    Subsequent Events

      As discussed in Note 2 above, CRS I and CRS II have as their sole asset a
      residual interest in a securitization of tax-exempt bonds collateralized
      by multifamily projects. The three remaining projects have now been sold.
      The sale of two of these projects on October 6, 2004 resulted in a return
      of $2,507,315 cash on this investment. The sale of the final project on
      November 10, 2004 resulted in an investment return of approximately $2.2
      million cash. Crown is using these proceeds to fund operations.


                                       8

Item 2. -- Management's Discussion and Analysis

THE COMPANY'S BUSINESSES

Crown offers comprehensive financial services to the real estate industry. In
recent years, these services have included third-party asset management and loan
servicing for holders of commercial real estate interests in the United States.
The company significantly expanded its business with the acquisition of CNL and
CMM effective December 31, 2003 (see Note 2 to the Condensed, Consolidated
Financial Statements). In addition to its U.S. operations, Crown is now actively
engaged in Europe in the management and servicing of commercial and residential
real estate interests as well as the origination of certain non-conforming
residential mortgage loans. Overall, Crown derives its revenues primarily from
agreements pursuant to which the company manages commercial, multifamily and
residential real estate and loan assets for the account of others; services on
an active or standby basis individual loans, loan portfolios and assets in
securitized transactions; performs risk management and financial advisory
services; and administers the interests of various corporations, partnerships,
trusts and special-purpose entities. In the third and fourth quarters of 2004,
the company is also deriving very significant revenue from its residual interest
in a securitization of tax-exempt bonds.

FORWARD LOOKING STATEMENTS

The statements contained in this report that are not purely historical are
forward-looking statements within the meaning of Section 21E of the Exchange
Act, including statements regarding the company's expectations, hopes,
intentions or strategies regarding the future. Forward-looking statements
include terminology such as "anticipate," "believe," "has the opportunity,"
"seeking to," "attempting," "appear," "would," "contemplated," "believes," "in
the future" or comparable language. All forward-looking statements included in
this document are based on information available to the company on the date
hereof, and the company assumes no obligation to update any such forward-looking
statements. It is important to note that the company's actual results could
differ materially from those in such forward-looking statements. The factors
listed below are among those that could cause actual result to differ materially
from those in forward-looking statements. Additional risk factors are listed
from time to time in the company's reports on Forms 10-QSB, 8-K and 10-KSB.

Among the risk factors that could materially and adversely affect the future
operating results of the company are:

-     While, for the quarter ending September 30, 2004, Crown is reporting a
      very substantial increase in other comprehensive income as a result of the
      sale of assets, Crown continues to sustain losses from operations
      following the acquisition of European operations. These European
      operations have historically been profitable 


                                       9

      and management anticipates that the assimilation of domestic and overseas
      operations and additional revenues from existing contracts in Europe will
      lead to operating profitability, but there can be no assurance of this
      result.

-     While Crown's business volumes in Europe are generally increasing, its
      domestic business is decreasing as the company and certain of its
      affiliates proceed with efforts to facilitate the sale of substantially
      all of the assets managed in the U.S. Asset sales completed to date have
      significantly increased liquidity and non-operating income. Crown is now
      attempting to utilize the proceeds of these sales to expand or redeploy
      its business lines to achieve operating profitability. There can be no
      assurance that these efforts will be successful.

-     While Crown has increased its capital resources, those resources remain
      limited when compared to those of many of its competitors. The company may
      not be able to compete for business if it cannot increase its capital
      resources through profitable operations, strategic alliances or
      combinations, the raising of additional capital or other means.

-     Crown and certain of its subsidiaries operate as a rated servicers. If
      these entities were to no longer be rated, there would be an adverse
      effect on the company's current business. Additionally, the company's
      ability to obtain new business in certain commercial real estate markets
      would be impaired.

OUTLOOK

Crown's U.S. operations offer third-party asset management and loan servicing
meeting the specialized needs of holders of interests in commercial and
multifamily real estate. Domestic business volumes are decreasing. The company
and certain of its affiliates have been actively engaged in efforts to sell
substantially all of the assets in the U.S. under Crown's management. This sales
strategy is capitalizing on the current environment of low prevailing interest
rates as well as regulatory and other factors impacting certain managed assets.
The company has received substantial cash and non-recurring income from sales
that have closed in July, October and November 2004 (see Note 2 -- Significant
Accounting Policies and Note 8 -- Subsequent Events -- to the Condensed,
Consolidated Financial Statements). As asset dispositions occur, Crown's
domestic asset Management and servicing portfolios are correspondingly reduced.
The company is actively engaged in evaluations of how best to redeploy the cash
proceeds from asset dispositions.

