<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 December 31, 1998

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 December 31, 1998, 5,355,197 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 Sheets
December 31, 1998 (Unaudited) and March 31, 1998                 3

Unaudited Statements of Income
Three Months and Nine Months Ended December 31, 1998 and 1997    4

Unaudited Statements of Cash Flows
Nine Months Ended December 31, 1998 and 1997                     5         

Notes to Unaudited Financial Statements                          6-7

Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations                                        8-13


Part II - Other Information

Item 6. Exhibits and Reports on Form 8-K                         14

Signatures                                                       15


<PAGE>
PART I.  FINANCIAL INFORMATION
Item 1.   Financial Statements
<TABLE>

FIRST MORTGAGE CORPORATION

BALANCE SHEETS
<CAPTION>

                                       December 31, 1998   March 31, 1998
                                       (Unaudited)      
<S>                                    <C>                 <C>
ASSETS
Cash                                    $8,873,000          $8,182,000
Mortgage loans held for sale            60,202,000          53,052,000
Other receivables and servicing         
   advances                              7,746,000          10,566,000
Capitalized servicing rights            11,368,000           7,490,000
Property and equipment, net                672,000             664,000
Prepaid income taxes                       413,000                   -
Prepaid expenses and other assets          116,000             361,000
Note receivable                            130,000             130,000
                                                        
TOTAL ASSETS                           $89,520,000         $80,445,000
                                                        
LIABILITIES AND STOCKHOLDERS'                           
   EQUITY
                                                        
LIABILITIES:                                            
   Notes payable, banks                $41,801,000         $40,427,000
   Sight drafts payable                 12,177,000           9,372,000
   Accounts payable and accrued          2,812,000           1,392,000
      liabilities
   Deferred income taxes                 3,537,000           2,259,000
                                                        
      Total Liabilities                 60,327,000          53,450,000
                                                        
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                     
         - 5,355,197 at                  2,956,000           4,963,000
         December 31, 1998 and
         5,808,697 at March 31, 1998
   Retained earnings                    26,237,000          22,032,000
                                                        
         Total Stockholders' Equity     29,193,000          26,995,000
                                                        
TOTAL LIABILITIES AND STOCKHOLDERS'                     
   EQUITY                              $89,520,000         $80,445,000
</TABLE>                                                
[FN]
<F1>
See accompanying notes
</FN>
<PAGE>
<TABLE>
FIRST MORTGAGE CORPORATION

UNAUDITED STATEMENTS OF INCOME


<CAPTION>
                                                Three Months Ended             Nine Months Ended
                                                December 31,                   December 31,
                                                1998           1997            1998         1997
<S>                                             <C>            <C>             <C>          <C>
REVENUES:
   Loan origination income                        $958,000       $716,000      $3,058,000   $2,228,000
   Loan servicing income                         1,954,000      1,959,000       5,835,000    5,688,000
   Gain on sale of mortgage loans                5,455,000      2,186,000      13,915,000    5,384,000
   Interest income                               1,072,000        661,000       3,038,000    1,824,000
                                                                          
         Total revenues                          9,439,000       5,522,000     25,846,000   15,124,000
                                                                          
EXPENSES:
   Compensation and benefits                     3,072,000       2,022,000      8,075,000    6,075,000
   General and administrative expenses           2,144,000       1,637,000      6,778,000    4,393,000
   Amortization of capitalized servicing rights  1,118,000         776,000      2,818,000    1,917,000
   Interest expense                                468,000         180,000        993,000      535,000
                                                                          
         Total expenses                          6,802,000       4,615,000     18,664,000   12,920,000
                                                                          
INCOME BEFORE INCOME TAXES                       2,637,000         907,000      7,182,000    2,204,000
                                                                          
INCOME TAX EXPENSE                               1,092,000         380,000      2,977,000      926,000
                                                                          
NET INCOME                                      $1,545,000        $527,000     $4,205,000   $1,278,000
                                                                          
Basic and Diluted Earnings Per Share                 $0.29           $0.09          $0.76        $0.22
                                                                          
