<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 
          September 30, 1997

                                  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 September 30, 1997, 5,859,117 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                                             3
         September 30, 1997(Unaudited) and March 31, 1997

        Unaudited Statements of Income
         Three Months and Six Months Ended September 30, 1997
         and 1996                                                 4

        Unaudited Statements of Cash Flows
         Six Months Ended September 30, 1997 and 1996             5

        Notes to Unaudited Financial Statements                 6-7

Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations                               8-11


Part II - Other Information

Item 6. Exhibits and Reports on Form 8-K                         12

Signatures                                                       13

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

                      FIRST MORTGAGE CORPORATION
                                   
                             BALANCE SHEET
<CAPTION>
                                   
                                        September 30, 1997  March 31, 1997
                                        (Unaudited)       
<S>                                    <C>                 <C>                     
ASSETS                                                  
Cash                                    $2,214,000          $5,903,000
Mortgage loans held for sale            34,865,000          27,286,000
Other receivables and servicing         
 advances                                9,384,000           9,623,000
Capitalized servicing rights             7,268,000           6,709,000
Property and equipment, net                593,000             592,000
Prepaid expenses and other assets          353,000             546,000
Due from affiliates                              -             134,000
Note receivable                            130,000             130,000
                                                        
TOTAL ASSETS                           $54,807,000         $50,923,000
                                                        
LIABILITIES AND STOCKHOLDERS'                           
   EQUITY
                                                        
LIABILITIES:                                            
   Notes payable, banks                $23,027,000         $20,172,000
   Note payable, officer                         -           1,500,000
   Sight drafts payable                  2,496,000             954,000
   Accounts payable and accrued  
    liabilities                            928,000             816,000
   Deferred income taxes                 1,957,000           1,833,000
                                                        
      Total Liabilities                 28,408,000          25,275,000
                                                      
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
      - 5,859,117                        5,147,000           5,147,000
   Retained earnings                    21,252,000          20,501,000
                                                        
         Total Stockholders' Equity     26,399,000          25,648,000
                                                        
TOTAL LIABILITIES AND STOCKHOLDERS'                     
   EQUITY                               $54,807,000         $50,923,000
</TABLE>                                                

<PAGE>
<TABLE>
                      FIRST MORTGAGE CORPORATION
                                   
                    UNAUDITED STATEMENTS OF INCOME
                                   
                                   
<CAPTION>
                                   
                                       Three Months Ended       Six Months Ended
                                       September 30,            September 30,
                                       1997         1996        1997         1996
<S>                                    <C>          <C>         <C>          <C>
REVENUES:                                                                 
   Loan origination income              $808,000     $944,000   $1,512,000   $1,675,000
   Loan servicing income               1,873,000    1,778,000    3,729,000    3,492,000
   Gain on sale of mortgage loans      1,858,000    1,631,000    3,198,000    2,545,000
   Interest income                       626,000      559,000    1,163,000    1,186,000
   Other income                                -        1,000            -        2,000
                                                                          
         Total revenues                5,165,000    4,913,000    9,602,000    8,900,000
                                                                          
EXPENSES:
   Compensation and benefits           2,065,000    2,127,000    4,053,000    3,965,000
   General and admnistrative expenses  2,078,000    1,886,000    3,897,000    3,635,000
   Interest expense                      183,000      216,000      355,000      410,000
                                                                          
         Total expenses                4,326,000    4,229,000    8,305,000    8,010,000
                                                                          
INCOME BEFORE INCOME TAXES               839,000      684,000    1,297,000      890,000
                                                                          
INCOME TAX EXPENSE                       352,000      287,000      546,000      376,000
                                                                          
NET INCOME                              $487,000     $397,000     $751,000     $514,000
                                                                          
NET INCOME PER SHARE                    $   0.08     $   0.07      $  0.13      $  0.09
                                                                          
WEIGHTED AVERAGE OF COMMON                                                  
AND COMMON EQUIVALENT                                                     
SHARES OUTSTANDING                     5,859,000    5,892,000    5,859,000    5,892,000
</TABLE>

