<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
_____________
Commission file number 33-1145
_______
CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
______________________________________________________________________
(Exact name of registrant as specified in its charter)
DELAWARE 43-1432378
______________________________________________________________________
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
201 Progress Parkway
Maryland Heights, Missouri 63043
______________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 515-2000
__________________
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
____ ____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date, July 18,
1997:
COMMON STOCK, $1.00 Par Value - 500 Shares
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CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
INDEX
Page
Number
Part I.FINANCIAL INFORMATION
Item 1.Financial Statements
Balance Sheet ...........................................3
Notes to Balance Sheet ..................................4
Item 2.Management's Discussion and Analysis of Financial
Condition and Results of Operations .....................5
Part II.OTHER INFORMATION......................................6
SIGNATURES.....................................................7
<PAGE>
CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
BALANCE SHEET
(Unaudited)
June 30, December 31,
1997 1996
ASSETS
CASH $ 500 $ 500
========== =========
STOCKHOLDER'S EQUITY
COMMON STOCK - $1.00 par value, 150,000
shares authorized, 500 issued
and outstanding $ 500 $ 500
========== =========
The accompanying notes are an integral part of these financial
statements.
<PAGE>
CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
NOTES TO BALANCE SHEET
(Unaudited)
BASIS OF PRESENTATION
The financial information included herein is unaudited. However,
in the opinion of management, such information includes all
adjustments of a normal recurring nature which are necessary for its
fair presentation.
Cornerstone Mortgage Investment Group II, Inc. ("Cornerstone II")
is a Delaware corporation and a wholly-owned subsidiary of Edward D.
Jones & Co., a Missouri limited partnership. Cornerstone II was
incorporated on December 22, 1986, for the limited purpose of
structuring and selling mortgage-backed securities (the
"Certificates"), which are backed by Government National Mortgage
Association (GNMA), Federal Home Loan Mortgage Corporation (FHLMC) and
Federal National Mortgage Association (FNMA) Securities (collectively
the "Deposited Securities").
All costs related to the organization of Cornerstone II were
absorbed by Edward D. Jones & Co. In addition, Edward D. Jones & Co.
paid all offering expenses and assumed all future revenues and
expenses in connection with prior security transactions. Due to the
absence of revenue or expense generating transactions, no income
statement is presented. The balance of stockholder's equity consists
solely of common stock issued on December 30, 1986; therefore, no
statement of stockholder's equity is presented. All funds were
obtained from capital transactions. Therefore, no statement of cash
flows is presented.
<PAGE>
CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
MANAGEMENT'S FINANCIAL DISCUSSION
No securities were issued during the three or six months ended June
30, 1997 or June 30, 1996.
The outstanding principal balance and remaining collateral value
relating to series issued by Cornerstone II are $90,450,500 and
$90,773,109 as of June 30, 1997.
<PAGE>
CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
Item 1:Legal Proceedings:
There are no pending legal proceedings.
Item 2.Changes in Securities:
No change.
Item 3.Default upon Senior Securities:
No default.
Item 4.Submission of Matters to a Vote of Security Holders:
Nothing to report.
Item 5.Other Information:
Nothing to report.
Item 6:Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit No. Description of Exhibit
_________ __________________
4.1 Deposit Agreement dated as of February 20,
1987, between the Company, as Depositor, and
Boatmen's Trust Company of St. Louis, as
Custodian (incorporated by reference to Exhibit
2 to the Current Report on Form 8-K filed on
March 6, 1987).
4.2 Trust Agreement dated as of February 20, 1987,
between the Company, as Depositor, and
Boatmen's Trust Company of St. Louis, as
Trustee (incorporated by reference to Exhibit 3
to the Current Report on Form 8-K filed on
March 6, 1987).
4.3 Trust Agreement dated as of February 20, 1987,
between the Company, as Depositor, and
Boatmen's Trust Company of St. Louis, as
Trustee (incorporated by reference to Exhibit 4
to the Current Report on Form 8-K filed on
March 6, 1987).
(b) Reports on Form 8-K
No reports were filed on Form 8-K for the quarter ended June 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.
CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
(Registrant)
/s/John C. Heisler Chairman of the Board,
__________________ Chief Financial Officer and
John C. Heisler Chief Accounting Officer July 21, 1997
/s/Philip R. Schwab President, Chief Executive
__________________ Officer and Director July 21, 1997
Philip R. Schwab
<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.
CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
(Registrant)
Chairman of the Board,
__________________ Chief Financial Officer and
John C. Heisler Chief Accounting Officer
July 21, 1997
President, Chief Executive
__________________ Officer and Director July 21, 1997
Philip R. Schwab
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Cornerstone Mortgage Investment Group II, Inc. for the
quarter ended June 30, 1997 and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<CIK> 0000809767
<NAME> CORNERSTONE MORTGAGE INVESTMENT GROUP II, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
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<CURRENT-ASSETS> 500
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0
0
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