                                        
</TABLE>
[FN]
<F1>
See accompanying notes
</FN>
<PAGE>
<TABLE>
FIRST MORTGAGE CORPORATION
UNAUDITED STATEMENTS OF CASH FLOWS
<CAPTION>
                                                                  Nine Months Ended
                                                                  December 31,
                                                                  1998              1997
<S>                                                               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                                     $4,205,000        $1,278,000
     Adjustments to reconcile net income to net cash
        provided by operating activities:
     Provision for deferred income taxes                             1,278,000           311,000
     Provision for losses on foreclosure                              (217,000)         (490,000)
     Amortization of capitalized servicing rights                    2,818,000         1,917,000
     Depreciation and amortization of property and equipment           197,000           159,000
     Changes in excess service fee                                      58,000            72,000
     Originations and purchases of mortgage loans held for sale   (696,031,000)     (315,330,000)
     Sales and principal repayments of mortgage loans
        held for sale                                              688,881,000       305,736,000
     Changes in other receivables and servicing advances             3,037,000           326,000
     Change in prepaid expenses and other assets                       245,000           167,000
     Change in accounts payable and accrued liabilities              1,420,000            (2,000)
     Change in prepaid income taxes                                   (413,000)                -
  
        Net cash provided by (used in) operating activities          5,478,000        (5,856,000)
  
CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of mortgage servicing rights                             (23,000)         (605,000)
     Origination of mortgage servicing rights                       (6,731,000)       (2,412,000)
     Purchase of property and equipment                               (205,000)         (224,000)
     Change in due to affiliates                                             -           134,000
  
        Net cash used in investing activities                       (6,959,000)       (3,107,000)
  
CASH FLOWS FROM FINANCING ACTIVITIES:
     Change in notes payable, banks                                  1,374,000        11,461,000
     Change in sight drafts payable                                  2,805,000          (613,000)
     Change in note payable, officer                                         -        (1,500,000)
     Repurchase of common stock                                     (2,007,000)          (80,000)
  
        Net cash provided by financing activities                    2,172,000         9,268,000
                                        
INCREASE IN CASH                                                       691,000           305,000
CASH, BEGINNING OF PERIOD                                            8,182,000         5,903,000
CASH, END OF PERIOD                                                 $8,873,000        $6,208,000
                                                          
  
SUPPLEMENTAL CASH FLOW INFORMATION:
     Cash paid during the period for:
        Interest                                                    $  714,000        $  406,000
        Income taxes                                                 1,850,000           455,000
</TABLE>
[FN]
<F1>
See accompanying notes
</FN>
<PAGE>
FIRST MORTGAGE CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
December 31, 1998

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, 1998.

    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

    Activities in capitalized servicing rights are summarized as follows:
<TABLE>
<CAPTION>

                                Capitalized
                                Servicing
                                Rights
<S>                             <C>
Balance at March 31, 1998        $7,490,000
   Additions                      6,754,000
   Amortizations and write offs  (2,876,000)
                      
Balance at December 31, 1998    $11,368,000
                      
</TABLE>

3.  NOTES PAYABLE

    At December 31, 1998, 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% to 1.40% or the
    bank's reference rate, depending on the level of borrowings and the
    compensating balances maintained.  At December 31, 1998, borrowings under
    these lines of $41,801,000 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.

<PAGE>
4.  EARNINGS PER SHARE
<TABLE>

   The following table sets forth the computation of basic and diluted earnings
   per share:
<CAPTION>

                                                      Three Months ended       Nine Months ended
                                                      December 31              December 31
                                                      1998         1997        1998        1997
<S>                                                   <C>          <C>         <C>         <C>
Numerator:                                                       
   Net income                                         $1,545,000    $527,000   $4,205,000  $1,278,000
                                                                         
Denominator:                                                             
   Shares used in computing basic earnings per share   5,357,529   5,849,450    5,557,524   5,855,883
   Effect of stock options treated as equivalents
     under the treasury stock method                         729           -        9,378           -
Denominator for diluted earnings per share             5,358,258   5,849,450    5,566,902   5,855,883
Basic earnings per share                                    $.29        $.09         $.76        $.22
Diluted earnings per share                                  $.29        $.09         $.76        $.22
</TABLE>


5.  NEW ACCOUNTING PRONOUNCEMENTS
    
    In June 1998, the Financial Accounting Standards Board issued Statement of
    Financial Accounting Standards No. 133, "Accounting for Derivative
    Instruments and Hedging Activities", ("SFAS 133").  It requires that an
    entity recognize all derivatives as either assets or liabilities in the
    statement of financial position and measure those instruments at fair value.
    SFAS 133 is required to be adopted by first quarter of fiscal year 2001.
    The Company believes that the adoption of SFAS 133 will not have a material
    impact on its financial statements.
    
