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                                                                    EXHIBIT 10.3

                                                                       EXECUTION

                               PURCHASE AGREEMENT

                                                                January 26, 2005

United Mortgage Trust
5740 Prospect Ave.
Suite 1000
Dallas, Texas 75206

UMT Funding Trust
5740 Prospect Ave.
Suite 1000
Dallas, Texas 75206

Ladies and Gentlemen:

      1. Introduction. Bayview Financial, L.P., a Delaware limited partnership
(the "Purchaser"), proposes to purchase from UMT Funding Trust, a Maryland real
estate investment trust (the "Depositor"), the "Class A Notes" of the Bayview
Asset-Backed Securities, Series 2005-1. The Class A Notes, together with the
Class B Certificates of the same series (the "Class B Certificates," and
together with the Class A Notes, the "Securities") are to be issued pursuant to
a trust agreement (the "Trust Agreement") dated as of January 1, 2005, between
the Depositor and Wachovia Bank, National Association, as trustee (the
"Trustee"). The Securities will evidence beneficial interests in the Trust Fund
(as defined in the Trust Agreement) consisting primarily of a pool of mortgage
loans (the "Mortgage Loans") sold to the Depositor by UMT LT Trust (the
"Seller") and transferred to the Trustee by the Depositor. The purchase and
transfer of the Mortgage Loans and the issuance of the Securities are referred
to herein as the "Transaction," and the Trust Agreement, Mortgage Loan Sale
Agreement and Servicing Agreement are referred to herein as the "Transaction
Documents."

      Capitalized terms used and not defined herein have the meanings assigned
to them in the Trust Agreement.

      2. Purchase, Sale, Payment and Delivery of the Class A Notes. On the basis
of the representations and warranties herein contained and subject to the terms
and conditions herein set forth, the Depositor agrees to sell to the Purchaser,
and the Purchaser agrees to purchase from the Depositor, 100% of the Class A
Notes in consideration of payment of the purchase price of $[[-]].

      Delivery of and payment for the Class A Notes will be made at the offices
of McKee Nelson LLP, 1919 M Street, N.W., Washington, D.C. 20036, on January 31,
2005, or at such other time as the Purchaser and the Depositor shall otherwise
agree upon, such time being herein

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referred to as the "Closing Date." Delivery of the Class A Notes shall be made
by the Depositor to the Purchaser against payment of the purchase price
specified by the parties in immediately available funds wired to such bank as
may be designated by the Depositor, or paid by such other manner as may be
agreed upon by the Depositor and the Purchaser. The Class A Notes will be in
fully registered form in a single note and registered in such name as the
Purchaser requests in writing at least three business days prior to the Closing
Date.

      3. Representations, Warranties and Covenants of United Mortgage Trust
("United") and the Depositor.

      (a) In connection with the proposed sale of the Class A Notes, United
hereby incorporates each of the representations and warranties made by the
Seller in Section 1.04 of the Mortgage Loan Sale Agreement as if such
representations and warranties were fully set forth herein, restates such
representations and warranties for the benefit of the Purchaser, and further
represents and warrants to the Purchaser that, as of the date hereof and as of
the Closing Date:

            (i) The issuance and sale of the Class A Notes have been duly
      authorized by all requisite action on the part of the Depositor, and when
      (i) executed and authenticated by the Trustee as specified in the Trust
      Agreement and (ii) delivered to the Purchaser, the Class A Notes will be
      duly and validly issued and outstanding and entitled to the benefits of
      the Trust Agreement.

            (ii) At the time of execution and delivery of the Mortgage Loan Sale
      Agreement by the Seller and the Depositor, the Depositor will have
      acquired good title to the Mortgage Loans (other than the servicing rights
      thereto), free and clear of any security interest, mortgage, pledge, lien,
      encumbrance, claim or equity, and, upon delivery to the Purchaser of the
      Class A Notes, the Purchaser will have good title to the Class A Notes
      free and clear of any security interest, mortgage, pledge, lien,
      encumbrance, claim or equity.

