<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, 1996

or

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


Commission File Number 0-19847


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



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





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

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



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

YES  X                       NO____

As of December 31, 1996, 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 Sheets
          December 31, 1996 (Unaudited) and March 31, 1996                 3

         Unaudited Statements of Income
          Three Months and Nine Months Ended December 31, 1996 and 1995    4

        Unaudited Statements of Cash Flows
          Nine Months Ended December 31, 1996 and 1995                     5

        Notes to Unaudited Financial Statements                          6-7

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


Part II - Other Information

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

Signatures                                                                14


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

FIRST MORTGAGE CORPORATION

BALANCE SHEETS
<CAPTION>
                                 December 31, 1996          March 31, 1996
                                       (Unaudited)         
<S>                                    <C>                 <C>
ASSETS                                                       
Cash                                    $4,646,000          $5,948,000
Mortgage loans held for sale            31,956,000          19,879,000
Investment in commercial paper                   -           9,955,000
Other receivables and servicing          9,646,000           9,545,000
advances                                                      
Originated mortgage servicing            5,193,000           3,133,000
rights, net                                                    
Excess service fee, net                    326,000             414,000
Purchased servicing rights, net            558,000             430,000
Property and equipment, net                654,000             612,000
Prepaid expenses and other assets          362,000             891,000
Due from affiliates                        134,000             194,000
Notes receivable                           630,000             130,000
                                                               
TOTAL ASSETS                           $54,105,000         $51,131,000
                                                        
LIABILITIES AND STOCKHOLDERS'                           
EQUITY
                                                        
LIABILITIES:                                            
   Notes payable, banks                $24,888,000         $20,653,000
   Note payable, officer                 1,500,000           1,500,000
   Sight drafts payable                    354,000           2,699,000
   Accounts payable and accrued            925,000             765,000
   liabilities
   Deferred income taxes                   989,000             867,000
                                                        
      Total Liabilities                 28,656,000          26,484,000
                                                                                     
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 at December 31, 1996                                
      and 5,883,117 at March 31, 1996    5,147,000           5,261,000
      December 31, 1996 and
   Retained earnings                    20,302,000          19,386,000
                                                        
         Total Stockholders' Equity     25,449,000          24,647,000
                                                        
TOTAL LIABILITIES AND STOCKHOLDERS'                     
   EQUITY                              $54,105,000         $51,131,000
See accompanying notes
</TABLE>
<PAGE>
<TABLE>
FIRST MORTGAGE CORPORATION

UNAUDITED STATEMENTS OF INCOME


<CAPTION>

                                Three Months Ended         Nine Months Ended
                                December 31,               December 31,
                                1996         1995          1996          1995
<S>                             <C>          <C>           <C>           <C>
REVENUES:                                                        
   Loan origination income       $991,000     $658,000     $2,666,000    $2,838,000
   Loan servicing income        1,799,000    1,680,000      5,291,000     5,045,000
   Gain on sale of mortgage                                        
     loans                      1,675,000    1,718,000      4,220,000     6,053,000
   Interest income                485,000      553,000      1,671,000     1,607,000
   Other income                         -       10,000          2,000        20,000
                                                                 
         Total revenues         4,950,000    4,619,000     13,850,000    15,563,000
                                                                 
EXPENSES:
   Employees' salaries and                                                              
     commissions                2,165,000    1,836,000      6,130,000     5,788,000
   General and administrative                                                   
     expenses                   1,958,000    1,623,000      5,593,000     4,772,000
   Interest expense               129,000      203,000        539,000       607,000
                                                                 
         Total expenses         4,252,000    3,662,000     12,262,000    11,167,000
                                                                 
INCOME BEFORE INCOME TAXES        698,000      957,000      1,588,000     4,396,000
                                                                 
INCOME TAX EXPENSE                296,000      374,000        672,000     1,827,000
                                                                 
NET INCOME                       $402,000     $583,000       $916,000    $2,569,000
                                                                 
NET INCOME PER SHARE             $   0.07     $   0.10       $   0.16    $     0.44
                                                                 
WEIGHTED AVERAGE OF COMMON                                         
  AND COMMON EQUIVALENT                                            
  SHARES OUTSTANDING            5,886,000    5,883,000      5,886,000     5,883,000

See accompanying notes                                                                 
</TABLE>


