<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, 1999

                                  or

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


                    Commission File Number 0-19847


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



         California                              95-2960716
(State or other jurisdiction                  (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 December 31, 1999, 5,270,897 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
           December 31, 1999 (Unaudited) and March 31, 1999       3

        Unaudited Statement of Operations
           Three Months and Nine Months Ended December 31,
           1999 and 1998                                          4

        Unaudited Statement of Cash Flows
           Nine Months Ended December 31, 1999 and 1998           5

        Notes to Unaudited Financial Statements                  6-7

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

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

FIRST MORTGAGE CORPORATION
<TABLE>

BALANCE SHEET
<CAPTION>

                                          December 31,       March 31,
                                          1999               1999
                                         (Unaudited)
<S>                                      <C>                 <C>
ASSETS
Cash                                     $12,217,000         $14,839,000
Mortgage loans and mortgage-backed
securities held for sale                  65,061,000          45,463,000
Other receivables and servicing
advances                                   4,935,000           7,378,000
Capitalized servicing rights, net         12,619,000          12,475,000
Property and equipment, net                  611,000             761,000
Prepaid expenses and other assets          2,226,000             765,000

TOTAL ASSETS                             $97,669,000         $81,681,000

LIABILITIES AND STOCKHOLDERS'
EQUITY

LIABILITIES:
   Notes payable, banks                  $17,592,000         $35,469,000
   Note payable, other                    44,368,000                   -
   Sight drafts payable                       58,000           9,450,000
   Accounts payable and accrued
   liabilities                               943,000           2,967,000
   Deferred income taxes                   5,476,000           4,065,000

      Total Liabilities                   68,437,000          51,951,000

STOCKHOLDERS' EQUITY
   Preferred stock, no par value:
      Authorized shares - 1,000,000
      Issued and outstanding shares
      - None                                       -                   -
   Common stock, no par value:
      Authorized shares - 10,000
      Issued and outstanding shares
      - 5,270,897 at December 31, 1999
      and 5,347,197  at March 31, 1999    2,613,000            2,924,000
   Retained earnings                     26,619,000           26,806,000

         Total Stockholders' Equity      29,232,000           29,730,000

TOTAL LIABILITIES AND STOCKHOLDERS'
   EQUITY                               $97,669,000          $81,681,000

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

UNAUDITED STATEMENT OF OPERATIONS

<CAPTION>
                                                           Three Months Ended        Nine Months Ended
                                                           December 31,              December 31,
                                                           1999         1998         1999         1998
<S>                                                        <C>          <C>         <C>          <C>
REVENUES:
   Loan origination income                                  $395,000     $958,000   $1,799,000   $3,058,000
   Loan servicing income                                   1,950,000    1,954,000    5,823,000    5,835,000
   Gain on sale of mortgage loans                             13,000    5,455,000    2,664,000   13,915,000
   Interest income                                         1,305,000    1,072,000    3,613,000    3,038,000
   Other Income                                                7,000            -       11,000            -

         Total revenues                                     3,670,000   9,439,000   13,910,000   25,846,000

EXPENSES:
   Compensation and benefits                                1,392,000   3,072,000    5,365,000    8,075,000
   General and Administrative expenses                        937,000   2,144,000    3,830,000    6,778,000
   Amortization of capitalized servicing rights             1,041,000   1,118,000    3,434,000    2,818,000
   Interest expense                                           697,000     468,000    1,592,000      993,000

         Total expenses                                     4,067,000   6,802,000   14,221,000   18,664,000

