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: June 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 August 4, 2004, the issuer had 14,056,106 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 JUNE 30, 2004

                                      INDEX




                                                                                     PAGES
                                                                                     -----
                                                                                  
                  PART I

Item 1.    Financial Statements (Unaudited)

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

           Condensed Consolidated Statements of Operations for the
           second quarter and the six months ended June 30, 2004 and 2003.......        2

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

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

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

Item 3.    Controls and Procedures..............................................       15

              PART II

Item 1.    Legal Proceeding.....................................................       15

Item 2.    Changes in  Securities...............................................       15

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 and Reports on Form 8-K.....................................       16

           (a)    Exhibits .....................................................       16

           (b)    Reports on Form 8-K...........................................       16

Signatures......................................................................       17




CROWN NORTHCORP, INC. AND SUBSIDIARIES

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




                                                    UNAUDITED
                                                       2004             2003
                                                       ----             ----
                                                             
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                        $    785,120    $  2,052,065
  Accounts receivable - net                           1,593,131       2,405,456
  Prepaid expenses and other assets                     687,147         368,588
                                                   ------------    ------------
            Total current assets                      3,065,398       4,826,109

PROPERTY AND EQUIPMENT - Net                            232,576         111,747

RESTRICTED CASH                                         406,646         257,490

OTHER ASSETS
  Investment in partnerships and joint ventures         410,276         392,985
  Other investments                                   2,130,097       1,939,589
  Loan servicing rights- net                          6,920,256       7,017,674
  Capitalized software cost - net                       857,746       1,026,196
  Acquisition costs                                       2,091           2,091
  Deposits                                               44,104          42,585
                                                   ------------    ------------

            Total other assets                       10,364,570      10,421,120
                                                   ------------    ------------

TOTAL                                              $ 14,069,190    $ 15,616,466
                                                   ============    ============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
  Current portion of long-term obligation             1,278,105       1,294,202
  Accounts payable                                      628,472         638,133
  Accrued expenses:
     Interest                                             4,620          10,688
     Other                                              662,111         884,875
                                                   ------------    ------------

            Total current liabilities                 2,573,308       2,827,898

LONG-TERM OBLIGATIONS:
  Notes and bonds payable - less current portion        575,000         505,979
  Allowance for loan losses & other                     235,979         235,979
                                                   ------------    ------------
            Total long-term obligations                 810,979         741,958

SHAREHOLDERS' EQUITY:
  Common stock                                          152,502         152,502
  Additional paid-in capital                         20,046,425      20,058,116
  Accumulated comprehensive income                      359,444         114,231
  Accumulated deficit                                (9,588,044)     (8,101,180)
  Treasury stock, at cost                              (177,058)       (177,058)
                                                   ------------    ------------

            Total shareholders' equity               10,793,269      12,046,611
                                                   ------------    ------------

TOTAL                                              $ 14,069,190    $ 15,616,467
                                                   ============    ============


See notes to condensed consolidated financial statements.

                                        1



CROWN NORTHCORP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003




                                                       SECOND QUARTER                   YEAR TO DATE
                                                    2004            2003            2004            2003
                                                    ----            ----            ----            ----
                                                                                    
REVENUES:

  Management fees                               $    155,543    $    289,611    $    282,768    $    410,586
  Servicing fees                                     701,040          27,733       1,347,229          55,923
  Interest income                                      9,827         212,602         131,457         226,042
  Other                                                1,103           1,093           1,103           4,043
                                                ------------    ------------    ------------    ------------
            Total revenues                           867,513         531,039       1,762,557         696,594
                                                ------------    ------------    ------------    ------------
EXPENSES:

  Personnel                                        1,078,461         142,072       2,098,713         284,771
  Occupancy, insurance and other                     611,972         150,427       1,246,663         262,461
  Interest                                            53,899           4,395          56,235           8,470
  Minority interest in earnings of subsidiary              -          24,369               -          25,887
  Depreciation and amortization                      193,943          15,499         341,164          30,999
                                                ------------    ------------    ------------    ------------
            Total expenses                         1,938,275         336,762       3,742,775         612,587
                                                ------------    ------------    ------------    ------------

INCOME (LOSS) BEFORE INCOME TAXES                 (1,070,762)        194,277      (1,980,218)         84,007

INCOME TAX (BENEFIT)                                 185,786               -         387,345               -
                                                ------------    ------------    ------------    ------------
NET INCOME (LOSS)                               $   (884,976)   $    194,277    $ (1,592,873)   $     84,007

OTHER COMPREHENSIVE INCOME
  Unrealized gain/(loss)                              22,307         (25,002)         25,515         (25,002)
                                                ------------    ------------    ------------    ------------

COMPREHENSIVE INCOME (LOSS)                     $   (862,669)   $    169,275    $ (1,567,358)   $     59,005
                                                ============    ============    ============    ============

LOSS PER SHARE - BASIC AND DILUTED              $      (0.06)   $       0.02    $      (0.11)   $       0.01
                                                ============    ============    ============    ============

WEIGHTED AVERAGE SHARES OUTSTANDING               14,056,106      12,060,778      14,056,106      12,030,994
                                                ------------    ------------    ------------    ------------


 See notes to condensed consolidated financial statements.