<PAGE>
<TABLE>
   FIRST MORTGAGE CORPORATION
  UNAUDITED STATEMENTS OF CASH FLOWS
<CAPTION>
  
                                                                Nine Months Ended
                                                                December 31,
                                                                1996             1995
<S>                                                             <C>              <C>
  CASH FLOWS FROM OPERATING ACTIVITIES:                             
     Net income                                                   $  916,000       $2,569,000
     Adjustments to reconcile net income to net cash              
        provided by operating activities:                          
     Provision for deferred income taxes                             122,000          723,000
     Provision for losses on foreclosure                             102,000          238,000
     Amortization of originated mortgage servicing rights,       
        excess service fee and purchased servicing rights          1,254,000          760,000
     Depreciation and amortization of property and equipment         149,000          156,000
     Originations and purchases of mortgage loans held for sale (274,638,000)    (241,374,000)
     Sales and principal repayments of mortgage loans
        held for sale                                            262,561,000      250,465,000
     Loss on sale of assets                                                -            2,000
     Changes in other receivables and servicing advances            (203,000)        (894,000)
     Change in excess service fee                                          -           (2,000)
     Change in prepaid expenses and other assets                     529,000       (1,326,000)
     Change in accounts payable and accrued liabilities              160,000          509,000
     Change in income taxes payable                                        -        1,100,000
  
        Net cash provided by (used in) operating activities       (9,048,000)      12,926,000
  
  CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of mortgage servicing rights                          (354,000)          (2,000)
     Origination of mortgage servicing rights                     (3,000,000)      (2,817,000)
     Note receivable                                                (500,000)         120,000
     Sale of commercial paper                                      9,955,000                -
     Purchase of furniture and equipment and leasehold 
       improvements                                                 (191,000)         (59,000)
     Proceeds from sale of assets                                          -            4,000
     Change in due to affiliates                                      60,000                -
  
        Net cash provided by (used in) investing activities        5,970,000       (2,754,000)
  
  CASH FLOWS FROM FINANCING ACTIVITIES:
     Change in notes payable, banks                                4,235,000         (231,000)
     Change in sight drafts payable                               (2,345,000)        (128,000)
     Change in notes payable, other                                        -       (9,493,000)
     Repurchase of Common Stock                                     (114,000)               -
  
        Net cash provided by (used in) financing activities        1,776,000       (9,852,000)
  
  INCREASE (DECREASE) IN CASH                                     (1,302,000)         320,000
  CASH, BEGINNING OF PERIOD                                        5,948,000        4,748,000
  CASH, END OF PERIOD                                             $4,646,000       $5,068,000
                                                          
  SUPPLEMENTAL CASH FLOW INFORMATION:
     Cash paid during the period for:
        Interest                                                  $  213,000        $ 535,000
        Income taxes                                                  30,000        1,360,000
See accompanying notes
</TABLE>
  
<PAGE>
FIRST MORTGAGE CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
December 31, 1996

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, 1996.

    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.  MORTGAGE SERVICING ASSETS

    Mortgage servicing assets consist of excess servicing fees, purchased
    servicing rights and originated servicing rights.  Activities in each
    category are summarized as follows:
<TABLE>
<CAPTION>

                                     Excess        Purchased       Originated
                                     Servicing     Servicing       Servicing
                                     Fees, Net     Rights, Net     Rights, Net
    <S>                              <C>           <C>             <C>
    Balance at March 31, 1996        $ 414,000     $   430,000     $  3,133,000
       Additions                             -         354,000        3,000,000
       Amortizations and write offs    (88,000)       (226,000)      (1,015,000)
       Impairment                            -               -           75,000
                                                                                (1)
    Balance at December 31, 1996      $ 326,000     $   558,000     $  5,193,000
<FN>
<F1>

    (1) Figure includes $350,000 of originated servicing rights relating to
    mortgage loans held for sale to investors.  Since the underlying loans have
    not yet been sold, no revenues have been recognized on these originated
    servicing rights for the nine months ended December 31, 1996.
</FN>
</TABLE>

3.  NOTES PAYABLE

    At December 31, 1996, the Company had line of credit agreements with two
    nonaffiliated banks, which provided for borrowings up to $30,000,000 and
    $15,000,000 with 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, 1996, borrowings under these lines of
    $24,888,000 were collateralized by mortgage loans held for sale.

    The line of credit agreements are subject to renewal on September 1, 1997
    and August 31, 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>

    The Company has a presale funding facility with a nonaffiliated investment
    banking firm for borrowings under reverse repurchase arrangements,
    collateralized by mortgage loans held for sale pooled to form GNMA
    securities.  There was no amount outstanding on December 31, 1996.

