<PAGE>
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549


                             _____________________


                                   FORM 10-Q



[ X ]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
       Exchange Act of 1934 For the quarterly period ended June 30, 1999

                                      or

[   ]Transition Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934
     For the transition period from ___________________ to __________________


                        Commission File Number 0-19847


                          FIRST MORTGAGE CORPORATION
            (Exact name of registrant as specified in its charter)



           California                                  95-2960716
 (State or other jurisdiction of             (I.R.S. Employer Identification
 incorporation or organization)                           No.)





                            3230 Fallow Field Drive
                         Diamond Bar, California 91765
         (Address, including zip code, of principal executive offices)

                                (909) 595-1996
             (Registrant's telephone number, including area code)



Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                      YES  X                       NO____

As of June 30, 1999, 5,302,697 shares of the registrant's common stock were
outstanding.

<PAGE>

                          FIRST MORTGAGE CORPORATION
                                   FORM 10-Q

                                     INDEX




Part I - Financial Information                                   Page

Item 1. Financial Statements:

        Balance Sheet
           June 30, 1999 (Unaudited) and March 31, 1999           3

        Unaudited Statement of Income
           Three Months Ended June 30, 1999 and 1998              4

        Unaudited Statement of Cash Flows
           Three Months Ended June 30, 1999 and 1998              5

        Notes to Unaudited Financial Statements                  6-7

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations                              8-12

Part II - Other Information

Item 6. Exhibits and Reports on Form 8-K                          13

Signatures                                                        14
<PAGE>
                        PART I.  FINANCIAL INFORMATION
<TABLE>

Item 1.   Financial Statements

                          FIRST MORTGAGE CORPORATION

                                 BALANCE SHEET
<CAPTION>
                                             June 30, 1999           March 31, 1999
                                             (Unaudited)
<S>                                           <C>                    <C>
ASSETS
Cash                                            $10,593,000          $14,839,000
Mortgage loans held for sale                     67,985,000           45,463,000
Other receivables and servicing advances          7,221,000            7,378,000
Capitalized servicing rights, net                13,364,000           12,475,000
Property and equipment, net                         738,000              761,000
Prepaid expenses and other assets                 1,533,000              765,000

TOTAL ASSETS                                   $101,434,000          $81,681,000

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
   Notes payable, banks                         $39,322,000          $35,469,000
   Note payable, other                           25,043,000                    -
   Sight drafts payable                           1,318,000            9,450,000
   Accounts payable and accrued liabilities         884,000            2,967,000
   Deferred income taxes                          5,094,000            4,065,000

      Total Liabilities                          71,661,000           51,951,000

STOCKHOLDERS' EQUITY
   Preferred stock, no par value:
      Authorized shares - 1,000,000
      Issued and outstanding shares-None                 -                     -
   Common stock, no par value:
      Authorized shares -  10,000,000
      Issued and outstanding shares-5,302,697
        at June 30, 1999 and 5,347,197 at
        March 31, 1999                            2,741,000            2,924,000
   Retained earnings                             27,032,000           26,806,000

         Total Stockholders' Equity              29,773,000           29,730,000

TOTAL LIABILITIES AND STOCKHOLDERS'
   EQUITY                                      $101,434,000          $81,681,000

</TABLE>
See accompanying notes
<TABLE>
                          FIRST MORTGAGE CORPORATION

                         UNAUDITED STATEMENT OF INCOME


<CAPTION>
                                                Three Months Ended
                                                     June 30
                                          1999              1998
<S>                                       <C>               <C>
REVENUES:
   Loan origination income                 $  775,000       $1,111,000
   Loan servicing income                    1,925,000        1,924,000
   Gain on sale of mortgage loans           2,464,000        3,653,000
   Interest income                            846,000        1,031,000

      Total revenues                        6,010,000        7,719,000

EXPENSES:
   Compensation and benefits                2,307,000        2,418,000
   General and administrative expenses      1,822,000        2,190,000
   Amortization of capitalized              1,157,000          871,000
servicing rights
   Interest expense                           337,000          259,000