            (iii) All information disclosed by United to the Purchaser
      pertaining to the Mortgage Loans is true and correct in all material
      respects, and United has disclosed to the Purchaser all information known
      to United that could materially affect the value of the Mortgage Loans.

            (iv) All information disclosed by the Seller to the Purchaser
      pertaining to the Mortgage Loans is true and correct in all material
      respects, and the Seller has disclosed to the Purchaser all information
      known to the Seller that could materially affect the value of the Mortgage
      Loans.

            (v) All loan files, diskettes, tapes or reports provided by United
      or the Seller to the Purchaser in connection with the Transaction
      contemplated hereby are true and correct in all material respects.

            (vi) The Depositor is not in default under any material provisions
      of any agreement, contract, instrument or indenture to which the Depositor
      is a party or by which it is bound, nor has any event occurred which, with
      notice or lapse of time or both, would constitute a default under any such
      agreement, contract, instrument or indenture,

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      which event of default could have a material adverse effect on the
      performance by the Depositor of its obligations under the Transaction
      Documents.

      (b) In connection with the proposed sale of the Class A Notes, the
Depositor hereby incorporates each of the representations and warranties set
forth in Section 2.03 of the Trust Agreement as if such representations and
warranties were fully set forth herein, restates such representations and
warranties for the benefit of the Purchaser, and further represents and warrants
to the Purchaser that, as of the date hereof and as of the Closing Date:

            (i) The issuance and sale of the Class A Notes have been duly
      authorized by all requisite action on the part of the Depositor, and when
      (i) executed and authenticated by the Trustee as specified in the Trust
      Agreement and (ii) delivered to the Purchaser, the Class A Notes will be
      duly and validly issued and outstanding and entitled to the benefits of
      the Trust Agreement.

            (ii) At the time of execution and delivery of the Trust Agreement by
      the Depositor and the Trustee, the Trustee will have acquired good title
      to the Mortgage Loans on behalf of the Trust Fund, free and clear of any
      security interest, mortgage, pledge, lien, encumbrance, claim or equity,
      and, upon delivery to the Purchaser of the Class A Notes, the Purchaser
      will have good title to the Class A Notes free and clear of any security
      interest, mortgage, pledge, lien, encumbrance, claim or equity.

            (iii) All information disclosed by the Depositor to the Purchaser
      pertaining to the Mortgage Loans is true and correct in all material
      respects, and the Depositor has disclosed to the Purchaser all information
      that could reasonably be expected to materially affect the value of the
      Mortgage Loans.

            (iv) All loan files, diskettes, tapes or reports provided by the
      Depositor to the Purchaser in connection with the Transaction contemplated
      hereby are true and correct in all material respects.

            (v) The Depositor is not in default under any material provisions of
      any agreement, contract, instrument or indenture to which the Depositor is
      a party or by which it is bound, nor has any event occurred which, with
      notice or lapse of time or both, would constitute a default under any such
      agreement, contract, instrument or indenture, which event of default could
      have a material adverse effect on the performance by the Depositor of its
      obligations under the Transaction Documents.

      4. Conditions to Purchaser's Obligations. The obligation of the Purchaser
to purchase the Class A Notes will be subject to (i) the accuracy of the
representations and warranties of United and the Depositor as of the date hereof
and the Closing Date, (ii) the full performance by United and the Depositor of
their obligations hereunder and (iii) the following additional conditions
precedent:

            (a) The Purchaser shall have received the opinion of counsel to the
      Purchaser, dated as of the Closing Date, addressed to the Purchaser, in
      form and substance reasonably satisfactory to the Purchaser.

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            (b) The Purchaser shall have received the opinion of counsel to the
      Trustee, dated as of the Closing Date, addressed to the Purchaser, in form
      and substance reasonably satisfactory to counsel to the Purchaser.

            (c) The Purchaser shall have received the opinion(s) of counsel to
      the Seller and the Depositor, dated as of the Closing Date, addressed to
      the Purchaser, in form and substance reasonably satisfactory to counsel to
      the Purchaser.

