<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, 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            (I.R.S. Employer
of incorporation or                     Identification No.)
organization)
                                   
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, 1998, 5,569,697 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, 1998 (Unaudited) and March 31, 1998               3

         Unaudited Statement of Income
         Three Months Ended June 30, 1998 and 1997                  4

        Unaudited Statement of Cash Flows
         Three Months Ended June 30, 1998 and 1997                  5

        Notes to Unaudited Financial Statements                     6-7

Item 2. Management's Discussion and Analysis of Financial Condition 8-10
         and Results of Operations                            


Part II - Other Information

Item 6. Exhibits and Reports on Form 8-K                            10

Signatures                                                          11

<PAGE>
PART I.  FINANCIAL INFORMATION

Item 1.   Financial Statements
<TABLE>

FIRST MORTGAGE CORPORATION

BALANCE SHEET
<CAPTION>

                                   
                                                        June 30, 1998        March 31, 1998
                                                        (Unaudited)    
<S>                                                     <C>                  <C>
ASSETS
Cash                                                     $ 2,152,000         $ 8,182,000
Mortgage loans held for sale                              69,744,000          53,052,000
Other receivables and servicing advances                  10,979,000          10,566,000
Capitalized servicing rights, net                          8,598,000           7,490,000
Property and equipment, net                                  680,000             664,000
Prepaid expenses and other assets                            125,000             361,000
Notes receivable                                             130,000             130,000
                                                        
TOTAL ASSETS                                             $92,408,000         $80,445,000
                                                        
LIABILITIES AND STOCKHOLDERS' EQUITY
                                                        
LIABILITIES:                                            
   Notes payable, banks                                  $45,895,000         $40,427,000
   Sight drafts payable                                   14,868,000           9,372,000
   Deferred income taxes                                   2,350,000           2,259,000
   Accounts payable and accrued liabilities                1,742,000           1,392,000
   Income Taxes Payable                                      477,000                   -
                                                        
      Total Liabilities                                   65,332,000          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                       3,888,000           4,963,000
      Issued and outstanding shares-5,569,697 at June 30,
      1998 and 5,808,697 at March 31, 1998
   Retained earnings                                      23,188,000          22,032,000
                                                        
         Total Stockholders' Equity                       27,076,000          26,995,000
                                                        
TOTAL LIABILITIES AND STOCKHOLDERS'                     
   EQUITY                                                $92,408,000         $80,445,000
                                                        

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

UNAUDITED STATEMENT OF INCOME
<TABLE>
<CAPTION>
                                                 Three Months Ended
                                                      June 30
                                                1998            1997
<S>                                             <C>             <C>
REVENUES:
   Loan origination income                      $1,111,000      $  704,000
   Loan servicing income                         1,924,000       1,856,000
   Gain on sale of mortgage loans                3,653,000       1,340,000
   Interest income                               1,031,000         537,000
                                                           
      Total revenues                             7,719,000       4,437,000
                                                           
EXPENSES:
   Compensation and benefits                     2,418,000       1,988,000
   General and administrative expenses           2,190,000       1,273,000
   Amortization of capitalized servicing rights    871,000         546,000
   Interest expense                                259,000         172,000
                                                            
      Total expenses                             5,738,000       3,979,000
                                                           
INCOME BEFORE INCOME TAXES                       1,981,000         458,000
                                                           
INCOME TAX EXPENSE                                 825,000         194,000
                                                           
NET INCOME                                      $1,156,000      $  264,000
                                                           
BASIC EARNINGS PER SHARE                        $     0.20      $     0.05
                                                           
DILUTED EARNINGS PER SHARE                      $     0.20      $     0.05
                                                           
See accompanying notes                                     
                                   
</TABLE>
                                   
<PAGE>
FIRST MORTGAGE CORPORATION
UNAUDITED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
                                               Three Months Ended
                                                    June 30
                                               1998        1997
  <S>                                                            <C>                  <C>
  CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                                  $   1,156,000        $   264,000
     Adjustments to reconcile net income to net cash
        provided by operating activities:
     Provision for deferred income taxes                                91,000            (64,000)
     Provision for losses on foreclosure                                67,000             (3,000)
     Amortization of capitalized servicing rights                      871,000            546,000
     Depreciation and amortization of property and equipment            64,000             49,000
     Change in excess service fee                                       16,000             25,000
     Originations and purchases of mortgage loans
        held for sale                                             (223,069,000)       (86,798,000)
     Sales and principal repayments of mortgage loans
        held for sale                                              206,377,000         89,102,000
     Change in other receivables and servicing advances               (480,000)        (1,389,000)
     Change in prepaid expenses and other assets                       236,000            247,000
     Change in accounts payable and accrued liabilities                350,000           (113,000)
     Change in income taxes payable                                    477,000                  -
  Net cash provided by (used in) operating activities              (13,844,000)         1,866,000
  
  CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of mortgage servicing rights                                   -           (214,000)
     Originated mortgage servicing rights                           (1,995,000)          (416,000)
     Purchase of furniture, equipment and leasehold improvements       (80,000)           (41,000)
     Change in due from affiliates                                           -            134,000
  Net cash used in investing activities                             (2,075,000)          (537,000)
  
  CASH FLOWS FROM FINANCING ACTIVITIES:
     Change in notes payable, banks                                  5,468,000            224,000
     Change in sight drafts payable                                  5,496,000           (755,000)
     Change in notes payable, officer                                        -         (1,500,000)
     Repurchase of common stock                                     (1,075,000)                 -
  Net cash provided by (used in) financing activities                9,889,000         (2,031,000)
  
  DECREASE IN CASH                                                  (6,030,000)          (702,000)
  
  CASH, BEGINNING OF PERIOD                                          8,182,000          5,903,000
  
  CASH, END OF PERIOD                                               $2,152,000         $5,201,000
  
  SUPPLEMENTAL CASH FLOW INFORMATION:
     Cash paid during the period for:
        Interest                                                     $ 211,000           $139,000
        Income taxes                                                         -                  -
  
  See accompanying notes
  </TABLE>
  
  
<PAGE>
FIRST MORTGAGE CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
June 30, 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                         1,995,000
   Amortizations and write offs       (887,000)
   Impairment                                -
Balance at June 30, 1998            $8,598,000
</TABLE>

3.  NOTES PAYABLE

    At  June  30, 1998, the Company had line of credit agreements  with
    two  nonaffiliated  banks,  which provided  for  borrowings  up  to
    $70,000,000 and $30,000,000 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,
    1998,   borrowings   under   these  lines   of   $45,895,000   were
    collateralized by mortgage loans held for sale.

    The  line  of credit agreements are subject to renewal on September
    1, 1998 and August 31, 1998, 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 June 30
                                                   1998        1997
<S>                                                <C>          <C>
Numerator:                                                 
Net income                                         $1,156,000    $264,000
                                                                     
Denominator:                                                         
Shares used in computing basic earnings per share   5,747,411   5,859,117
Effect of stock options treated as equivalents               
  under the treasury stock method                         451           -
Denominator for diluted earnings per share          5,747,862   5,859,117
Basic earnings per share                                 $.20        $.05
Diluted earnings per share                               $.20        $.05
</TABLE>

5.  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


RESULTS OF OPERATIONS:

Three  months ended June 30, 1998 compared to three months  ended  June
30, 1997.


GENERAL

     The  Company  reported net income of $1.16 million  or  $0.20  per
     share  for the quarter ended June 30, 1998, compared to net income
     of  $264,000  or $0.05 per share for the comparable 1997  quarter.
     The  increase in net income was attributable to two major reasons:
     a  favorable  interest  rates environment  during  the  June  1998
     quarter;  combined  with  a  substantial  increase  in  new   loan
     originations over the year earlier period.


REVENUES

     LOAN ORIGINATION INCOME
     For  the  quarter ended June 30, 1998, the volume of new  mortgage
     loans  closed increased 157% to $223.1 million from $86.8  million
     in the prior year quarter.

     For  the three months ended June 30, 1998 loan origination revenue
     increased by approximately 57.8% to $1.1 million from $704,000  in
     the  June  1997 quarter, due primarily to the increased  new  loan
     originations.

     LOAN SERVICING INCOME
     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 3.7% to $1.92 million  for
     the  three months ended June 30, 1998 from $1.86 million  for  the
     same  period in 1997.  The increase was primarily due to  slightly
     higher average servicing and miscellaneous fees.

     As  of June 30, 1998, the Company serviced $1.663 billion in loans
     compared  to $1.705 billion at June 30, 1997, a decrease  of  2.5%
     after  prepayments and scheduled amortization of  mortgage  loans.
     The  drop in the servicing portfolio was attributable to the lower
     interest  rate  environment  in  June  1998  quarter  causing  the
     acceleration of the portfolio run-off rate.