      Total expenses                        5,623,000        5,738,000

INCOME BEFORE INCOME TAXES                    387,000        1,981,000

INCOME TAX EXPENSE                            161,000          825,000

NET INCOME                                 $  226,000       $1,156,000


BASIC AND DILUTED EARNINGS PER SHARE       $     0.04       $     0.20

</TABLE>
See accompanying notes


  <PAGE>
  <TABLE>
                          FIRST MORTGAGE CORPORATION
                       UNAUDITED STATEMENT OF CASH FLOWS
  <CAPTION>
                                                  Three Months Ended
                                                        June 30
                                             1999               1998
<S>                                          <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
 Net income                                      $226,000          $1,156,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for deferred income taxes             1,029,000              91,000
Provision for losses on foreclosure               (81,000)             67,000
Amortization of capitalized servicing rights    1,157,000             871,000
Depreciation and amortization of property
 and equipment                                     70,000              64,000
Change in excess service fee                        9,000               6,000
Originations and purchases of mortgage
 loans held for sale                         (116,374,000)       (223,069,000)
Sales and principal repayments of mortgage     93,852,000         206,377,000
 loans held for sale
Change in other receivables and servicing
 advances                                         238,000           (480,000)
Change in prepaid expenses and other assets      (768,000)           236,000
Change in accounts payable and accrued
 liabilities                                   (2,083,000)           350,000
Change in income taxes payable                          -            477,000

Net cash used in operating activities         (22,725,000)       (13,844,000)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of mortgage servicing rights             (27,000)                 -
Originated mortgage servicing rights           (2,028,000)        (1,995,000)
Purchase of furniture, equipment and
 leasehold improvements                           (47,000)           (80,000)

Net cash used in investing activities          (2,102,000)        (2,075,000)

CASH FLOWS FROM FINANCING ACTIVITIES:
Change in notes payable, banks                  3,853,000          5,468,000
Change in sight drafts payable                 (8,132,000)         5,496,000
Change in note payable, other                  25,043,000                  -
Repurchase of common stock                       (183,000)        (1,075,000)

Net cash provided by financing activities      20,581,000          9,889,000

DECREASE IN CASH                               (4,246,000)        (6,030,000)

CASH, BEGINNING OF PERIOD                      14,839,000          8,182,000

CASH, END OF PERIOD                           $10,593,000         $2,152,000

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Interest                                         $314,000           $211,000
Income taxes                                            -                  -
</TABLE>

See accompanying notes

<PAGE>
                          FIRST MORTGAGE CORPORATION
                    NOTES TO UNAUDITED FINANCIAL STATEMENTS
                                 June 30, 1999

1.  BASIS OF PRESENTATION

    The accompanying unaudited financial statements have been prepared in
    accordance with generally accepted accounting principles for interim
    financial information and in accordance with the instructions to Form 10-Q
    and Regulation S-X.  In the opinion of management, all adjustments
    (consisting only of normal recurring accruals) necessary for a fair
    presentation of the results for the interim periods have been included.
    The results of operations for the interim periods are not necessarily
    indicative of the results to be expected for the full year.  In addition,
    this document should be read in conjunction with the financial statements
    and footnotes included in the Company's annual report on Form 10-K for
    fiscal year ended March 31, 1999.

    The preparation of the financial statements of the Company requires
    management to make estimates and assumptions that affect reported amounts.
    These estimates are based on information available as of the date of the
    financial statements.  Therefore, actual results could differ from those
    estimates.


2.  CAPITALIZED SERVICING RIGHTS
<TABLE>

    Activities in capitalized servicing rights are summarized as follows:
    <CAPTION>
                      Three Months ended June 30
                      1999        1998
<S>                   <C>         <C>
Beginning balance     $12,475,000 $7,490,000
   Additions            2,055,000  1,995,000
   Amortizations and
    write offs         (1,166,000)  (887,000)

Ending Balance        $13,364,000 $8,598,000

</TABLE>
3.  NOTES PAYABLE

    At June 30, 1999, the Company had line of credit agreements with two
    nonaffiliated banks, which provided for borrowings up to $70,000,000 and
    $35,000,000 with annual interest payable monthly at 1.25% or the bank's
    reference rate, depending on the level of borrowings and the compensating
    balances maintained.  At June 30, 1999, borrowings under these lines of
    $39,322,000 were collateralized by mortgage loans held for sale.