            (d) The Purchaser shall have received the opinion of counsel to the
      Seller regarding sale of the Mortgage Loans, dated as of the Closing Date,
      in form and substance reasonably satisfactory to counsel to the Purchaser.

            (e) The Purchaser shall have received the opinion(s) of counsel to
      United, the Seller and the Depositor regarding nonconsolidation, dated as
      of the Closing Date, in form and substance reasonably satisfactory to
      counsel to the Purchaser.

            (f) The Purchaser shall have received the certificate of United
      regarding various corporate matters, dated as of the Closing Date, in form
      and substance reasonably satisfactory to counsel to the Purchaser.

            (g) The Purchaser shall have received the certificate of the Seller
      regarding various corporate matters, dated as of the Closing Date, in form
      and substance reasonably satisfactory to counsel to the Purchaser.

            (h) The Purchaser shall have received the certificate of the
      Depositor regarding authorization, issuance and sale of the Securities,
      dated as of the Closing Date, in form and substance reasonably
      satisfactory to counsel to the Purchaser.

            (i) The Purchaser shall have received the certificate of the
      Depositor regarding various corporate matters, dated as of the Closing
      Date, in form and substance reasonably satisfactory to counsel to the
      Purchaser.

            (j) The Purchaser shall have received the certificate of the Trustee
      regarding various corporate matters, dated as of the Closing Date, in form
      and substance reasonably satisfactory to counsel to the Purchaser.

            (k) The Purchaser shall have received the certificate of the Trustee
      regarding the establishment of the Security Account, dated as of the
      Closing Date, in form and substance reasonably satisfactory to counsel to
      the Purchaser.

            (l) Each of United, the Seller and the Purchaser shall have complied
      with all of its obligations under the Trust Agreement, the Mortgage Loan
      Sale Agreement and each related document, and the representations and
      warranties of United, the Seller and the Purchaser (other than the
      loan-level representations and warranties) shall be true and correct.

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      5. Representations, Warranties and Covenants of the Purchaser. In
connection with the proposed purchase of the Class A Notes, the Purchaser
represents, warrants and covenants that, as of the date hereof and as of the
Closing Date:

            (a) The Purchaser is a limited partnership duly organized, validly
      existing and in good standing under the laws of the State of Delaware and
      has full power and authority (i) to conduct its business as presently
      conducted by it and (ii) to execute and deliver this Agreement and perform
      its obligations under this Agreement.

            (b) The execution and delivery of this Agreement, the performance by
      the Purchaser of its obligations hereunder and the consummation of the
      transactions contemplated hereby have been duly authorized by all
      necessary action on the part of the Purchaser. This Agreement has been
      duly executed and delivered by the Purchaser and constitutes a legal,
      valid and binding obligation of the Purchaser, enforceable in accordance
      with its respective terms subject to bankruptcy, insolvency,
      reorganization or similar laws affecting the enforcement of creditors'
      rights generally and to general principles of equity (whether considered
      in a proceeding or action in equity or at law) and public policy
      considerations underlying the securities laws, to the extent that such
      public policy considerations limit the enforceability of the provisions of
      this Agreement which purport to provide indemnification from securities
      laws liabilities.

            (c) The execution, delivery and performance of this Agreement by the
      Purchaser, and the consummation of the transactions contemplated hereby,
      will not (i) violate or conflict with any provision of the limited
      partnership agreement of the Purchaser or any law, rule, regulation,
      order, judgment, award, administrative interpretation, injunction, writ,
      decree or the like affecting the Purchaser or by which the Purchaser is
      bound or (ii) result in a breach of or constitute a default (or an event
      which, with notice or lapse of time, or both, would constitute a default)
      under any indenture or other material agreement to which the Purchaser is
      a party or by which the Purchaser is bound, which in the case of either
      clause (i) or (ii) will have a material adverse effect on the Purchaser's
      ability to perform its obligations under this Agreement.

