SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C. 20549



                            Form 10-Q



     [ x ] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF
              THE SECURITIES EXCHANGE ACT OF 1934

         For the quarterly period ended March 31, 2004

     [   ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF
              THE SECURITIES EXCHANGE ACT OF 1934

         For the transition period from _________ to _________


                  Commission file number 000-32409


                       UNITED MORTGAGE TRUST


          (Exact Name of Registrant as Specified in its
                      Governing Instruments)

     (a Maryland trust)        (IRS Employer Identification
                                     Number 75-6496585)



                    5740 Prospect Avenue
                        Suite 1000
                    Dallas, Texas 75206
                      (214) 237-9305



     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 ___

                              7,074,679

Number of shares of Registrant's shares of beneficial interest outstanding as
of March 31, 2004.

                               (i)
<PAGE>


<Page>
PART I  -- FINANCIAL INFORMATION
<TABLE>
                           UNITED MORTGAGE TRUST
                              BALANCE SHEETS
<Caption>
                                            March 31,        December 31,
                                              2004              2003
                                           ------------------------------
ASSETS                                     (unaudited)        (audited)
<S>                                        <C>              <C>
Cash and cash equivalents                  $  2,429,360     $  4,199,455

Mortgage investments:
  Residential mortgages
    and contracts for deed                   28,661,419       29,780,352
  Residential mortgages and contracts
    for deed foreclosed                       3,264,578        3,346,004
  Interim mortgages                          70,718,289       71,547,192
  Interim mortgages foreclosed                1,212,732        1,263,350
  Reserve for loan losses                      (226,106)        (350,000)
                                            -----------       ----------
Total mortgage investments, net             103,630,912      105,586,898

Line-of-credit receivable, affiliate         13,888,502        6,093,493
Accrued interest receivable                   4,147,922        3,453,824
Receivable from affiliate                       429,187           59,117
Equipment, less accumulated depreciation
  of $5,498 and $4,612, respectively             20,359           21,245
Other assets                                  1,018,717          911,786
                                           ------------     ------------
Total Assets                               $125,564,959     $120,325,818
                                           ------------     ------------
LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
  Line-of-credit payable                   $  6,000,000     $     --
  Distributions payable                       1,084,000        1,071,000
  Accounts payable and accrued
    liabilities                                  29,724          152,175
  Amounts due for redemption of
    beneficial interest                           --             611,970
                                            -----------     ------------
Total Liabilities                             7,113,724        1,835,145
                                            -----------     ------------

Commitments and contingencies                    --               --

Shareholders' equity:
  Shares of beneficial interest; $.01 par
    value; 100,000,000 shares authorized;
    7,528,596 and 7,470,872 shares
    issued; 7,074,679 and 7,028,106
    outstanding, respectively                    75,286           74,708
  Additional paid-in capital                131,722,733      130,539,921
  Advisor's reimbursement                       397,588          397,588
  Cumulative distributions in excess
    of earnings                              (4,310,614)      (3,728,496)
                                            -----------     ------------
                                            127,884,993      127,283,721
  Less treasury stock, 453,917 and
     442,766 shares, respectively,
     at cost                                 (9,433,758)      (8,793,048)
                                            -----------     ------------

Total Shareholders' Equity                  118,451,235      118,490,673
                                           ------------     ------------
Total Liabilities and Shareholders'
  Equity                                   $125,564,959     $120,325,818
                                           ------------     ------------
<FN>
See accompanying notes to financial statements.
</FN>
</Table>


                                -1-



<Page>
<TABLE>
                           UNITED MORTGAGE TRUST
                                STATEMENTS OF INCOME
                                    (unaudited)

<CAPTION>
                                                Three Months Ended
                                                     March 31,
                                                2004          2003
                                             ------------------------
<S>                                         <C>             <C>
Revenues:
  Interest income                           $3,304,618      $2,776,386
                                            ----------      ----------
Expenses:
  Reserve and loss for sale of
    foreclosed properties                      249,331          61,046
  Interest expense                              27,375         102,975
  Loan servicing fee                            36,676          39,270
  Trust administration fee                     210,908         162,919
  General and administrative                   124,762         124,940
                                            ----------      ----------
                                               649,052         491,150
                                            ----------      ----------
Net income                                  $2,655,566      $2,285,236
                                            ==========      ==========
Net income per share of beneficial
  interest                                       $0.38           $0.46
                                            ==========      ==========