    The line of credit agreements are subject to renewal on September 1, 1999
    and August 31, 2000, respectively.  Both agreements contain certain
    requirements, including but not limited to, the maintenance of minimum net
    worth, debt to net worth ratio, current ratio, net income and servicing
    portfolio, and restrict the Company's ability to pay dividends.  The
    Company believes its two lines of credit agreements will be renewed prior
    to their expiration.

   In addition to the warehouse lines of credit, the Company makes use of the
   short-term reverse repurchase agreement provided by an investment banking
   firm in connection with its inventory of mortgage-backed securities.  This
   facility tends to carry lower interest rates and also allows the Company to
   better utilize its warehousing lines.  Borrowings outstanding under this
   facility totaled $25.04 million at June 30, 1999.


<PAGE>
4.  EARNINGS PER SHARE
<TABLE>

   The following table sets forth the computation of basic and diluted
   earnings per share:
<CAPTION>
                                         Three Months ended June 30
                                            1999        1998

<S>                                         <C>        <C>
Numerator:
Net income                                   $226,000  $1,156,000

Denominator:
Shares used in computing basic earnings
 per share                                  5,318,757   5,747,411
Effect of stock options treated as
 equivalents under the treasury stock
 method                                         3,722         451
Denominator for diluted earnings per
 share                                       5,322,479   5,747,862
Basic earnings per share                          $.04        $.20
Diluted earnings per share                        $.04        $.20
</TABLE>


5.  NEW ACCOUNTING PRONOUNCEMENTS

    In June 1998, the FASB issued SFAS 133, Accounting for Derivative
    Instruments and Hedging Activities.  This Statement provides guidance for
    the way public enterprises report information about derivatives and hedging
    in annual financial statements and in interim financial reports.  The
    derivatives and hedging disclosure is required for financial statements for
    fiscal years beginning after June 15, 2000.  The Statement will require the
    Company to recognize all derivatives on the balance sheet at fair value.
    Derivatives that are not hedged must be adjusted to fair value through
    income.  If the derivative is a hedge, depending on the nature of the
    hedge, changes in fair value of derivatives will either be offset against
    the change in fair value of the hedged assets, liabilities, or firm
    commitments through earnings or recognized in earnings.  The ineffective
    portion of a derivative's change in fair value will be immediately
    recognized in earnings.  The Company is in the process of evaluating the
    effect of Statement 133, if any, will have on the earnings and financial
    position of the Company.

6.  CONTINGENCIES

    The Company is currently a defendant in certain litigation arising in the
    ordinary course of business.  It is management's opinion that the outcome
    of these actions will not have a material effect on the financial position
    or results of operations of the Company.
<PAGE>
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS


FORWARD LOOKING STATEMENTS

Certain statements in this Form 10-Q are forward-looking statements, including
those that discuss strategies, goals, outlook, projected revenues, income,
return and other financial measures.  These forward-looking statements are
subject to risk and uncertainties that may cause actual results to differ
materially from those contained in the statements, including the following
factors: (i) the direction of interest rates;  (ii) the demand for mortgage
credits;  (iii) the ability to obtain sufficient financial sources for
liquidity and working capital; (iv) changes in laws or regulations governing
mortgage banking operations; and (v) level of competition within the mortgage
banking industry.  In addition, the words "believe,"  "expect,"  "anticipate,"
"intend," "will" and similar words identify forward-looking statements in this
Form 10-Q.


RESULTS OF OPERATIONS:

Three months ended June 30, 1999 compared to three months ended June 30, 1998.


