[LETTERHEAD OF TOBIN & TOBIN]
                                                                       Exhibit 5



                               February 17, 1998



The Board of Directors
Headlands Mortgage Company
1100 Larkspur Landing Circle, Suite 101
Larkspur, CA  94939

     Re:  Registration Statement on Form S-8 relative to the 1998
          Employee Stock Purchase Plan
          -------------------------------------------------------

Ladies and Gentlemen:

     We have acted as your counsel in connection with the registration under the
Securities Act of 1933, as amended (the "Securities Act"), of an aggregate of up
to 300,000 shares (the "Shares") of common stock (the "Common Stock") of
Headlands Mortgage Company, a California corporation (the "Company"), issuable
pursuant to the Company's the 1998 Employee Stock Purchase Plan (the "Plan").

     This opinion is delivered in accordance with the requirements of Items
601(b)(5) and (23) of Regulation S-K under the Securities Act.

     In connection with this opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
(i) the Registration Statement on Form S-8, relating to the Shares, filed with
the Securities and Exchange Commission (the "Commission") under the Securities
Act on or about the date hereof (together with all exhibits thereto, the
"Registration Statement"), (ii) the Prospectus of the Plan to be given to
participants pursuant to the requirements of Part I of the Registration
Statement, (iii) the Articles of Incorporation of the Company, as amended and
presently in effect, (iv) the Bylaws of the Company in effect as of the date
hereof, (v) resolutions of the Board of Directors of the Company relating to the
issuance of the Shares and the filing and effectiveness of the Registration
Statement, and (vi) a specimen of the certificates representing the Shares. We
have also examined such other documents, certificates and records as we have
deemed necessary or appropriate as a basis for the opinion set forth below.

     In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies, and the
authenticity of the originals of such copies.  As to any facts material to this
opinion which we did not independently establish or verify, we have relied upon
oral or written statements and representations of officers and other
representatives of the Company and others.

 
Board of Directors
Headlands Mortgage Company
February 17, 1998
Page 2



     Members of our firm are admitted to the practice of law in the State of
California and we do not express any opinion as to the laws of any other
jurisdiction.

     Based upon and subject to the foregoing, we are of the opinion that the
300,000 Shares to be issued by the Company pursuant to the Plan have been duly
and validly authorized for issuance, and, upon issuance and delivery of the
Shares in accordance with the terms of the Plan, the Shares will be validly
issued, fully paid and non-assessable.

     We hereby consent to the filing of this opinion with the Commission as
Exhibit 5 to Form S-8 and its incorporation by reference as an exhibit to the
Registration Statement.  In giving such consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Securities Act or under the rules and regulations of the Commission promulgated
thereunder.

                                                Very truly yours,



                                                /s/ Tobin & Tobin