<PAGE>
     The  following table sets forth certain information pertaining  to
     the servicing portfolio of the Company for the period indicated.
<TABLE>
<CAPTION>
                                                   Three Months Ended June 30,
                                                   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                   223,069        86,798
                   Purchase of Servicing                    -         6,652
             Less: Prepayment and Amortization        222,541        71,218
                                                      
          Ending loan servicing portfolio           1,570,671     1,606,069
             Sub-Servicing                             92,584        98,577
          Total servicing portfolio                $1,663,255    $1,704,646
          Average loan balance (end of period)     $   95,321    $   96,482
          Weighted Average Interest Rate                 7.87%         7.98%
</TABLE>

     GAIN ON SALE OF MORTGAGE LOANS
     In   spite  of  intense  price  competition,  favorable  long-term
     mortgage interest rates during the quarter resulted in a  gain  on
     sale of mortgage loans of $3.65 million for the three months ended
     June 30, 1998, compared to $1.34 million over the 1997 period.

     INTEREST INCOME
     Interest  income, which reflects the interest received on mortgage
     loans  held  for sale, increased to $1.03  million for  the  three
     months ended June 30, 1998 from $537,000 for the comparable  prior
     year  quarter.   This  increase is due  primarily  to  the  larger
     mortgage  inventory carried by the Company during  the  June  1998
     quarter.


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 expense.  Total expenses for the three months ended
     June  30, 1998 increased by 44.2% to $5.74 million from the  three
     months ended June 30, 1997.  Compensation and benefits were  $2.42
     million  for the June 1998 quarter, an increase of 21.6% over  the
     year-ago quarter.  The increase was due primarily to the increased
     commissions  and  the hiring of new personnel resulting  from  the
     large   increase   in   new   loan  originations.    General   and
     administrative expense increased by $917,000 over the  prior  year
     period,  primarily  as  a  direct result of  expanding  production
     operations in the quarter.

     Amortization of capitalized servicing rights increased by $325,000
     over  the comparable prior year period due mainly to the Company's
     larger  investment in mortgage servicing rights and  substantially
     higher volume of prepayment over the year ago quarter.

     INTEREST EXPENSE
     Interest  expense  increased 50.6% to $259,000 for  quarter  ended
     June 1998 from $172,000 for the same period in 1997.  The increase
     was  due to larger warehouse borrowings during the quarter because
     of the increased new loan production.


<PAGE>
     
PROSPECTIVE TRENDS
     
     The  reduction  in long-term interest rates is having  a  positive
     impact  on new loan originations, especially refinance loans,  for
     the  Company.   The volume of new loan applications in  June,  for
     example,  were  the  highest  in Company's  history.   Barring  an
     unexpected  increase  in interest rates,  the  surge  in  activity
     should continue to produce improved results for the Company in the
     second fiscal quarter.

     As   previously  discussed  in  the  Prospective  Trends  and  the
     Competition  sections of the 10K for the fiscal year  ended  March
     31,  1998,  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,  home  equity loans and other mortgage products  with  much
     greater profit potential for the Company.  We recently introduced,
     for  example, a streamline conventional refinance loan program  to
     complement our FHA streamline refinance program.  We believe  this
     will  result  in  a substantial increase in new loan  originations
     through our direct marketing channel.

     As a continuing part of the Company's long-term plan, we will open
     additional  retail origination offices wherever  such  opportunity
     presents itself.

     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 long-term interest rates.


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 June 30, 1998, maximum permitted borrowings under the warehouse
     line  of  credit agreements with two nonaffiliated  banks  totaled
     $100  million  and  the  amount  outstanding  was  $45.9  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  June  30,  1998.   The  Company believes  that  the  warehouse
     agreements will be renewed when the current terms expire in August
     and September 1998.

     During the quarter ended June 30, 1998, the Company repurchased in
     open market transactions of 239,000 shares of its common stock  at
     an aggregate cost of $1,075,000.

     The Company had stockholders' equity of $27.08 million at June 30,
     1998.  Management believes that its current financing arrangements
     are  adequate  to  meet its projected operational needs,  however,
     increases  in  the  existing  facilities  or  other  supplementary
     sources  may  have  to  be explored should the  market  conditions
     improve and loan origination volume increases.

                                   
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, 1997 and the quarter ended June 30,
             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:  August 5, 1998                By S/Clement Ziroli
                                        Clement Ziroli
                                        Chairman of the Board of Directors,
                                        Chief Executive Officer
                                     
                                     
                                     
Date:  August 5, 1998                By S/Pac W. Dong
                                        Pac W. Dong
                                        Chief Financial Officer,
                                        Controller and Executive Vice
                                        President