    The Company also has an unsecured line of credit of $2,000,000 with a
    nonaffiliated bank.  The line was not utilized on December 31, 1996.
    
    
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 periods in which they
    have a dilutive effect.


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 December 31, 1996 compared to three months ended December 31,
1995.


GENERAL

     The Company reported net income of $402,000 or $0.07 per share for the
     quarter ended December 31, 1996, compared to net income of $583,000 or
     $0.10 per share for the comparable 1995 quarter.  The decrease in net
     income was attributable to expenditures due to the expanding of our loan
     production operations and higher foreclosure expenses during the quarter.


REVENUES

     LOAN ORIGINATION INCOME
     For the quarter ended December 31, 1996, the volume of new mortgage loans
     closed increased by 44.9% to $102.64 million from $70.84 million in the
     prior year quarter.  The increase is a reflection of our expansion of loan
     production capabilities over this fiscal year.

     For the three months ended December 31, 1996 loan origination revenue
     increased by 50.6% to $991,000 from the December 1995 quarter, due
     primarily to the higher volume of 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 7.1% to $1.80 million for the three months ended
     December 31, 1996 from $1.68 million for the same period in 1995.  The
     increase resulted from growth in the Company's servicing portfolio.

     As of December 31, 1996, the Company serviced $1.669 billion in loans
     compared to $1.567 billion at December 31, 1995, an increase of 6.5% 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 most 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
                                       December 31,
                                       1996           1995
                                       (Dollars in thousands except average loan balance)
<S>                                    <C>            <C>
Beginning loan service portfolio       $1,533,601     $1,477,951
          
Add: Loans originated                     102,641         70,849
                                                      
Less:     Prepayment and amortization      66,094         62,121
                                                      
Ending loan servicing portfolio         1,570,148      1,486,679

Sub-Servicing                              99,053         80,202

Total servicing portfolio              $1,669,201     $1,566,881

Average loan balance (end of period)     $ 96,519      $  94,402
</TABLE>

     GAIN ON SALE OF MORTGAGE LOANS
     Due to intense price competition during the quarter, the gain on sale of
     mortgage loans was $1.67 million for the three months ended December 31,
     1996, a decrease of 2.5% over the 1995 period.

     INTEREST INCOME
     Interest income, which reflects the interest received on mortgage loans
     held for sale and short-term investment in commercial paper, decreased to
     $485,000 for the three months ended December 31, 1996 from $553,000 for the
     comparable prior year quarter.  This decrease was due primarily to less
     funds available for investment as more working capital was utilized for
     mortgage loan funding.


EXPENSES

     The major components of the Company's total expenses are (i) employees'
     salaries and commissions, (ii) general and administrative expenses and
     (iii) interest expense.  Total expenses for the three months ended December
     31, 1996 increased by 16.1% to $4.25 million from the three months ended
     December 31, 1995.  Salaries and commissions were $2.16 million for the
     December 1996 quarter, an increase of 17.9% over the year-ago quarter.
     General and administrative expense increased by $335,000, or 20.6% over
     prior year.  These higher expenses were a direct result of expanding
     production operations in the quarter and higher foreclosure expenses,
     partially offset by cost reduction measures taken by the Company.

     INTEREST EXPENSE
     Interest expense decreased 36.5% to $129,000 for quarter ended December
     1996 from $203,000 for the same period in 1995.  The decrease was due to an
     increase in use of working capital for loan fundings, resulting in lower
     warehouse line interest expense.


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

RESULTS OF OPERATIONS:

Nine months ended December 31, 1996 compared to nine months ended December 31,
1995.


GENERAL

     In the nine months ended December 31, 1996, the Company reported net
     income of $916,000 or $0.16 per share, compared to net income of $2.57
     million or $0.44 per share for the same period of 1995.  Total revenue
     decreased by 11.0% to $13.85 million from $15.56 million in the year
     earlier nine months.  The lower operating results were largely due to a
     lower gain on sale of mortgage loans and higher operating expenses.