European operations have historically secured significant asset management
business from the privatization of formerly government-held assets as well as
the desire of certain entities to no longer have real estate holdings as a part
of their core business. Management anticipates continuing to secure business
from such sources in the United Kingdom and Scandinavia and developing similar
business in Germany, Belgium and other locales. Management anticipates that
transactions in a portfolio of managed assets in Sweden will yield very
substantial cash returns to Crown by the end of this year.


                                       10

Additionally, European real estate markets make growing use of capital markets
transactions, including mortgage backed securitizations. CNL has been a market
leader in real estate servicing in Europe. The company believes its ability to
provide the extensive data that securitization investors require places the
company in a favorable competitive position to obtain additional business as
these markets continue to expand. The company is also favorably positioned to
attempt to capitalize on regulatory and economic forces that may lead many
European financial institutions to outsource certain services they have
traditionally provided.

In the U.S., the company's loan servicing activities are presently concentrated
on loans and securitizations related to commercial real estate. While this
business is presently declining as serviced loans are paid off, the company
continues to operate as a rated servicer in the U.S. and is actively engaged in
efforts to remain rated.

Crown's European operations service a variety of commercial, multifamily and
residential loans. The residential servicing portfolio in the United Kingdom is
growing at a significant rate. The company receives fees to serve as a standby
servicer in several transactions and continues to develop a master servicing
business in conjunction with a partner. Crown is the only loan servicer
operating in Europe to receive multiple ratings for both commercial and
residential servicing from three rating agencies. New servicing opportunities
in Europe increasingly call for the use of rated servicers. The company is
seeking to capitalize on its multiple ratings to take maximum advantage of
this trend.

Crown's mortgage banking business in Europe is in its early stages. Last year,
the company commenced origination of non-conforming residential loans for loan
conduit and correspondent programs. Crown now holds a minority interest in an
entity that is originating a steadily increasing volume of such loans. The
company seeks to further expand this activity. Crown has also begun development
of a program to originate commercial loans in Europe.

The CNL and CMM acquisitions have significantly expanded Crown's financial
services business. Both the company's revenues and expenses are now
substantially higher than in prior periods. While European operations have
historically been profitable, domestic and European operations combined are
presently operating at a loss, primarily because of initial costs associated
with the absorption of European operations. To improve operating performance,
management has implemented various strategies designed to lead to the
disposition of most of the real estate assets in the company's domestic asset
management and servicing portfolios. As dispositions have occurred, the company
has realized significant amounts of cash and income, which the company is
utilizing to address operational needs. At the same time that it is winding down
much of its domestic business operations, the company is actively looking to
expand its established asset management, loan servicing and loan origination
businesses in Europe.


                                       11

Although the company's business volumes have expanded and its liquidity has
improved, its capital resources remain limited when compared to those of many of
its competitors. Until Crown can demonstrate improved operations to the
investment community, it will continue to rely, as it has in the past, on
affiliates for such investment capital as may be necessary.

RESULTS OF OPERATIONS FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2004 COMPARED TO
THE THIRD QUARTER ENDED SEPTEMBER 30, 2003

As set forth in Note 2 to the Condensed, Consolidated Financial Statements, the
acquisition of CNL and CMM effective December 31, 2003 was accounted for using
the purchase method of accounting. Beginning January 1, 2004, the company's
results of operations reflect the combined entities. Therefore, most of the
large variances in operating results between the third quarter of 2004 and the
third quarter of 2003 as well as the nine month periods ending September 30,
2004 and 2003 are attributable to 2004 being the initial reporting period for
the consolidated entity.

Total revenues increased $2,363,624 to $2,520,275 for the third quarter of 2004
from $156,651 during the same period in 2003. The majority of the increase is
attributable to interest received from the sale of a certain property
collateralizing a residual interest in housing revenue bonds. The remainder of
the increase is from servicing fees generated from European operations.

Management fees decreased $25,369 to $89,902 for the third quarter ended
September 30, 2004 from $115,271 for the corresponding period in 2003. The
majority of this decrease -- approximately $77,000 -- is attributable to
declines in the volume of managed assets due to property sales. Offsetting this
reduction is approximately $54,000 in fees earned from European operations.

Servicing fees increased from to $739,698 for the quarter ended September 30,
2004 from $27,794 for the quarter ending September 30, 2003. This $711,904
increase is the result of service fees earned from European operations of
approximately $723,600 and a decline in U.S. service fees of some $12,000 due to
a reduction in the servicing portfolio.

Interest income increased from $13,586 for the quarter ended September 30, 2003
to $1,326,764 for the corresponding period in 2004. This increase, as noted
above, is due almost entirely to the receipt of cash from a residual interest in
a securitization of tax-exempt bonds owned by Crown subsidiaries. The receipt
came as the result of the sale of a property collateralizing one of the bonds.