            (d) No authorization, consent, approval, license, exemption or other
      action by or notice to or registration or filing with any governmental
      authority or administrative or regulatory body is required for either the
      execution, delivery or performance of this Agreement by the Purchaser or
      the consummation of the transactions contemplated hereby, except such as
      shall have been made or obtained on or prior to the Closing Date.

            (e) There are no pending or, to the best of the Purchaser's
      knowledge, threatened actions, proceedings or investigations against the
      Purchaser before any court, governmental arbitrator or instrumentality
      which if determined adversely to the Purchaser may reasonably be expected,
      individually or in the aggregate, to (i) have a material and adverse
      affect on the Purchaser's ability to perform its obligations under this
      Agreement or (ii) to affect the legality, validity or enforceability of
      this Agreement.

            (f) The Purchaser is not in default with respect to any order or
      decree of any court, regulation or demand of any federal, state, municipal
      or governmental agency,

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      which default would materially and adversely affect the condition
      (financial or other) or operations of the Purchaser or its properties or
      the consequences of which would have a material adverse effect on the
      Purchaser's ability to perform its obligations under this Agreement.

            (g) The Purchaser understands that the Class A Notes have not been,
      and will not be, registered under the Securities Act of 1933, as amended
      (the "Securities Act"), and may not be sold except as permitted in the
      following sentence. The Purchaser agrees that it will purchase the Class A
      Notes solely on its own behalf, and that the Class A Notes may be
      transferred only to (i) a "qualified institutional buyer" (within the
      meaning of Rule 144A under the Securities Act) in accordance with Rule
      144A under the Securities Act or (ii) to an "accredited investor," or an
      entity each of whose equity owners is an "accredited investor," under Rule
      501(a)(l), (2), (3) or (7) of the Securities Act, or any entity in which
      all of the equity owners are such investors (an "Accredited Investor"),
      and which, prior to such transfer, delivers to the Trustee signed letters
      in the forms set forth in the exhibits to the Trust Agreement.

            (h) The Purchaser has received such information as it deems
      necessary in order to make its investment decision. The Purchaser
      acknowledges that it was involved in structuring the Transaction. In
      making its investment decision the Purchaser has not relied on any
      materials other than those described in the Transaction Documents and
      materials received in writing or in electronic form from or on behalf of
      the Seller or the Depositor, and has not relied on verbal discussions with
      the Seller or the Depositor.

            (i) The Purchaser will acquire the Class A Notes for investment
      purposes and not with a view to, or for offer or sale in connection with,
      any distribution in violation of the Securities Act. The Purchaser is an
      Accredited Investor and has such knowledge and experience in financial and
      business matters as to be capable of evaluating the substantial risks of
      investment in the Class A Notes, and it is able to bear the economic risk
      of such investment.

            (j) The Purchaser is not purchasing the Class A Notes for, on behalf
      of or with the assets of an employee benefit plan or other retirement
      arrangement subject to Section 406 of the Employee Retirement Income
      Security Act of 1974, as amended ("ERISA") or to Section 4975 of the
      Internal Revenue Code of 1986, as amended.

            (k) The Purchaser agrees to provide to any person purchasing the
      Class A Notes from the Purchaser a notice advising such purchaser that
      resales of the Class A Notes are restricted as provided in the Trust
      Agreement.

            (l) The Purchaser will acquire and hold the Class A Notes solely for
      its own account and not on behalf of or as nominee for another person.

      6. Notices. All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered to
or mailed by registered mail, postage prepaid, or transmitted by telex,
telegraph or facsimile and confirmed by a similar mailed writing, if to United,
addressed to United, at 5740 Prospect Ave., Suite 1000, Dallas,

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Texas 75206, Attention: Christine Griffin, or to such other address as the
Seller may designate in writing to the Purchaser; if to the Depositor, addressed
to the Depositor, at 5740 Prospect Ave., Suite 1000, Dallas, Texas 75206,
Attention: Christine Griffin, or to such other address as the Depositor may
designate in writing to the Purchaser; and if to the Purchaser, addressed to the
Purchaser at 4425 Ponce de Leon Boulevard, 4th Floor, Coral Gables, Florida
33146, Attention: Legal Department, or to such other address as the Purchaser
may designate in writing to the Seller and the Depositor.