REVENUES

     For the nine months ended December 31, 1996, loan origination revenue
     decreased 6.1% to $2.67 million from $2.84 million for the nine months
     ended December 31, 1995.  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 to $274.64 million
     from $241.37 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 4.9% to $5.29 million for the nine months ended
     December 31, 1996 from $5.05 million for the same period in 1995 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>

                                       Nine Months Ended December 31,
                                       1996           1995
                                       (Dollars in thousands except average loan balance)
<S>                                    <C>            <C>
Beginning loan service portfolio       $1,477,161     $1,401,832

Add: Loans originated                     274,638        241,374
                                                      
Less:     Prepayment and amortization     181,651        156,527
                                                      
Ending loan servicing portfolio         1,570,148      1,486,679

Sub-Servicing                              99,053         80,202

Total servicing portfolio              $1,669,201     $1,566,881

Average loan balance (end of period)     $ 96,519      $  94,402
Weighted average interest rate               7.98%          8.18%
</TABLE>

     The sale of mortgages for the nine months ended December 31, 1996 resulted
     in a gain of $4.22 million compared to a gain of $6.05 million for the
     1995 period.  The gain is adversely impacted by the escalating price
     competition.
<PAGE>
     Interest income, which reflects the interest received on mortgage loans
     held for sale and short-term investment in commercial paper, increased
     4.0% to $1.67 million for the nine months ended December 31, 1996 from
     $1.61 million for the 1995 period.  This increase was due primarily to a
     larger mortgage inventory carried by the Company.


EXPENSES

     The major components of the Company's total expenses are (i) employees'
     salaries and commissions, (ii) general and administrative expenses and
     (iii) interest expenses.  Total expenses for the nine months ended
     December 31, 1996 increased by $1.10 million or 9.8% from the nine months
     ended December 31, 1995.  Salaries and commission expenses increased to
     $6.13 million compared to $5.79 million in the first nine months of fiscal
     year 1995.  General and administrative expenses increased by 17.2% to
     $5.59 million from the comparable period in 1995.  The increase was partly
     attributable to expenditure resulted from ongoing implementation of our
     production expansion plan, and higher foreclosure losses.

     Interest expense decreased 11.2% to $539,000 compared to $607,000 in the
     prior year.  The drop was due to the increase in use of working capital in
     loan funding, hence incurring lower warehouse interest expense.


LIQUIDITY AND CAPITAL RESOURCES

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

     The Company's mortgage loans held for sale increased from $19.88 million at
     March 31, 1996 to $31.96 million at December 31, 1996.  At December 31,
     1996, maximum permitted borrowings under the warehouse line of credit
     agreements with two nonaffiliated banks totaled $45 million and the amount
     outstanding was $24.89 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, 1996.  The Company believes that the warehouse agreements will
     be renewed when the current terms expire in September 1997.

     In addition to the warehouse lines of credit, the Company may use the short
     -term reverse repurchase agreements provided by other investment banking
     firms in connection with its inventory of mortgage loans and mortgage-
     backed securities.  There was no amount outstanding under the agreements at
     December 31, 1996.

     The Company had stockholders' equity of $25.45 million at December 31,
     1996.  Management believes that its current financing arrangements are
     adequate to meet its projected operation needs.


PROSPECTIVE TRENDS
     
     The increase in long-term interest rates during the first four months of
     the fiscal year had a negative impact on new loan originations,
     particularly those for refinance loans.  Although our new loan originations
     increased to $275 million for the nine months ended December 31, 1996
     compared to $241 million for the nine months ended December 31, 1995, the
     mix of new originations tilted more to wholesale rather than retail.
     Wholesale originations are price driven and carry very slim margins for
     origination revenue.
<PAGE>

     We completed the wholesale expansion phase of our production growth plan,
     and have now moved to the retail branch expansion phase.  Retail
     originations, although having better potential for origination revenue
     margins, are much slower to develop momentum and volume of new
     originations.

     Competition is more intense than at any time in the past, as the industry
     continues consolidation and downsizing.  Pricing practices remain cut-
     throat in most of our markets, particularly at the wholesale level in which
     several of the major banks appear to be engaged in a virtual price war for
     mortgages originated through wholesale sources.  Despite the challenges,
     however, we are confident that with our multiple origination channels, the
     Company remains poised to take advantage of whichever channel emerges as
     the most productive in the future.  But competition at all levels is
     formidable and very price intensive, and likely to continue so over the
     coming year.  Therefore, in the absence of a substantial reduction in long-
     term interest rates, we expect to operate at marginal returns at least for
     the near term.  Nevertheless, we intend to remain focused on continuing the
     incremental implementation of our long-range growth plan.

<PAGE>
PART II.  OTHER INFORMATION.


Item 6. Exhibits and Reports on 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, 1996.
<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 13, 1997                  By S/Clement Ziroli
                                             Clement Ziroli
                                             Chairman of the Board of Directors,
                                             Chief Executive Officer
                                          
                                          
                                          
Date:  February 13, 1997                  By S/Pac W. Dong
                                             Pac W. Dong
                                             Chief Financial Officer,
                                             Executive Vice President