Income from partnerships and joint ventures was $363,679 for the quarter ended
September 30, 2004; the amount for the corresponding period in 2003 was $0. This
increase was the result of income from a partnership interest from European
operations.


                                       12

Personnel expenses include salaries, related payroll taxes and benefits, travel
and living expenses and professional development expenses. Personnel expenses
increased $1,171,145 to $1,336,097 for the third quarter of 2004 from $164,952
for the same period in 2003. The increase was due to European payroll costs of
$938,553 as well as travel expenditures of approximately $68,000 associated
with European operations. Also contributing to the increase were salary
increases and staff additions in the U.S., which totaled approximately $164,750
for the period.

Occupancy, insurance and other operating expenses increased to $564,551 for the
third quarter of 2004 from $114,569 for the comparable period in 2003. The
increase of $449,982 was attributable in part to rent and office overhead in
Europe of approximately $204,000. The remainder of the increase is attributable
to operations in the U.S. and is the result of increases in franchise tax
expense of approximately $18,500, accounting fees of approximately $23,000 and
legal expenses of $178,000. The increase in legal fees is primarily attributable
to a dispute Crown is arbitrating concerning the terms and conditions of Crown's
use of future improvements to a loan servicing system. The increase in
accounting fees is related to the acquisition of Royal at December 31, 2003.

Interest expense increased to $20,613 for the third quarter of 2004 from $4,396
for the third quarter of 2003. The increase is due entirely to the accrual of
interest expense on borrowings for the European operations.

Depreciation and amortization increased to $146,053 for the third quarter of
2004 from $15,499 for the corresponding period in 2003. The majority of the
$130,554 increase is the result of depreciation expense of $29,259 attributable
to European operations and the amortization of capitalized servicing and
software costs associated with European operations totaling $100,223.

Other comprehensive income increased to $4,619,494 for the quarter ending
September 30, 2004 from $0 for the comparable period in 2003. The majority of
this increase is from a change in estimated carrying value of an investment in
the residual interest in a securitization of tax-exempt housing bonds (see Note
8 -- Significant Accounting Policies -- to the Condensed, Consolidated Financial
Statements).

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO
THE NINE MONTHS ENDED SEPTEMBER 30, 2003

Total revenues increased $3,429,587 to $4,282,832 in the first nine months of
2004 from $853,245 during the same period in 2003. This increase was primarily
due to an increase in interest income and servicing fees.

Management fees decreased $153,186 to $372,671 for the nine months ended
September 30, 2004 from $525,857 for the corresponding period in 2003. The
majority of this decrease is attributable to a fee of approximately $172,500
collected in 2003 for the 


                                       13

management and disposition of an asset in a securitization. Also, due to this
and other dispositions, monthly fees collected in conjunction with management of
assets declined by approximately $167,000 for the nine months ending September
30, 2004 compared to the same period in 2003. Offsetting these two reductions
are fees earned from European operations of approximately $151,000 as well as a
fee totaling $30,740 earned in conjunction with the disposition of a managed
asset.

Servicing fees increased $2,003,209 to $2,086,926 for the nine months ended
September 30, 2004 from $83,717 for the first nine months of 2003. This increase
is attributable almost entirely to servicing fees earned in Europe.

Interest income increased $1,218,593 to $1,458,221 for the nine months ended
September 30, 2004 from $239,628 for the corresponding period in 2003. This
increase is due almost entirely to the receipt of cash from a residual interest
in a securitization of tax-exempt bonds owned by one of Crown's subsidiaries.
The receipt came as the result of the sale of a property collateralizing one of
the bonds.

Income from partnerships and joint ventures increased to $363,551 for the nine
months ended September 30, 2004 from $0 for the first nine months of 2003. This
increase was the result of income from a European partnership interest.

Personnel expenses include salaries, related payroll taxes and benefits, travel
and living expenses and professional development expenses. Personnel expenses
increased $2,985,088 to $3,434,810 for the first nine months of 2004 from
$449,722 for the same period in 2003. The increase was due to European payroll
costs of $2,297,917 as well as travel expenditures of approximately $325,000
associated with European operations. Also contributing to the increase were
salary increases and staff additions in the U.S., which totaled approximately
$315,000 for the period, as well as increase in contract labor of $45,000.

Occupancy, insurance and other operating expenses increased to $1,811,214 for
the nine months ended September 30, 2004 from $377,030 for the comparable period
in 2003. The increase of $1,434,184 is attributable in part to rent and office
overhead in Europe of approximately $1,053,000. The remainder of the increase is
attributable to operations in the U.S. and is the result of an increase in legal
expenses of approximately $258,000, an increase in computer expense of some
$18,000, an increase in accounting fees of approximately $43,000, an increase in
franchise tax expense of about $16,000, an increase in office rent of some
$12,000 and an increase in professional services of approximately $34,000. The
increase in legal fees is primarily due to a pending arbitration proceeding. The
increase in accounting fees is related to the acquisition of Royal at December
31, 2003 while the rest of the increases were the result of and in conjunction
with normal business operations.