                                        2



CROWN NORTHCORP, INC. AND SUBSIDIARIES

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




                                                                                                 2004          2003
                                                                                                 ----          ----
                                                                                                      
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                                          $(1,592,873)   $    84,007
  Adjustments to reconcile net income (loss) to net cash provided by operating activities:
    Depreciation and amortization                                                                334,547         48,316
    Equiy in income from investment in partnerships and joint ventures                               128              -
    Minority interest in earnings                                                                      -         25,887
    Change in operating assets and liabilities:
      Accounts receivable                                                                        765,314        (11,124)
      Prepaid expenses and other assets                                                         (152,138)        47,785
      Accounts payable and accrued expenses                                                     (298,868)       (78,174)
                                                                                             -----------    -----------
            Net cash used in operating activities                                               (943,890)       116,697
                                                                                             -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment                                                            (148,637)       (60,781)
  Decrease (increase) in restricted cash                                                        (149,156)             -
  Increase in warehouse loans                                                                    (72,372)             -
  Distributions from D-Certificate                                                                     -         17,151
  Decrease (increase) in other investments                                                       (35,043)             -
                                                                                             -----------    -----------
            Net cash provided (used) in investing activities                                    (405,208)       (43,630)
                                                                                             -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from notes payable                                                                     75,000         86,200
  Principal payments on notes payable                                                            (78,459)       (17,997)
                                                                                             -----------    -----------
            Net cash provided by financing activities                                             (3,459)        68,203
                                                                                             -----------    -----------
NET INCREASE (DECREASE) IN CASH DURING THE PERIOD                                             (1,352,557)       141,270
Effect of Exchange rate on cash                                                                   85,612
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                               2,052,065         17,332
                                                                                             -----------    -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                   $   785,120    $   158,602
                                                                                             ===========    ===========
SUPPLEMENTAL CASH FLOW INFORMATION
   Cash paid for interest                                                                    $    10,741    $     6,612


See notes to condensed consolidated financial statements.

                                        3



                     CROWN NORTHCORP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 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.

3.       Loss Per Common Share

         The losses per share for the six months ended June 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.

4.      Property and Equipment

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




                                                                        2004                2003
                                                                        ----                ----
                                                                                    
Property and equipment                                               $ 404,383           $ 272,234
Less accumulated depreciation                                         (171,807)           (160,487)
                                                                     ---------           ---------
Property and equipment - net                                         $ 232,576           $ 111,747
                                                                     =========           =========


                                        5



5.       Preferred Stock

         The company has 1,000,000 authorized shares of preferred stock. At June
         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.

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

                                        6



       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.

8.       Subsequent Events

         Two wholly owned subsidiaries of the company, CRS Bond Portfolio, L.P.
         and CRS Bond Portfolio II, L.P., 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 one of these projects
         on July 8, 2004, the company received a return of $2,218,456 cash on
         this investment. Crown has used a portion of the cash received to
         reduce current liabilities and long-term obligations.

         The three remaining multifamily projects collateralizing tax-exempt
         bonds in the securitization are all subject to contracts for sale. The
         company anticipates that sales of all three projects will close in the
         third quarter of 2004. If these sales

                                        7



         close under their present terms, Crown projects that it will receive
         additional cash totaling approximately $4.75 million from the
         investment in the residual interest of the securitization. There can be
         no assurance either that any or all of these sales will close or, if
         they close, under what terms.

         .

                                        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 quarter of 2004, the company
is also deriving significant revenue from its residual interest in a
securitiztion 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:

-        Crown continues to sustain operating losses following the acquisition
         of European operations. These European operations have historically
         been profitable and management anticipates that the assimilation of
         domestic and overseas operations

                                        9



         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. While the asset sales completed
         to date have significantly increased liquidity and non-operating
         income, the company 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

In the U.S., Crown offers third-party asset management and loan servicing that
meets 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 are 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 a sale
that closed in July 2004; pending transactions would yield additional cash and
non- recurring income (see 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.
There can be no assurances when further dispositions may occur. 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. 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

                                       10


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. 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 company receives fees to serve as a standby servicer in
several transactions and is developing 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
two 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. In 2003, the
company commenced origination of non-conforming residential loans for loan
conduit and correspondent programs. The company seeks to expand this activity
and to also commence the origination of commercial loans.