Weighted average shares outstanding          7,039,222       4,921,402
                                            ==========      ==========

<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>

                                 -2-


<Page>
<TABLE>
                         UNITED MORTGAGE TRUST
                        STATEMENTS OF CASH FLOWS
                              (unaudited)
<CAPTION>
                                                 Three Months Ended
                                                       March 31,
                                                  2004          2003
                                              ------------------------

<S>                                          <C>            <C>
Cash flows from operating activities:
  Net income                                  $ 2,655,566   $2,285,236
  Adjustments to reconcile net income
    to net cash provided by operating
    activities:
      Reserve and loss for sale of
        foreclosed properties                     249,331       61,046
      Depreciation                                    886          885
      Net amortization of discount on
        mortgage investments                       (8,464)      (3,696)
      Changes in assets and liabilities:
        Accrued interest receivable              (694,098)    (246,374)
        Other assets                             (106,931)      29,029
        Accounts payable and accrued
          liabilities                            (122,451)    (411,106)
          Net cash provided by operating      -----------    ---------
            activities:                         1,973,839    1,715,020
                                              -----------    ---------
Cash flows from investing activities:
  Investment in residential mortgages
    and contracts for deed                     (1,093,646)    (530,534)
  Principal receipts on residential
    mortgages and contracts for deed            2,021,791    1,619,699
  Investment in interim mortgages             (14,693,985) (19,912,117)
  Principal receipts on interim mortgages      15,480,959   13,780,209
  Receivable from affiliate                      (370,070)        (879)
  Line-of-credit receivable affiliate          (7,795,009)      --
          Net cash used in investing          -----------   ----------
          activities:                          (6,449,960)  (5,043,622)
                                              -----------   ----------
Cash flows from financing activities:
  Proceeds from issuance of shares of
    beneficial interest                         1,154,080    7,209,130
  Purchase of treasury stock                     (640,710)     (67,688)
  Redemption of shares of beneficial
    Interest                                     (582,660)       --
  Net borrowings (payments) on
    line-of-credit payable                      6,000,000   (1,245,000)
  Dividends                                    (3,224,684)  (2,305,477)
        Net cash provided by financing        -----------   ----------
          activities:                           2,706,026    3,590,965
                                              -----------   ----------
Net increase(decrease) and cash equivalents   (1,770,095)     262,363

Cash and cash equivalents at
  beginning of period                           4,199,455      646,570
                                              -----------   ----------
Cash and cash equivalents at
  end of period                               $ 2,429,360   $  908,933
                                              -----------   ----------

Supplemental cash flow information:
Interest paid                                 $    27,375   $  102,975
                                              -----------   ----------
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>

                                 -3-


<PAGE>
                            UNITED MORTGAGE TRUST
                       Notes to Financial Statements
                               March 31, 2004

1. Description of Business

The Company

United Mortgage Trust ("the Company") is a Maryland real estate investment
trust which qualifies as a real estate investment trust (a "REIT") under
federal income tax laws. The Advisor to the Company is UMT Advisors, Inc.,
(the "Advisor") a Texas corporation.  The Company invests exclusively in
first lien, fixed rate mortgages secured by single-family residential
property throughout the United States ("Mortgage Investments"). Such loans
are originated by others to the Company's specifications or to specifications
approved by the Company.  Most, if not all, of such loans are not insured or
guaranteed by a federally owned or guaranteed mortgage agency.

The Company completed its public offering of securities in October 2003,
raising approximately $130,540,000 in net offering proceeds. In November
2003, the Company received a merger proposal from UMT Holdings, L.P, an
entity organized by persons that include some of the officers and owners of
the Company and the Advisor. A committee comprised of the Company's
Independent Trustees is currently evaluating the proposal.

2. Basis of Presentation

The accompanying unaudited financial statements were prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information and with the instructions to Form 10-Q of
Regulation S-X. They do not include all information and footnotes required by
accounting principles generally accepted in the United States of America for
complete financial statements. However, except as disclosed herein, there has
been no material change in information disclosed in the notes to the
financial statements for the year ended December 31, 2003 included in the
Company's 10-K filed with the Securities and Exchange Commission. The interim
unaudited financial statements should be read in conjunction with those
financial statements. In the opinion of management, all adjustments
considered necessary for a fair presentation, consisting solely of normal
recurring adjustments, were made. Operating results for the three months
ended March 31, 2004 are not necessarily indicative of the results that may
be expected for the year ended December 31, 2004.