                                       14

Interest expense increased to $76,848 for the nine months ended September 30,
2004 from $12,866 for the comparable period in 2003. The increase is due
entirely to the accrual of interest expense on borrowings for the European
operations.

Minority interest in earnings of subsidiary decreased $25,887 for the nine
months ended September 30, 2004. This decrease is the result of the purchase in
2003 of the minority interest by a subsidiary of the company. There have been no
corresponding transactions in 2004.

Depreciation and amortization increased to $487,217 for the nine months ended
September 30, 2004 from $46,498 for the corresponding period in 2003. The
majority of the $440,719 increase is the result of depreciation expense of
$69,862 attributable to European operations as well as amortization of
capitalized servicing and software costs associated with European operations
totaling $365,500.

Other comprehensive income increased to $4,645,009 for the nine months ending
September 30, 2004 from $(25,002) for the comparable period in 2003. The
majority of this increase is from a change in the estimated carrying value of an
investment in a residual interest in a securitization of tax-exempt housing
bonds (see Note 2 -- Significant Accounting Policies -- to the Condensed,
Consolidated Financial Statements).

LIQUIDITY AND CAPITAL RESOURCES

GENERAL

Cash and cash equivalents decreased by $1,210,343 to $796,131 at September 30,
2004 from $2,052,065 at December 31, 2003. The decrease was due primarily to the
funding of ongoing operations. The company's domestic and European operations
presently have no operating lines or similar bank credit facilities. The
European operations do have a warehouse facility to fund lending operations.
Crown is increasing its liquidity through asset sales (See Note 8 -- Subsequent
Events -- to the Condensed, Consolidated Financial Statements) and is also
seeking to further improve liquidity and access to cash resources by generating
new business revenues, raising additional capital and, in selected instances,
entering into strategic alliances.

Management anticipates that the results of operations for the remainder of the
year will be sufficient to fund its cash operating obligations. However, the
company will continue to seek to expand revenues for its existing client base
while endeavoring to develop new sources of revenue and capital.

HISTORICAL CASH FLOWS

Cash flows from operating activities required the use of $479,928 during the
first nine months of 2004. Operating activities used $29,599 in the
corresponding period of 2003.


                                       15

Investing activities used $265,794 during the first nine months of 2004. For the
comparable period in 2003, $179,476 was used for investing activities. The
increase in use of funds over 2003 is attributable in part to increases in
investments in Europe, warehouse loan fundings in Europe as well as the purchase
of furniture, fixtures and equipment in Europe.

Financing activities used cash flows of $446,621 during the first nine months of
2004. Such activities provided cash flows of $223,991 during the comparable
period in 2003. During the first nine months of 2004, the company borrowed
$156,598 from an affiliate and repaid $603,219. During the first nine months of
2003, the company borrowed $306,199 from an affiliate and repaid $82,208 on
existing debt.

Item 3. -- Controls and Procedures

Crown's principal executive and financial officers have evaluated the company's
disclosure controls and procedures in place on September 30, 2004 and have
concluded that they are effective. There have been no significant changes in
Crown's internal controls or in other factors since that date that could
significantly affect these controls.

PART II -- OTHER INFORMATION

Item 1. -- Legal Proceedings

None

Item 2. -- Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. -- Defaults Upon Senior Securities

None

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

None

Item 5. -- Other Information

Two wholly owned subsidiaries of the company, CRS I and CRS II, have as their
sole asset a residual interest in a securitization of tax-exempt bonds
collateralized by multifamily projects. As a result of the sale of two of these
projects on October 6, 2004, 


                                       16

the company received a return of $2,307,515 cash on this investment. The sale of
the final project on November 10, 2004 resulted in an investment return of
approximately $2.2 million cash. Crown is using these proceeds to fund
operations.

Item 6. -- Exhibits

31.6    Certification of officers of Crown         Filed herewith.
32.5    Certification of officers of Crown         Filed herewith.


                                       17

                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                            CROWN NORTHCORP, INC.



Dated: November 11, 2004                    By:    /s/ Rick Lewis
                                                   -----------------------------
                                                   Rick Lewis, Vice President,
                                                   Treasurer and Chief Financial
                                                   Officer



                                            By:    /s/ Stephen W. Brown
                                                   -----------------------------
                                                   Stephen W. Brown, Secretary


                                       18

                                INDEX TO EXHIBITS


     
31.6    Certification of officers of Crown (1)
32.5    Certification of officers of Crown (1)


--------
(1)    Filed herewith.


                                       19