    In October 1998, the Financial Accounting Standards Board issued Statement
    of Financial Accounting Standards No. 134, "Accounting for Mortgage-Backed
    Securities Retained after the Securitization of Mortgage Loans Held for Sale
    by a Mortgage Banking Enterprise", ("SFAS 134").  This Statement requires
    that after the securitization of mortgage loans held for sale, an entity
    engaged in mortgage banking activities classify the resulting mortgage-
    backed securities and other retained interest based on its ability and
    intent to sell or hold those instruments.  The Company will adopt SFAS 134
    in the fourth quarter of fiscal year 1999.  The Company believes that the
    adoption of SFAS 134 will not have a material impact on the financial
    statements.
    
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 December 31, 1998 compared to three months ended December 31,
1997.


GENERAL

     First Mortgage reported net income of $1.545 million or $0.29 per share for
     the quarter ended December 31, 1998, compared to net income of $527,000 or
     $0.09 per share for the comparable 1997 quarter.  The increase of 193.2% in
     net income was attributable to substantial larger gains on mortgage sales;
     stronger loan origination revenues and increase in interest income.  The
     improvement in earnings was, however, offset partially by higher
     compensation; general and administrative expenses and amortization of
     capitalized servicing rights.


REVENUES

     For the quarter ended December 31, 1998, the volume of new mortgage loans
     closed increased by 128.3% to $262.52 million from $114.99 million in the
     prior year quarter.  The increase is a reflection of lower long-term
     interest rates, which significantly increased the volume of refinancing
     loans in the market place, and the robust recovery of the California real
     estate market.

     For the three months ended December 31, 1998, loan origination revenue
     increased by approximately 33.8% to $958,000 from the December 1997
     quarter, due primarily to a higher volume of retail loans, which carry
     higher front-end origination fees.

     As of December 31, 1998, the Company serviced $1.643 billion in loans
     compared to $1.702 billion at December 31, 1997, a decrease of 3.5%
     compared to the year-ago quarter.  The run-off in the servicing portfolio
     was due to heavy refinances induced by the current low interest rate
     environment.  Total loan servicing income, including late charges and other
     miscellaneous fees, declined marginally by 0.3% to $1.94 million in the
     December 1998 quarter, from $1.96 million of 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
                                    December 31
                                    1998           1997
                                    (Dollars in thousands
                                    except average loan
                                    balance)
<S>                                 <C>            <C>
Beginning loan service portfolio    $1,573,950     $1,613,942
          
Add: Loans originated                  262,522        114,987
                                                      
Less: Prepayment and amortization      278,259        117,418
                                                      
Ending loan servicing porfolio       1,558,213      1,611,511
Sub-Servicing                           84,836         90,196
Total servicing portfolio           $1,643,049     $1,701,707
Average loan balance (end of period)  $ 92,954      $  95,963

</TABLE>

     Due to a very favorable reduction in long-term mortgage interest rates
     during the quarter, the gain on sale of mortgage loans was $5.46 million
     for the three months ended December 31, 1998, an increase of 149.5% over
     the 1997 period.

     Interest income, which reflects the interest received on mortgage loans
     held for sale, increased to $1.07 million for the three months ended
     December 31, 1998 from $661,000 for the comparable prior year quarter.
     This increase was due primarily to the larger mortgage inventory carried by
     the Company during the December 1998 quarter, partially offset by lower
     interest rate.


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 December 31, 1998 increased by 47.4% to $6.8
     million from the three months ended December 31, 1997.  Compensations and
     benefits were $3.07 million for the December 1998 quarter, an increase of
     51.9% over the year-ago quarter.  General and administrative expense
     increased by $507,000, or 31% over prior year.  These higher expenses were
     a direct result of expanding production operations in the quarter,
     partially offset by cost reduction measures taken by the Company over the
     past year.

     Amortization of capitalized servicing rights increased by 44.1% 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 160% to $468,000 for quarter ended December 31,
     1998 from $180,000 for the same period in 1997.  The increase was due to
     the larger volume of loans originated during the quarter.


