EXHIBIT 5.0

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                                 September 13, 2002


Hanover Capital Mortgage Holdings, Inc.
379 Thornall St.
2nd Floor
Edison, New Jersey  08837


Ladies and Gentlemen:

       We have acted as counsel for Hanover Capital Mortgage Holdings, Inc., a
Maryland corporation (the "Company"), in connection with the preparation and
filing with the Securities and Exchange Commission of a registration statement
on Form S-8 (the "Registration Statement") registering 325,333 shares of Common
Stock, par value $.01 per share (the "Plan Shares"), issuable pursuant to the
exercise of stock options or other awards granted under the Company's 1997
Executive and Non-Employee Director Stock Option Plan (the "Plan").

       We have examined copies of the Company's Amended Articles of
Incorporation, By-Laws, the Plan, all resolutions adopted by the Company's Board
of Directors relating to the above and other records and documents that we have
deemed necessary for the purpose of this opinion. We have also examined such
other documents, papers, statutes, and authorities as we have deemed necessary
to form a basis for this opinion. We assume that the issuance of the Plan
Shares by the Company will not cause the Company to issue Common Stock in
excess of the number of shares of Common Stock authorized by the Amended
Articles of Incorporation at the time of issuance.

       Based upon the foregoing, we are of the opinion that the Plan Shares
issuable under the Company's 1997 Executive and Non-Employee Director Stock
Option Plan have been duly authorized and will be (when issued, sold and
delivered as authorized) validly issued, fully paid and non-assessable.

       The opinion set forth herein is limited to matters governed by the laws
of the State of Maryland and the Federal Laws of the United States of America,
and we express no opinion as to any other laws.

       We hereby consent to the filing of this opinion as Exhibit 5.0 to the
Registration Statement.


                                                Very truly yours,


                                                /s/ Piper Rudnick LLP