INCOME (LOSS) BEFORE INCOME TAXES                            (397,000)  2,637,000     (311,000)   7,182,000

INCOME TAX (BENEFITS)                                        (163,000)  1,092,000     (124,000)   2,977,000

NET INCOME (LOSS)                                           $(234,000)  1,545,000     (187,000)   4,205,000


BASIC AND DILUTED EARNINGS (LOSS) PER SHARE                   $ (0.04)     $ 0.29      $ (0.04)     $  0.76



</TABLE>
See accompanying notes

<PAGE>

FIRST MORTGAGE CORPORATION
<TABLE>
UNAUDITED STATEMENT OF CASH FLOWS
<CAPTION>
                                                               Nine Months Ended
                                                               December 31,
                                                               1999             1998
<S>                                                            <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                        $(187,000)      $4,205,000
Adjustments to reconcile net income to net
 cash provided by (used in) operating activities:
Provision for deferred income taxes                                1,411,000       1,278,000
Provision for losses on foreclosure                                 (325,000)       (217,000)
Amortization of capitalized servicing rights                       3,434,000       2,818,000
Depreciation and amortization of property and equipment              196,000         197,000
Change in excess service fee                                          27,000          58,000
Loss on sale of assets                                                19,000               -
Originations and purchases of mortgage loans held for sale      (216,824,000)   (696,031,000)
Sales and principal repayments of mortgage loans held for sale   197,226,000     688,881,000
Change in other receivables and servicing advances                 2,768,000       3,037,000
Change in prepaid expenses and other assets                       (1,461,000)        245,000
Change in accounts payable and accrued liabilities                (2,024,000)      1,420,000
Change in income taxes payable                                             -        (413,000)

Net cash provided by (used in) operating activities              (15,740,000)      5,478,000

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of mortgage servicing rights                               (518,000)        (23,000)
Originated mortgage servicing rights                              (3,087,000)     (6,731,000)
Purchase of furniture, equipment and leasehold improvements          (79,000)       (205,000)
Proceeds from sale of assets                                          14,000               -

Net cash used in investing activities                             (3,670,000)     (6,959,000)

CASH FLOWS FROM FINANCING ACTIVITIES:
Change in notes payable, banks                                   (17,877,000)      1,374,000)
Change in sight drafts payable                                    (9,392,000)      2,805,000
Change in note payable, other                                     44,368,000               -
Repurchase of common stock                                          (311,000)     (2,007,000)

Net cash provided by financing activities                         16,788,000       2,172,000

INCREASE (DECREASE) IN CASH                                       (2,622,000)        691,000

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

CASH, END OF PERIOD                                              $12,217,000      $8,873,000

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
 Interest                                                         $1,274,000        $714,000
 Income taxes                                                              -       1,850,000
</TABLE>
See accompanying notes

<PAGE>
FIRST MORTGAGE CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
December 31, 1999

1.  BASIS OF PRESENTATION

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

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


2.  CAPITALIZED SERVICING RIGHTS

    Activities in capitalized servicing rights are summarized as
    follows:
<TABLE>
<CAPTION>
                                Nine Months ended
                                December 31
                                1999             1998
<S>                             <C>              <C>
Beginning balance               $12,475,000      $ 7,490,000
   Additions                      3,605,000        6,754,000
   Amortizations and write offs  (3,461,000)      (2,876,000)

Ending balance                  $12,619,000      $11,368,000


</TABLE>


3.  NOTES PAYABLE

    At December 31, 1999, the Company had mortgage loan warehousing
    agreements with two nonaffiliated banks, which provided for
    borrowings up to $50,000,000 and $35,000,000 with annual interest
    payable monthly at 1.25% or the bank's reference rate, depending on
    the level of borrowings and the compensating balances maintained.
    At December 31, 1999, borrowings under these lines of $17.59
    million were collateralized by mortgage loans and mortgage-backed
    securities held for sale.

    The mortgage loan warehousing agreements are subject to renewal on
    August 31, 2000, and both 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 warehousing agreements will be renewed prior to their
    expiration.

   In addition to the warehousing agreements, the Company makes use of
   the short-term reverse repurchase agreements provided by two
   investment banking firms in connection with its inventory of
   mortgage-backed securities.  These facilities tend to carry lower
   interest rates and also allow the Company to better utilize its
   warehousing lines when mortgage production increases.  Borrowings
   outstanding under these facilities totaled $44.37 million at
   December 31, 1999 and were collateralized by GNMA mortgage-backed
   securities.