GENERAL

     First Mortgage reported net income of $226,000 or $0.04 per share for the
     quarter ended June 30, 1999, compared to net income of $1.16 million or
     $0.20 per share for the comparable 1998 quarter.  The decrease in net
     income was attributable to the increase in mortgage interest rates during
     the quarter, which resulted in a 47.8% reduction in new loan originations
     as compared to the three months ended June 30, 1998.  The higher interest
     rates also negatively affected origination fees, gain on sale of mortgages
     and interest income.


REVENUES

     For the quarter ended June 30, 1999, the volume of new mortgage loans
     closed decreased by 47.8% to $116.4 million from $223.1 million in the
     prior year quarter.  The decrease is a reflection of higher long-term
     interest rates, which significantly decreased the volume of refinancing
     loans in the market place.

     For the three months ended June 30, 1999, loan origination revenue
     decreased by 30.2% to $775,000 from the June 30, 1998 quarter, due
     primarily to a substantial drop in loan production.

     As of June 30, 1999, the Company serviced $1.604 billion in loans compared
     to $1.663 billion at June 30, 1998, a decrease of 3.6% compared to the
     year-ago quarter.  The run-off in the servicing portfolio was due to heavy
     refinances induced by the low interest rate environment through most of
     last fiscal year.  Nevertheless, the number of loans serviced increased to
     17,647 from 17,450 a year ago, as the run-off of higher balance
     conventional loans was replaced by lower balance FHA loans.  Total loan
     servicing income, including late charges and other miscellaneous fees,
     increased marginally to $1.925 million in the June 1999 quarter, from
     $1.924 million in the prior year quarter.

<PAGE>
<TABLE>

     The following table sets forth certain information pertaining to the
     servicing portfolio of the Company for the period indicated.
<CAPTION>
                                         Three Months Ended June 30
                                           1999           1998
                                          (Dollars in thousands
                                           except average loan balance)
<S>                                      <C>            <C>
 Beginning loan service portfolio        $1,527,507     $1,570,143
   Add:Loans originated                     116,374        223,069
   Less:  Prepayment and Amortization       120,799        222,541
 Ending loan servicing portfolio          1,523,082      1,570,671
   Sub-Servicing                             80,827         92,584
 Total servicing portfolio               $1,603,909     $1,663,255
 Average loan balance (end of period)       $90,888        $95,321
 Number of loans                             17,647         17,450

</TABLE>

     Due to lower new loan production and increases in long-term mortgage
     interest rates during the quarter, the gain on sale of mortgage loans was
     $2.46 million for the three months ended June 30, 1999, a decrease of
     32.5% over the 1998 period.

     Interest income, which reflects the interest received on mortgage loans
     held for sale, decreased to $846,000 for the three months ended June 30,
     1999 from $1.03 million for the comparable prior year quarter.  This
     decrease was due primarily to the smaller funding volume during the June
     1999 quarter as compared to prior year quarter.


EXPENSES

     The major components of the Company's total expenses are (i) compensations
     and benefits, (ii) general and administrative expenses, (iii) amortization
     of capitalized servicing rights, and (iv) interest expense.  Total
     expenses for the three months ended June 30, 1999 decreased by 2.0% to
     $5.62 million from the three months ended June 30, 1998.  Compensations
     and benefits were $2.31 million for the June 1999 quarter, a decrease of
     4.6% over the year-ago quarter.  General and administrative expense
     decreased by $368,000, or 16.8% over prior year.  These lower expenses
     were a result of shrinking production in the quarter.

     Amortization of capitalized servicing rights increased by 32.8% over prior
     year quarter due mainly to the larger investment in mortgage servicing
     rights and higher volume of prepayments from refinances over the
     comparable prior period.

     Interest expense increased 30.1% to $337,000 for quarter ended June 30,
     1999 from $259,000 for the same period in 1998.  The increase was due to
     the utilization of reverse repo line to finance mortgage-backed securities
     in the Company's inventory.