<PAGE>
<TABLE>
                      FIRST MORTGAGE CORPORATION
                  UNAUDITED STATEMENTS OF CASH FLOWS
<CAPTION>
                                                                 Six Months Ended
                                                                 September 30,
                                                              1997            1996
<S>                                                           <C>             <C>
  CASH FLOWS FROM OPERATING ACTIVITIES:                       
     Net income                                                 $  751,000      $  514,000
     Adjustments to reconcile net income to net cash
        provided by (used in) operating activities:
     Provision for deferred income taxes                           124,000         264,000
     Provision for losses on foreclosure                          (183,000)        277,000
     Amortization of capitalized servicing rights                1,189,000         720,000
     Depreciation and amortization of property and equipment       100,000          97,000
     Originations and purchases of mortgage loans
        held for sale                                         (200,344,000)   (171,997,000)
     Sales and principal repayments of mortgage loans
        held for sale                                          192,765,000     174,540,000
     Changes in other receivables and servicing advances           422,000      (1,660,000)
     Change in prepaid expenses and other assets                   193,000          92,000
     Change in accounts payable and accrued liabilities            112,000         (48,000)
  
  Net cash provided by (used in) operating activities           (4,871,000)      2,799,000
  
  CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of mortgage servicing rights                        (401,000)       (189,000)
     Origination of mortgage servicing rights                   (1,347,000)     (1,913,000)
     Change in note receivable                                           -        (500,000)
     Sale of commercial paper                                            -       9,955,000
     Purchase furniture, equipment and leasehold improvements     (101,000)       (105,000)
     Change in due from affiliates                                 134,000          60,000
  
  Net cash provided by (used in) investing activities           (1,715,000)      7,308,000
  
  CASH FLOWS FROM FINANCING ACTIVITIES:
     Change in notes payable, banks                              2,855,000     (10,093,000)
     Change in sight drafts payable                              1,542,000      (1,783,000)
     Change in notes payable, officer                           (1,500,000)              -
  
  Net cash provided by (used in) financing activities            2,897,000     (11,876,000)
                                   
  DECREASE IN CASH                                              (3,689,000)     (1,769,000)
  
  CASH, BEGINNING OF PERIOD                                      5,903,000       5,948,000
  
  CASH, END OF PERIOD                                           $2,214,000      $4,179,000
  
  SUPPLEMENTAL CASH FLOW INFORMATION:
     Cash paid during the period for:
        Interest                                                $  264,000      $  205,000
        Income taxes                                               225,000          30,000
</TABLE>
<PAGE>
                      FIRST MORTGAGE CORPORATION
                NOTES TO UNAUDITED FINANCIAL STATEMENTS
                          September 30, 1997

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, 1997.

    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

    In  June  1996,  the  Financial Accounting Standards  Board  (FASB)
    issued  Statement  of  Financial  Accounting  Standards  No.   125,
    Accounting  for  Transfers and Servicing of  Financial  Assets  and
    Extinguishments of Liabilities (FAS 125).  FAS 125 will  result  in
    the recording of Capitalized Servicing Rights (CSRs) on the date of
    sale  of  a  mortgage loan as opposed to the previous  practice  of
    recording  CSRs  on  the date loans are originated.   Additionally,
    under  FAS  125,  excess servicing fees is  included  in  CSRs  for
    balance  sheet presentation.  Activities in CSRs are summarized  as
    follows:
<TABLE>
<CAPTION>
                                Capitalized
                                 Servicing
                                   Rights
<S>                              <C>
Balance at March 31, 1997        $6,709,000
   Additions                      1,748,000
   Amortizations and write offs  (1,176,000)
   Impairment                       (13,000)
                      
Balance at September 30, 1997    $7,268,000
</TABLE>

3.  NOTES PAYABLE

    At  September  30, 1997, the Company had line of credit  agreements
    with  two nonaffiliated banks, which provided for borrowings up  to
    $40,000,000 and $15,000,000 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
    September  30,  1997, borrowings under these lines  of  $23,027,000
    were collateralized by mortgage loans held for sale.

    The  line  of credit agreements are subject to renewal on September
    1,  1998  and  November  30, 1997, 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.  NET INCOME PER SHARE
    
    Net  income  per  share is computed on the basis  of  the  weighted
    average number of common shares outstanding during each period plus
    the  effect  of  common  shares contingently  issuable  from  stock
    options in period in which they have a dilutive effect.


5.  RECENT ACCOUNTING PRONOUNCEMENT

    In  February 1997, the FASB issued Statement No. 128, Earnings  Per
    Share  (FAS  128),  which  simplifies the standards  for  computing
    earnings  per share (EPS) and replaces the presentation of  primary
    EPS  with  a presentation of basic EPS.  The Company believes  that
    the  adoption  of  FAS  128 in fiscal year 1998  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


RESULTS OF OPERATIONS:

Three  months  ended September 30, 1997 compared to three months  ended
September 30, 1996.