<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
                                                      December 31,              Ended December 31,
                                                       1999       1998          1999       1998
<S>                                                    <C>        <C>           <C>        <C>
Numerator:
 Net income                                            $(234,000) $1,545,000    $(187,000) $4,205,000

Denominator:
 Shares used in computing basic earnings per share     5,270,897   5,357,529    5,296,130   5,557,524
 Effect of stock options treated as
  equivalents under the treasury stock method                  -         729        6,358       9,378
Denominator for diluted earnings per share             5,270,897   5,358,258    5,302,488   5,566,902
Basic earnings per share                                   $(.04)       $.29        $(.04)       $.76
Diluted earnings per share                                 $(.04)       $.29        $(.04)       $.76

</TABLE>
5.  NEW ACCOUNTING PRONOUNCEMENTS

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



6.  CONTINGENCIES

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


FORWARD LOOKING STATEMENTS

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


RESULTS OF OPERATIONS:

Three months ended December 31, 1999 compared to three months ended
December 31, 1998.


GENERAL

     First Mortgage reported a net loss of $234,000 or ($0.04) per
     share for the quarter ended December 31, 1999, compared to net
     income of $1.545 million or $0.29 per share for the comparable
     1998 quarter.  The loss was attributable to substantial increases
     in interest rates which dramatically reduced new loan originations
     for us and throughout the industry.  In turn, this led to steep
     reductions in loan origination and gain on sale of mortgage
     revenues, two of the primary sources of revenue for the Company.
     The reduction in earnings was, however, offset partially by lower
     compensation; general and administrative expenses and amortization
     of capitalized servicing rights.


REVENUES

     For the quarter ended December 31, 1999, the volume of new
     mortgage loans closed decreased by 83.5% to $43.33 million from
     $262.52 million in the prior year quarter.  The decrease is a
     direct reflection of higher long-term interest rates, which
     significantly reduced the volume of loans in the market place,
     particularly refinance loans, upon which much of last year's
     business was based.

     For the three months ended December 31, 1999, loan origination
     revenue decreased by approximately 58.8% to $395,000 from the
     December 1998 quarter, due primarily to the decline in mortgage
     production.

     As of December 31, 1999, the Company serviced $1.543 billion in
     loans compared to $1.643 billion at December 31, 1998, a decrease
     of 6.1% compared to the year-ago quarter.  The run-off in the
     Company's own servicing portfolio was due to heavy refinances
     during the first half of calendar 1999, prior to the increase in
     interest rates.  Total loan servicing income, including late
     charges and other miscellaneous fees, declined marginally to
     $1.950 million in the December 1999 quarter, from $1.954 million
     in the prior year quarter.

<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 December 31
                                       1999           1998
                                       (Dollars in thousands except average loan balance)
<S>                                    <C>            <C>
Beginning loan service portfolio       $1,559,165     $1,573,950

Add: Loans originated                      43,331        262,522

Less: Prepayment and amortization          67,492        278,259

Ending loan servicing portfolio         1,535,004      1,558,213
Sub-Servicing                               7,657         84,836
Total servicing portfolio              $1,542,661     $1,643,049
Average loan balance (end of period)     $ 91,045      $  92,954

</TABLE>

     The Company's sub-servicing portfolio experienced a drop of about
     $69 million in the December 1999 quarter due to one of the
     Company's sub-servicing clients sold its entire servicing
     portfolio, and the new purchaser did not require any sub-
     servicing.  The net revenue impact on the Company, however, is
     quite insignificant.

     Due to the higher long-term mortgage interest rates during the
     quarter and the reduction in new loan production, the gain on sale
     of mortgage loans was virtually eliminated for the three months
     ended December 31, 1999, as compared to $5.44 million over the
     1998 period.

     Interest income increased to $1.31 million for the three months
     ended December 31, 1999 from $1.07 million for the comparable
     prior year quarter.  This increase was due primarily to the larger
     mortgage inventory and mortgage-backed securities carried by the
     Company during the December 1999 quarter.