LIQUIDITY AND CAPITAL RESOURCES

     The Company's principal liquidity requirement is the funding of its new
     mortgage loans and loan origination expenses.  To meet these funding
     needs, the Company relies on warehouse lines of credit with banks, short-
     term reverse repurchase agreement with an investment banking firm, its own
     capital, and also cash flows from operations.

<PAGE>
     At June 30, 1999, maximum permitted borrowings under the warehouse line of
     credit agreements with two nonaffiliated banks totaled $105 million and
     the amount outstanding was $39.3 million.  Borrowings under these
     facilities are secured by mortgage loans and GNMA securities.  The
     agreements contain various covenants, including minimum net worth, current
     ratio, net income, servicing portfolio balances, debt to net worth ratio,
     and restrict the Company's ability to pay dividends.  The Company was in
     compliance with all debt covenants at June 30, 1999.  The Company believes
     that the warehouse agreements will be renewed when the current terms
     expire.

     In addition to the warehouse lines of credit, the Company makes use of the
     short-term reverse repurchase agreement provided by an investment banking
     firm in connection with its inventory of mortgage-backed securities.  This
     facility tends to carry lower interest rates and also allows the Company
     to better utilize its warehousing lines.  Borrowings outstanding under
     this facility totaled $25.04 million at June 30, 1999.

     In the first three months in fiscal year 2000, the Company repurchased in
     open market transactions 44,500 shares of its common stock at an aggregate
     cost of $183,000.

     The Company had stockholders' equity of $29.77 million at June 30, 1999.
     Management believes that its current financing arrangements are adequate
     to meet its projected operational needs.


DISCLOSURE ABOUT MARKET RISK

    The Company manages many risks in its normal course of business, however,
     the management considers interest rate risk to be the most significant
     market risk which could materially impact its financial position and
     results of operations. The movements in interest rates affect the value of
     capitalized mortgage servicing rights, the mortgage inventory held for
     sale, volume of loan production and total net interest income earned.

     The Company has been managing this risk by striving to balance its loan
     origination and loan servicing segments, which generally are counter
     cyclical in nature. In an environment of raising interest rates, loan
     production will slow down, but the drop in origination income is mitigated
     by decrease in the loan prepayment rate in its servicing portfolio and
     hence write-offs, amortization and impairment charges against income will
     fall. Conversely, the opposite scenario is true during a period of
     declining interest rates. The overall objective is to offset changes in
     the values of the following items arising from fluctuations in interest
     rates, such as the production pipeline, mortgage loan inventory, mortgage-
     backed securities held for sale and capitalized mortgage servicing rights.
     The Company does not speculate on the direction or movement of the
     interest rates.

     Based on the information available and the interest environment as of June
     30, 1999, the Company believes that a 50 basis point change in long-term
     interest rates over a twelve month period, up or down and all else being
     constant, would increase or decrease the Company's gross income by
     approximately $2 million dollars. These estimates are limited by the fact
     that they are performed at a particular point in time and do not
     incorporate many other factors and, consequently, should not be relied on
     as a forecast of actual results.


YEAR 2000 ISSUES

     Many companies will face serious information problems because their
     software programs written in the past may not properly recognize calendar
     dates beginning in the year 2000. Since the Company utilizes various
     vendors and interfaces with numerous financial institutions in conducting
     its business, the Company is exposed to the risk that its own systems and
     systems of vendors and institutions may not be Year 2000 compliant.
     Failure to adequately address these challenges could have an adverse
     impact on the operations of the Company.

<PAGE>

     The Company has adopted its Year 2000 Plan to prepare its entire computer
     systems to properly calculate dates beyond December 31, 1999. Service
     bureaus responsible for maintaining the Company's Loan Administration
     System and Accounting System were contacted and upgrades for Year 2000
     have been received and installed. The Company is also taking steps to
     ensure that the vendors and institutions that it utilizes are also taking
     necessary steps to be Year 2000 compliant.

     Additionally, the Company decided to enroll in the Mortgage Bankers
     Association (`MBA') Year 2000 Readiness Test. Through this extensive inter-
     industry testing over a ninety-day period, the Company has gained valuable
     information of its systems and of the various communication hardware and
     interface pieces. The Company has passed the MBA Year 2000 Readiness Test.