<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS



RESULTS OF OPERATIONS:

Nine months ended December 31, 1998 compared to nine months ended December 31,
1997


GENERAL

     In the nine months ended December 31, 1998, the Company reported net
     income of $4.21 million or $0.76 per share, compared to net income of
     $1.28 million or $0.22 per share for the same period of 1997.  Total
     revenue increased by 70.9% to $25.85 million from $15.12 million in the
     comparable prior period.  The increase in net income was due to higher
     loan origination income and a larger gain on sale of mortgage loans for
     the nine month period as compared to last year.


REVENUES

     For the nine months ended December 31, 1998, loan origination revenue
     increased 37.3% to $3.06 million from $2.23 million for the nine months
     ended December 31, 1997.  The higher loan origination revenue was
     primarily due to the larger volume of new loans originated by the Company.

     The volume of new mortgage loan originations increased 120.7% to $696.03
     million from $315.33 million in the comparable period last year.

     Loan servicing income, representing the loan servicing fees, late charges
     and other fees earned by the Company for administering the loans in its
     servicing portfolio, rose 2.6% to $5.84 million for the nine months ended
     December 31, 1998 from $5.69 million for the same period in 1997.  The
     slight increase in servicing income is primarily due to the larger number
     of FHA and VA loans currently serviced by the Company, which typically
     carry a higher net service fees than conventional loans.

     The following table sets forth certain information pertaining to the
     servicing portfolio of the Company for the period indicated:
<TABLE>
<CAPTION>

                                    Nine Months Ended December 31,
                                    1998           1997
                                    (Dollars in thousands
                                    except average loan
                                    balance)
<S>                                 <C>            <C>
Beginning loan service portfolio    $1,570,143     $1,583,837
Add: Loans originated                  696,031        315,330
                                                      
Less: Prepayment and amortization      707,961        287,656
                                                      
Ending loan servicing portfolio      1,558,213      1,611,511
Sub-Servicing                           84,836         90,196
Total servicing portfolio           $1,643,049     $1,701,707
Average loan balance (end of period)   $92,954        $95,693

</TABLE>

     The sale of mortgages for the nine months ended December 31, 1998 resulted
     in a gain of $13.92 million compared to a gain of $5.38 million for the
     1997 period.  The gain is primarily attributable to the higher volume of
     loan originations coupled with the favorable trend in long-term interest
     rates in 1998.

<PAGE>
     Interest income, which reflects the interest earned on mortgage loans held
     for sale for the nine months ended December 31, 1998 was $3.04 million, an
     increase of 66.6% over the comparable 1997 period.  The increase was as a
     result of the higher volume of loans originated in the 1998 period,
     partially offset by lower interest rate.


EXPENSES

     The major components of the Company's total expenses are (i) compensation
     and benefits, (ii) general and administrative expenses, (iii) amortization
     of capitalized servicing rights, and (iv) interest expenses.  Total
     expenses for the nine months ended December 31, 1998 increased by $5.74
     million or 44.5% from the nine months ended December 31, 1997.
     Compensation and benefits increased 32.9% to $8.08 million compared to
     $6.08 million in the first nine months of fiscal year 1997.  General and
     administrative expenses increased by 54.3% to $6.78 million from the
     comparable period in 1997.  The increases in these expenses were a direct
     result of expansion in loan originations and direct marketing effort in
     fiscal year 1999.

     Increase in amortization of capitalized servicing rights was mainly due to
     larger investment in servicing rights and higher volume of loan
     prepayments over prior period.

     Interest expense increased 85.6% to $993,000 as compared to $535,000 in
     the year earlier nine months, due primarily to the larger volume of loans
     originated during the period.


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, its own
     capital, and also cash flows from operations.

     At December 31, 1998, maximum permitted borrowings under the warehouse line
     of credit agreements with two nonaffiliated banks totaled $105 million and
     the amount outstanding was $41.8 million.  Borrowings under these
     facilities are secured by mortgage loans.  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 December 31, 1998.  The Company believes that the
     warehouse agreements will be renewed when the current terms expire.

     In the first nine months in fiscal year 1999, the Company repurchased in
     open market transactions 453,500 shares of its common stock at an aggregate
     cost of $2,007,000.