EXPENSES

     The major components of the Company's total expenses are (i)
     compensations and benefits, (ii) general and administrative
     expenses, (iii) amortization of capitalized servicing rights, and
     (iv) interest expense.  Total expenses for the three months ended
     December 31, 1999 decreased by 40.2% to $4.07 million from the
     $6.80 million for the three months ended December 31, 1998.
     Compensations and benefits were $1.39 million for the December
     1999 quarter, a decrease of 54.7% over the year-ago quarter.
     General and administrative expense decreased by $1.21 million, or
     56.3% over prior year.  These lower expenses were a direct result
     of reduced production operations in the quarter, along with cost
     reduction measures taken by the Company during the quarter.

     Amortization of capitalized servicing rights decreased by 6.9%
     over prior year quarter due mainly to the reduction of prepayments
     from refinances over the comparable prior period.

     Interest expense increased 48.9% to $697,000 for quarter ended
     December 31, 1999 from $468,000 for the same period in 1998.  The
     increase was due to the larger mortgage inventory and mortgage-
     backed securities carried during the quarter.

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



RESULTS OF OPERATIONS:

Nine months ended December 31, 1999 compared to nine months ended
December 31, 1998.


GENERAL

     In the nine months ended December 31, 1999, the Company reported
     a net loss of $187,000 or ($0.04) per share, compared to net
     income of $4.21 million or $0.76 per share for the same period of
     1998.  Total revenue decreased by 46.2% to $13.91 million from
     $25.85 million in the comparable prior period.  The decrease in
     net income was due to substantial increases in interest rates
     over the course of the year, which dramatically reduced new loan
     originations for us and throughout the industry.  In turn, this
     led to steep reductions in loan origination and gain on sale of
     mortgage revenues, two of the primary sources of revenue for the
     Company.  The reduction in earnings was, however, offset
     partially by lower compensation; general and administrative
     expenses and amortization of capitalized servicing rights.


REVENUES

     For the nine months ended December 31, 1999, loan origination
     revenue decreased 41.2% to $1.80 million from $3.06 million for
     the nine months ended December 31, 1998.  The lower loan
     origination revenue was primarily due to the lower volume of new
     loans originated by the Company.

     The volume of new mortgage loan originations decreased 68.8% to
     $216.82 million from $696.03 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, fell 0.2% to $5.82 million
     for the nine months ended December 31, 1999 from $5.84 million
     for the same period in 1998.  The slight decrease in servicing
     income is primarily due to the lower volume of loans currently
     serviced by the Company.

     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,
                                       1999           1998
                                       (Dollars in thousands except average loan balance)
<S>                                   <C>            <C>
Beginning loan service portfolio      $1,527,507     $1,570,143
Add: Loans originated                    216,824        696,031

Less: Prepayment and amortization        209,327        707,961

Ending loan servicing portfolio        1,535,004      1,558,213
Sub-Servicing                              7,657         84,836
Total servicing portfolio             $1,542,661     $1,643,049
Average loan balance (end of period)     $91,045        $92,954

</TABLE>


<PAGE>


     The Company's sub-servicing portfolio experienced a drop of about
     $69 million in the December 1999 quarter due to one of the
     Company's sub-servicing clients sold its entire servicing
     portfolio, and the new purchaser did not require any sub-
     servicing.

     The sale of mortgages for the nine months ended December 31, 1999
     resulted in a gain of $2.66 million compared to a gain of $13.92
     million for the 1998 period.  The decrease is primarily
     attributable to the lower volume of loan originations coupled
     with the unfavorable trend in long-term interest rates in 1999.

     Interest income increased to $3.61 million, an increase of 18.9%
     over the comparable 1998 period.  The increase was as a result of
     the larger mortgage inventory and mortgage-backed securities
     carried by the Company in the 1999 period.