     The estimated total pre-tax cost of the Year 2000 Plan, including new
     hardware and software modifications, will be approximately $150,000, of
     which $130,000 has been incurred through June 30, 1999.

     The Company has developed contingency plans including identifying
     alternative processing platforms and outsourcing certain critical
     functions. The Company believes that all its systems will be Year 2000
     compliant prior to December 31, 1999, however there can be no assurance
     that its warehouse lenders, depository institutions, custodians, business
     partners and vendors can resolve their own Year 2000 issues in a timely
     manner. Neither can the Company be assured that any failure by these other
     parties would not have an adverse impact on the Company's operations and
     financial condition.


PROSPECTIVE TRENDS

     Early in the fiscal quarter ended June 30, 1999, long term interest rates
     began to move steadily upwards from the new levels which prevailed during
     most of last fiscal year.  Each move up eliminated more loans eligible for
     refinancing and since the majority of our production was in refinance
     loans, our new loan production began to fall accordingly.  Compared to
     last year, in April 1999 our originations fell 33.5%, in May 39.9% and in
     June 67.4%, a cumulative total reduction of 47.8% for the entire quarter.
     Mortgage interest rates have continued to increase, and we therefore
     expect even larger reductions in new loan production compared to last
     year.  Operating results will be adversely affected over the near future.

     Some perspective is in order though.  The production numbers being
     reported for this fiscal year are being compared against year-earlier
     numbers, and those numbers were all-time records for the Company and the
     industry.  It appears that loan production is now returning to fiscal 1997
     levels, a more typical type of year for the industry.

     This can all turn around of course, should interest rates retreat from
     levels many observers think are unsubstainably high for this economy.  Be
     that as it may, we have taken several steps to prepare for the higher
     interest rates now prevailing in the market.  Our employee staff has been
     reduced by 25%, and our commission compensation is falling along with the
     reduction in production.

     We are refocusing emphasis to our retail branch production channel, which
     is more heavily directed towards loans for the purchase of housing rather
     than refinancing.  We've also just opened an internet website structured
     towards potential borrowers for purchase financing.  Our direct marketing
     channel has been re-tooled to home equity loans and traditional cash-out
     refinancing, instead of the previous concentration on interest rate
     reduction refinance loans.

     The Company has entered into an exclusive loan sale partnership with a
     west coast bank which will give us a very competitive menu of conventional
     loan products to $750,000.  We've also entered into correspondent
     agreements with a thrift institution and two Real Estate Investment Trusts
     which specialize in adjustable rate (ARM) loans.  This is important
     because in a higher interest rate environment ARM loans become attractive
     to consumers, and we are now well equipped with the ARM products and the
     investors to meet any such demand.

<PAGE>

     We believe we are taking the right steps to operate effectively in the
     current environment, but the volume of available mortgage production is
     always dependent, almost exclusively, on the level of interest rates.  The
     higher rates will definitely hurt us going forward.  Pricing, as we've
     often reported, is also under pressure and is likely to become more
     intense as the pool of available mortgages shrinks with the return of
     higher interest rates.  The combination of higher rates and pricing
     pressures will continue to negatively impact our revenues and profits at
     least through the next quarter, and perhaps longer.
<PAGE>


                         PART II.  OTHER INFORMATION.


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

        (a)  No exhibits are filed with this report.

        (b)  The Company did not file any reports on Form 8-K during the quarter
             ended June 30, 1999.
<PAGE>
                                  SIGNATURES


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


                                         FIRST MORTGAGE CORPORATION




Date:  August 12, 1999                   By S/Clement Ziroli
                                            Clement Ziroli
                                            Chairman of the Board of
                                            Directors,
                                            Chief Executive Officer



Date:  August 12, 1999                   By S/Pac W. Dong
                                            Pac W. Dong
                                            Executive Vice President,
                                            Chief Financial Officer