GENERAL

     First  Mortgage reported net income of $487,000 or $0.08 per share
     for  the quarter ended September 30, 1997, compared to net  income
     of  $397,000  or $0.07 per share for the comparable 1996  quarter.
     The increase of 22.7% in net income was primarily attributable  to
     larger  gains  on  mortgage sales as interest  rates  became  more
     favorable;  and  to  higher  servicing  income  as  the   mortgage
     servicing  portfolio  grows; and also to an increase  in  interest
     income  due  to  stronger  loan production.   The  improvement  in
     earnings  was,  however, offset partially by greater  general  and
     administrative expenses from start-up cost of production offices.


REVENUES

     LOAN ORIGINATION INCOME
     For  the  quarter  ended September 30, 1997,  the  volume  of  new
     mortgage  loans closed increased by 42.1% to $113.55 million  from
     $79.90  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 September 30, 1997, loan  origination
     revenue  decreased  by approximately 14.4% to  $808,000  from  the
     September  1996  quarter, due primarily to the  higher  volume  of
     wholesale loan, which carry lower front-end origination fees.

     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 5.3% to $1.87 million  for
     the  three months ended September 30, 1997 from $1.78 million  for
     the same period in 1996.  The increase resulted from growth in the
     Company's servicing portfolio.

     As  of  September 30, 1997, the Company serviced $1.71 billion  in
     loans compared to $1.63 billion at September 30, 1996, a net  gain
     of  4.9%  after prepayments and scheduled amortization of mortgage
     loans.   The  growth  in  the  servicing  portfolio  reflects  the
     Company's  long-term plan of retaining the servicing rights  on  a
     portion of new loan originations.
<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
                                              September 30,
                                              1997           1996
                                             (Dollars in thousands
                                              except average loan balance)
          <S>                                 <C>            <C>
          Beginning loan service portfolio    $1,606,069     $1,508,765
          
          Add: Loans originated                  113,546         79,902
                                                      
          Less:  Prepayment and amortization     105,673         55,066
                                                      
          Ending loan servicing portfolio      1,613,942      1,533,601
          Sub-Servicing                           98,167         97,964
          Total servicing portfolio           $1,712,109     $1,631,565
          Average loan balance (end of period)  $ 96,631      $  95,631
</TABLE>

     GAIN ON SALE OF MORTGAGE LOANS
     Due  to  a  favorable trend in long-term mortgage  interest  rates
     during  the quarter, the gain on sale of mortgage loans was  $1.86
     million for the three months ended September 30, 1997, an increase
     of 13.9% over the 1996 period.

     INTEREST INCOME
     Interest  income, which reflects the interest received on mortgage
     loans  held  for sale, increased to $626,000 for the three  months
     ended  September  30, 1997 from $559,000 for the comparable  prior
     year  quarter.   This  increase was due primarily  to  the  larger
     mortgage  inventory  carried by the Company during  the  September
     1997 quarter.


EXPENSES

     The  major  components  of the Company's total  expenses  are  (i)
     compensations   and  benefits,  (ii)  general  and  administrative
     expenses and (iii) interest expense.  Total expenses for the three
     months ended September 30, 1997 increased by 2.3% to $4.33 million
     from the three months ended September 30, 1996.  Compensations and
     benefits  were  $2.07 million for the September  1997  quarter,  a
     decrease   of  2.9%  over  the  year-ago  quarter.   General   and
     administrative expense increased by $192,000, or 10.2% 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.

     INTEREST EXPENSE
     Interest  expense  decreased 15.3% to $183,000 for  quarter  ended
     September  1997 from $216,000 for the same period  in  1996.   The
     decrease was due to an increase in use of working capital for loan
     fundings.

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

RESULTS OF OPERATIONS:

Six  months  ended  September 30, 1997 compared  to  six  months  ended
September 30, 1996.


GENERAL

     In  the  six months ended September 30, 1997, the Company reported
     net  income of $751,000 or $0.13 per share, compared to net income
     of  $514,000  or  $0.09  per share for the same  period  of  1996.
     Total  revenue increased by 7.9% to $9.6 million from $8.9 million
     in  the  year earlier six months.  The increase in net income  was
     largely due to higher loan servicing income and a greater gain  on
     sale  of  mortgage loans for the six month period as  compared  to
     1996.