      7. Severability of Provisions. Any part, provision, representation or
warranty of this Agreement, which is prohibited or held to be void or
unenforceable, shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any part,
provision, representation or warranty of this Agreement that is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to the Class A Notes
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law that prohibits or renders void or unenforceable any
provision hereof.

      8. Agreement of Parties. United, the Seller, the Depositor and the
Purchaser each agree to execute and deliver such instruments and take such
actions as the other may, from time to time, reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement.

      9. Representations and Warranties to Survive Delivery. The Purchaser
agrees that the representations, warranties and agreements made by it herein and
in any certificate or other instrument delivered pursuant hereto shall be deemed
to be relied upon by the Seller and the Depositor, notwithstanding any
investigation heretofore or hereafter made by the Seller, the Depositor or on
their behalf, and that the representations, warranties and agreements made by
the Purchaser herein or in any such certificate or other instrument shall
survive the delivery of and payment for the Class A Notes and shall continue in
full force and effect, notwithstanding subsequent termination of this Agreement.

      10. Governing Law and Waiver of Trial by Jury. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. EACH PARTY
HEREBY KNOWINGLY, VOLUNTARY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED
BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE
ARISING UNDER OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE
SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.

      11. Miscellaneous. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns.
This Agreement supersedes all

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prior agreements and understandings relating to the subject matter hereof.
Neither this Agreement nor any term hereof may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of the change, waiver, discharge or termination is
sought. The headings in this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning hereof.

      12. Confidentiality. Neither the Seller nor the Depositor shall reveal to
any party, without the prior written consent of the Purchaser, the terms of the
Letter Agreement executed as of November 5, 2004 between United and the
Purchaser or the price paid by the Purchaser for the Class A Notes, except (i)
that either party may disclose such terms to its employees, officers, directors,
shareholders, financial advisors, consultants, auditors, tax advisors, partners,
affiliates, lenders, attorneys and government authorities to the extent
necessary to evaluate the Transaction contemplated hereby, (ii) where such
information is or becomes known by the general public otherwise than by a breach
by the Seller of this Section 12 and (iii) pursuant to legal process under
applicable procedural rules, statutes or court orders.

      13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be considered one and the same instrument.

      14. Attorneys' Fees. In the event of any dispute hereunder or of any
action to interpret or enforce this Agreement, any provision hereof or any
matter arising herefrom, the prevailing party (or substantially prevailing
party) in any dispute arising under this Agreement or its subsequent performance
shall be entitled to recover its actual costs, fees and expenses, including, but
not limited to, witness fees, expert fees, consultant fees, attorney (in-house
and outside counsel), paralegal and legal assistant fees, and other professional
fees, costs and expenses whether in settlement, in any declaratory action, at
trial or on appeal and in all dispute resolution proceedings, including
bankruptcy and post-judgment collection, proceedings to determine the amount of
attorneys' fees to be awarded; and whether or not suit be brought.

      15. Facsimile Execution. Facsimile signatures on counterparts of this
Agreement are hereby authorized and shall be acknowledged as if such facsimile
signatures were an original execution, and this agreement shall be deemed as
executed when an executed facsimile hereof is transmitted by a party to any
other party.

                                      * * *

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      If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement among the
parties hereto in accordance with its terms.

                                            Very truly yours,

                                            BAYVIEW FINANCIAL, L.P.

                                            By: BAYVIEW FINANCIAL MANAGEMENT
                                                CORP., its General Partner

                                            By: ________________________________
                                                Name: Stuart Waldman
                                                Title: Senior Vice President

The foregoing Agreement is
hereby confirmed and accepted as
of the date first above written:

UMT FUNDING TRUST

By: ________________________________
    Name:
    Title:

UNITED MORTGAGE TRUST

By: ________________________________
    Name:
    Title:

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