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, 1999 decreased by $4.44 million or 23.8% from the
     nine months ended December 31, 1998.  Compensation and benefits
     decreased 33.6% to $5.37 million compared to $8.08 million in the
     first nine months of fiscal year 1998.  General and
     administrative expenses decreased by 43.5% to $3.83 million from
     $6.78 million in the comparable period in 1998.  The decreases in
     these expenses were a direct result of reduction in loan
     originations and cost cutting measures taken by the Company
     during the year.

     The increase in amortization of capitalized servicing rights was
     mainly due to larger investment in servicing rights and higher
     volume of loan prepayments over last fiscal year.

     Interest expense increased 60.3% to $1.59 million as compared to
     $993,000 in the year earlier nine months, due primarily to higher
     interest rates and the larger mortgage inventory and mortgage-
     backed securities carried by the Company 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, reverse repurchase agreements, its own capital and also
     cash flows from operations.

     At December 31, 1999, maximum permitted borrowings under the
     warehouse line of credit agreements with two nonaffiliated banks
     totaled $85 million and the amount outstanding was $17.59 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, 1999.  The Company believes that the warehouse
     agreements will be renewed when the current terms expire.

     In addition to warehousing agreements, the Company makes use of
     the reverse repurchase agreements offered by two investment firms
     in connection with its mortgage-backed securities.  Borrowings
     under these facilities totaled $44.37 million at December 31,
     1999.

     In the first nine months in fiscal year 2000, the Company
     repurchased in open market transactions 76,300 shares of its
     common stock at an aggregate cost of $311,000.

<PAGE>
     The Company had stockholders' equity of $29.23 million at December
     31, 1999.  Management believes that its current financing
     arrangements are adequate to meet its projected operational needs.


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, 1999, 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 net income by approximately $2.0 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 has experienced very few problems after its systems
     and programs were converted into the new millennium on midnight
     December 31, 1999.  The Company, however, will continue to invest
     and monitor all the hardware and software to ensure smooth
     uninterrupted operations.

     The estimated total pre-tax cost of the Year 2000 Plan, including
     upgrades for hardware and software, was approximately $200,000, of
     which $190,000 has been incurred through December 31, 1999.


PROSPECTIVE TRENDS

     During the second and third quarters of fiscal 2000, long-term
     mortgage interest rates began to rise to the highest levels of the
     past two years, reversing the trend which produced all time
     results for the Company during fiscal 1999.  The increase in
     interest rates has practically eliminated the demand for refinance
     loans, particularly the popular 30 year fixed-rate loan, upon
     which the majority of our business is based.  The industry is
     widely reporting new loan volume decreases of 50% or more, with
     ours off even more at a 70% decrease year-to-date compared to the
     record volume of last year.  We were particularly impacted because
     of the larger percentage of refinance loans we were doing last
     year, which were very profitable for the Company.

     Now we are once again faced with too much industry capacity for
     the present volume, and too many lenders chasing too few loans.
     Pricing pressures on many traditional mortgage products is even
     more severe and remains uneconomical, and the Company 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 better profit margin 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.  The retail channel is focused on loan production
     for the purchase of housing rather than refinance loans, and thus
     is a viable alternative to the direct marketing channel, which is
     nearly all refinance driven.

<PAGE>

     We had a serious set-back to our retail plan when four of our
     retail office managers left the Company to pursue greener
     pastures, but we are recovering with the opening of new retail
     production offices in Phoenix, Arizona, Sacramento and Long Beach,
     California.  We are also in negotiations to open several others in
     the near future.

     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.  Should long-
     term interest rates remain at these higher levels, it isn't likely
     that operating results will improve at any time in the near
     future.


<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, 1999.
<PAGE>
SIGNATURES


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


                                     FIRST MORTGAGE CORPORATION




Date:  February 10, 2000             By S/Clement Ziroli
                                        Clement Ziroli
                                        Chairman of the Board of Directors,
                                        Chief Executive Officer



Date:  February 10, 2000             By S/Pac W. Dong
                                        Pac W. Dong
                                        Executive Vice President,
                                        Chief Financial Officer