REVENUES

     For  the  six  months ended September 30, 1997,  loan  origination
     revenue  decreased  9.7% to $1.51 million from $1.68  million  for
     the   six  months  ended  September  30,  1996.   The  lower  loan
     origination  revenue  was largely due to a  higher  proportion  of
     wholesale  loans,  which  carry much lower  front-end  origination
     revenue than retail loans.

     The  volume of new mortgage loan originations increased  16.5%  to
     $200.34  million  from  $171.99 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 6.8% to $3.73  million
     for  the  six  months ended September 30, 1997 from $3.49  million
     for  the  same  period  in  1996 after prepayments  and  scheduled
     amortization of mortgage loans.
<TABLE>

     The  following table sets forth certain information pertaining  to
     the servicing portfolio of the Company for the period indicated:
<CAPTION>
                                                  Six Months Ended September 30,
                                                  1997           1996
                                                  (Dollars in thousands
                                                  except average loan balance)
          <S>                                     <C>            <C>
          Beginning loan service portfolio        $1,583,837     $1,477,161
          Add: Loans originated                      200,344        171,997
                                                      
          Less:  Prepayment and amortization         170,239        115,557
                                                      
          Ending loan servicing portfolio          1,613,942      1,533,601
          Sub-Servicing                               98,167         97,964
          Total servicing portfolio               $1,712,109     $1,631,565
          Average loan balance (end of period)       $96,631        $95,631

</TABLE>

     The  sale of mortgages for the six months ended September 30, 1997
     resulted  in a gain of $3.20 million compared to a gain  of  $2.55
     million  for  the 1996 period.  The gain is primarily attributable
     to the favorable trend in long-term interest rates in 1997.

     Interest  income, which reflects the interest earned  on  mortgage
     loans  held for sale for the six months ended September  30,  1997
     was comparable to the 1996 period.
<PAGE>


EXPENSES

     The  major  components  of the Company's total  expenses  are  (i)
     compensation   and  benefits,  (ii)  general  and   administrative
     expenses and (iii) interest expenses.  Total expenses for the  six
     months  ended  September 30, 1997 increased by  $295,000  or  3.7%
     from  the  six months ended September 30, 1996.  Compensation  and
     benefits  remained essentially flat at $4.05 million  compared  to
     $3.97  million  in  the  first six months  of  fiscal  year  1996.
     General  and  administrative expenses increased by 7.2%  to  $3.90
     million  from  the  comparable period in 1996.  The  increase  was
     partly  attributable to ongoing implementation of  our  production
     expansion plan with the opening of new retail branches.

     Interest  expense decreased to 13.4% to $355,000  as  compared  to
     $410,000  in the year earlier 6 months, due primarily to increased
     usage of working capital for funding mortgage loans.


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  September  30,  1997, maximum permitted borrowings  under  the
     warehouse  line of credit agreements with two nonaffiliated  banks
     totaled $55 million and the amount outstanding was $23.03 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  September  30, 1997.  The Company believes that the  warehouse
     agreements will be renewed when the current terms expire.

     The  Company  had  stockholders'  equity  of  $26.40  million   at
     September   30,  1997.   Management  believes  that  its   current
     financing   arrangements  are  adequate  to  meet  its   projected
     operational needs.


PROSPECTIVE TRENDS
     
     Between  June 1997 and September 1997, long-term mortgage interest
     rates fell approximately 1/4%, contributing to a 31% increase in new
     loan  originations over the immediate preceding quarter ended June
     30, 1997; and 42% more than the year earlier period.  Unless long-
     term  interest rates unexpectedly increase, the surge in  activity
     should  help  produce  positive  results  for  the  Company  going
     forward.

     Pricing   of  traditional  mortgage  products,  however,   remains
     uneconomical and as previously discussed, 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 125%  second
     mortgage  equity  loan  which is being originated  through  direct
     consumer mailing, telemarketing, and our traditional retail branch
     operations.  Initially to be sold servicing-released, we intend to
     later securitize and retain servicing on this increasingly popular
     new mortgage product.

     As  a  continuing  part of the Company's long-term  plan,  we  are
     opening   additional  retail  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 interest rates.
<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 September 30, 1997.
<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:  November 8, 1997              By  S/Clement Ziroli
                                         Clement Ziroli
                                         Chairman of the Board of Directors,
                                         Chief Executive Officer
                                     
                                     
                                     
Date:  November 8, 1997              By  S/Pac W. Dong
                                         Pac W. Dong
                                         Executive Vice President,
                                         Chief Financial Officer