The acquisition of CNL and CMM has significantly expanded the company's
financial services business. Crown'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. If these strategies are successful, the company would realize
significant amounts of cash and income. At the same time, the company is
actively looking to expand its established asset management, loan servicing and
loan origination businesses in Europe.

While the company's business volumes have expanded, its capital resources remain
limited. Management believes that the pending initiatives to dispose of
interests in multifamily projects in the U.S. could significantly increase
liquidity and improve the company's ability to operate. Continued expansion of
European operations should also improve operating performance. 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.

                                       11


RESULTS OF OPERATIONS FOR THE SECOND QUARTER ENDED JUNE 30, 2004 COMPARED TO THE
SECOND QUARTER ENDED JUNE 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 second quarter of 2004 and the
second quarter of 2003 as well as the six month periods ending June 30, 2004 and
2003 are attributable to 2004 being the initial reporting period for the
consolidated entity.

Total revenues increased $336,474 to $867,513 for the second quarter of 2004
from $531,039 during the same period in 2003. The majority of the increase is
attributable to servicing fees generated from European operations.

Management fees decreased $134,068 from $289,611 for the second quarter ended
June 30, 2003 to $155,543 for the corresponding period in 2004. The majority of
this decrease can be attributed to a fee collected in 2003 for the management
and disposition of an asset in a securitization. This fee was approximately
$172,500. Also, due to this and another disposition, monthly fees collected in
conjunction with management of assets declined by approximately $21,700 for the
quarter ending June 30, 2004 compared to the quarter ending June 30, 2003.
Offsetting these two reductions are approximately $62,100 in fees earned from
European operations.

Servicing fees increased from $27,733 for the quarter ending June 30, 2003 to
$701,040 for the quarter ending June 30, 2004. This $673,307 increase is the
result of service fees earned from European operations of approximately $674,500
and a decline in U.S. service fees of some $1,000 due to a reduction of the
servicing portfolio.

Interest income declined from $212,602 for the quarter ended June 30, 2003 to
$9,827 for the corresponding period in 2004. This decrease is due almost
entirely to the receipt of cash, in 2003, 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.

Personnel expenses include salaries, related payroll taxes and benefits, travel
and living expenses and professional development expenses. Personnel expenses
increased $936,389 to $1,078,461 for the second quarter of 2004 from $142,072
for the same period in 2003. The increase was due to European payroll costs of
$635,125 as well as travel expenditures of approximately $198,206 associated
with European operations. Also contributing to the increase were staff additions
in the U.S., which totaled $68,750 for the period, as well as increase in
contract labor of $30,500.

Occupancy, insurance and other operating expenses increased to $611,972 for the
second

                                       12


quarter of 2004 from $150,427 for the comparable period in 2003. The increase of
$461,545 was primarily attributable to rent and office overhead in Europe of
approximately $398,000. The remainder of the increase is attributable to
operations in the U.S. and is the result of an increase in legal expenses of
$29,000, an increase in office rent of some $7,500 and an increase in accounting
fees of approximately $20,200. The increase in accounting fees is related to the
acquisition of Royal at December 31, 2003.

Interest expense increased to $53,899 for the second quarter of 2004 from $4,395
for the second 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 $193,943 for the second quarter of
2004 from $15,499 for the corresponding period in 2003. The majority of the
$178,444 increase is the result of depreciation expense of $22,452 attributable
to European operations and the amortization of capitalized servicing and
software costs associated with European operations totaling $61,864 and $92,019
respectively.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2004 COMPARED TO THE SIX
MONTHS ENDED JUNE 30, 2003

Total revenues increased $1,065,963 to $1,762,557 in the first six months of
2004 from $696,594 during the same period in 2003. This increase was primarily
due to an increase in servicing fees.

Management fees decreased $127,818 from $410,586 for the six months ended June
30, 2003 to $282,768 for the corresponding period in 2004. The majority of this
decrease can be attributed to a fee collected in 2003 for the management and
disposition of an asset in a securitization. This fee was approximately
$172,500. Also, due to this and another disposition, monthly fess collected in
conjunction with management of assets declined by approximately $74,934 for the
six months ending June 30, 2004 compared to the six months ending June 30, 2003.
Offsetting these two reductions are fees earned from European operations of
approximately $97,000 as well as a fee totaling $30,740 earned in conjunction
with the disposition of a managed asset.