     The Company had stockholders' equity of $29.11 million at December 31,
     1998.  Management believes that its current financing arrangements are
     adequate to meet its projected operational needs.


<PAGE>



DISCLOSURE ABOUT MARKET RISK

     The Company's earnings can be impacted significantly by the movement of
     interest rates, which is the primary component of the market risk to the
     Company.  The interest rate risk affects value of the capitalized mortgage
     servicing rights, volume of loan production and total net interest income
     earned on its mortgage inventory. 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.  The overall objective is
     to offset changes in the values of the following items, such as the
     committed pipeline, mortgage loan inventory, mortgage-backed securities
     held for sale and 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
     December 31, 1998, the Company believes that a 100 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 $1.5 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 used as
     forecast.


YEAR 2000 ISSUES

     The Company's computing environment consists of one IBM AS/400 and other
     personal computers connected to a Local Area Network.  The IBM AS/400 is
     the primary platform for the Loan Servicing Department processing.  Other
     departments, including loan processing, loan funding and accounting, are
     serviced mainly by personal computers. Software for loan funding, loan
     administration and accounting are maintained by outside service bureaus.
     These service bureaus have been contacted  by the Company and the Company
     has received system upgrades and assurances from a majority of the software
     vendors that year 2000 compliance can be achieved by June 30, 1999.
     
     Additionally, the Company has enrolled in the Mortgage Bankers Association
     Year 2000 Readiness Test, and many of the Company's software providers are
     also participating.  Other institutions involved in the project include
     GNMA, FNMA and FHLMC.  Through this extensive inter-industry testing
     beginning in February 1999, the Company will try to ensure all the various
     communication hardware and interface pieces will work together smoothly.
     
     A majority of the software and applications currently used by the Company
     are not in-house developed programs.  The Company believes that it will
     receive year 2000 upgrades from the software vendors, from whom the
     programs were purchased, in a timely manner.  The Company, however, cannot
     be assured that these third party service providers will not have business
     interruptions or other problems which could have an adverse impact on the
     Company.  Presently, the Company has a contractual agreement with IBM to
     provide `hot site' backup for the loan servicing system, however, it does
     not have a comprehensive contingency plan to handle the worst case
     scenarios.  The Company is in the process of developing such a plan that
     will include identifying alternative processing platforms and systems for
     all year 2000 compliant related problems.
     
     The Company has made and will continue to make investments to identify and
     modify any programs and systems that are not yet year 2000 compliant.
     These costs are being expensed by the Company during the period in which
     they are incurred.  Based on preliminary information, the Company does not
     anticipate that the expenses related to achieving year 2000 compliance will
     have a material impact on the Company's results of operations.
     


<PAGE>
     


PROSPECTIVE TRENDS
     
     During the first nine months of fiscal 1999 long-term mortgage interest
     rates fell to the lowest levels in the last 25 years, contributing to a
     120.7% increase in new loan originations over the year earlier period ended
     December 31, 1997.  Unless long-term interest rates unexpectedly increase,
     the surge in activity should continue to  help produce positive results for
     the Company going forward.

     Pricing of many traditional mortgage products, however, remains
     uneconomical and the Company still faces intense competition from many
     directions, particularly for the standard conforming conventional mortgage
     loans so coveted by many of the major commercial banks.  Our strategy is to
     instead emphasize the origination of FHA and VA loans and other mortgage
     products with greater profit potential for the Company.

     As a continuing part of the Company's long-term plan, we are opening
     additional retail offices wherever such opportunity presents itself.
     During this fiscal year we have already opened new offices in West Los
     Angeles, California and Las Vegas, Nevada.

     We believe we are appropriately positioned to take advantage of the market
     niches within which we can competitively operate, but we still face
     formidable competition and, as always, our business is greatly influenced
     by the level of interest rates.  Refinance loans are now the biggest part
     of our new loan originations, and should interest rates unexpectedly
     increase, our results would be negatively impacted.


<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 December 31, 1998.
<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:  February 10, 1999                  By  S/Clement Ziroli
                                              Clement Ziroli
                                              Chairman of the
                                              Board of Directors,
                                              Chief Executive Officer
                                          
                                          
                                          
Date:  February 10, 1999                  
                                          
                                          By  S/Pac W. Dong
                                              Pac W. Dong
                                              Executive Vice President,
                                              Chief Financial Officer