Servicing fees increased $1,291,306 from $55,923 for the six months ending June
30, 2003 to $ 1,347,229 for the comparable period in 2004. This increase is
attributable almost entirely to servicing fees earned in Europe.

Interest income decreased $94,585 from $226,042 for the six months ended June
30, 2003 to $131,457 for the comparable period in 2004. The majority of the
increase is attributable to the receipt in 2003 of cash from a residual interest
in a securitization of tax-exempt housing bonds owned by one of Crown's
subsidiaries resulting from the sale of property collateralizing one of the
bonds. This approximately $210,000 decline is offset by interest earned in
Europe of some $114,000.

                                       13

Personnel expenses increased $1,813,942 to $2,098,713 for the first six months
of 2004 from $284,711 for the same period in 2003. The increase was due to
European payroll costs of $1,357,304 as well as travel expenditures of
approximately $256,640 associated with European operations. Also contributing to
the increase were staff additions in the U.S., which totaled $137,500 for the
period, as well as increase in contract labor of $44,630.

Occupancy, insurance and other operating expenses increased to $1,246,663 for
the six months ended June 30, 2004 from $262,461 for the comparable period in
2003. The increase of $984,202 was attributable in part to rent and office
overhead in Europe of approximately $849,000. The remainder of the increase is
attributable to operations in the U.S. and is the result of an increase in legal
expenses of $80,720, an increase in computer expense of some $16,000 and an
increase in accounting fees of approximately $20,400. The increase in accounting
fees is related to the acquisition of Royal at December 31, 2003.

Interest expense increased to $56,235 for the six months ended June 30, 2004
from $8,470 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 six months
ended June 30, 2004. This decrease is the result of the purchase in 2003 of the
minority interest by a subsidiary of the company.

Depreciation and amortization increased to $341,164 for the six months ended
June 30, 2004 from $30,999 for the corresponding period in 2003. The majority of
the $310,165 increase is the result of depreciation expense of $40,603
attributable to European operations as well as amortization of capitalized
servicing and software costs associated with European operations totaling
$80,464 and $184,881 respectively.

LIQUIDITY AND CAPITAL RESOURCES

GENERAL

Cash and cash equivalents decreased by $1,266,945 to $785,120 at June 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

                                       14


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 coming 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 $943,890 during the
first six months of 2004. Operating activities provided $116,697 in the
corresponding period of 2003.

Investing activities used $405,208 during the first six months of 2004. For the
comparable period in 2003, $43,630 was used for investing activities. The
increase in use of funds over 2003 is attributable to an increase in warehouse
loan fundings in Europe as well as the purchase of furniture, fixtures and
equipment in Europe.

Financing activities used cash flows of $3,459 during the first six months of
2004. Such activities provided cash flows of $68,203 during the comparable
period in 2003. During the first six months of 2003, the company borrowed
$86,200 from an affiliate and repaid $17,997 on existing debt. During the first
six months of 2004, the company borrowed $75,000 from an affiliate and repaid
$78,459.

Item 3. - Controls and Procedures

Crown's principal executive and financial officers have evaluated the company's
disclosure controls and procedures in place on June 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. - Changes in Securities

None

                                       15


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 Bond Portfolio, L.P. and CRS
Bond Portfolio II, L.P., 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 one of these projects on July 8, 2004, the company
received a return of $2,218,456 cash on this investment. Crown has used a
portion of the cash received to reduce current liabilities and long-term
obligations.

The three remaining multifamily projects collateralizing tax-exempt bonds in the
securitization are all subject to contracts for sale. The company anticipates
that sales of all three projects will close in the third quarter of 2004. If
these sales close under their present terms, Crown projects that it will receive
additional cash totaling approximately $4.75 million from the investment in the
residual interest of the securitization. There can be no assurance either that
any or all of these sales will close or, if they close, under what terms.

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

(a)  Exhibits


                                               
31.5 Certification of officers of Crown          Filed herewith.
32.4 Certification of officers of Crown          Filed herewith.


 (b) Reports on Form 8-K

     None

                                       16


                                   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: August 6, 2004                       By:   /s/ Rick Lewis
                                                --------------------------------
                                                  Rick Lewis, Vice President,
                                                  Treasurer and Chief Financial
                                                  Officer

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

                                       17


                                INDEX TO EXHIBITS

        
31.5       Certification of officers of Crown (1)
32.4       Certification of officers of Crown (1)


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

                                       18