3. Line-of-Credit Payable

On July 11, 2003 the Company extended its line-of-credit payable for 12
months under the same terms as those in 2002. The line-of-credit payable
is collateralized by certain residential mortgages.  The credit facility
has a maximum borrowing limit of $10,000,000. Interest on the outstanding
balance was 4.50% at March 31, 2004.

4. Related Party Transactions

a). Fees paid to the Advisor, a related party: On January 1, 2001, the
Company entered into an Advisory Agreement with the Advisor whereby the
Advisor provides the Company with day-to-day management and administrative
services subject to the supervision and review by the Trustees. In
consideration for the services,

                              -4-
<Page>
the Company paid the Advisors a trust administration fee of $211,000 and
$163,000 for the 2004 and 2003 quarters, respectively.  The fee was
calculated as 1/12th of 1/2 of 1% paid monthly of the first $50,000,000 of
income producing assets and 1/12th of 1% of income producing assets in
excess of $50,000,000, paid monthly. The terms of the Advisory Agreement
calculates the Acquisition Fee (paid for sourcing suitable investments) as
3% of net offering proceeds (net offering proceeds are gross offering
proceeds less commissions and marketing reallowances). There were no
acquisition fees paid in 2004 since the Company's offering ended in 2003.
Acquisition fees paid in the first quarter of 2003 were $204,000.

b). Loan servicing fees paid to an affiliate: Under the terms of a
Mortgage Servicing Agreement with Prospect Service Corp., the Company
incurred loan servicing fees of $37,000 and $39,000 in the 2004 and 2003
quarters, respectively.

c). Purchasing Mortgage Investments from affiliates: The Company purchased
residential mortgages from South Central Mortgage, Inc. in the amount of
$939,000 and $531,000 in the 2004 and 2003 quarter, respectively. The
number of new loans purchased during the respective periods was three and
nine, and 27 notes were refinanced contracts for deed during the 2004
quarter. Below is a table of funds used to purchase interim mortgages from
affiliates during the quarters:

Affiliated Company                 2004         2003
---------------------          -----------   -----------
Capital Reserve Corp.          $   834,623   $ 5,755,075
Ready America Funding          $ 1,933,599   $ 2,615,030
REO Property Company           $   170,591       --
Ready Mortgage Corp.           $   723,417   $ 6,220,609
South Central Mortgage         $     --      $    41,862
UMTH Lending                   $ 5,143,563       --

d). SCMI Recourse Agreement: SCMI has agreed that, if the obligor on any
Residential Mortgage or Contract for Deed sold to the Company by SCMI or its
Affiliates, and that has had less than 12 payments made on it, defaults in
the making of any payment or other obligation thereon during the period
ending before the 12th payment after the Company bought that Residential
Mortgage or Contract for Deed, then SCMI shall buy that Mortgage
Investment from the Company or advance on a month to month basis, of all
lost interest, tax and insurance escrow payments, as well as any costs
incurred by it related to curing the default or obtaining title of the
property securing the defaulted obligation.

e.) Line-of-Credit Receivable, Affiliate: The Company extended a revolving
line-of-credit ("LOC") to an affiliate, United Development Funding, L.P.,
which is collateralized by the affiliate's real estate assets. Accrued
interest on the LOC is payable monthly to the Company with the principal
balance being due on September 1, 2004. The Company has the ability, but not
an obligation, to renew the affiliate's LOC agreement on an annual basis. The
Company monitors the LOC for collectibility on a continuing basis based on
the affiliate's payment history. No valuation allowance or charge to earnings
was recorded for the quarter ended March 31, 2004, based on the Company's
evaluation.

5. Subsequent Event

     On April 13, 2004, United Mortgage Trust, through two newly created,
wholly-owned subsidiaries, UMT LT Trust as the 'Seller' and UMT Funding Trust
as the 'Depositor', both Maryland real estate investment trusts, completed a
securitization of $12,607 226 principal amount of mortgage loans through the
private issuance of $9,469,158 in 9.25% Class A Notes ('Notes'). The Notes,
together with  $3,138,067 in Class B Certificates (the 'Certificates'),
collectively referred to as the 'Securities' were issued by Wachovia Bank as
Trustee pursuant to a Trust Agreement dated as of April 1, 2004 between the
Bank and the Depositor. The Class A Notes were then sold by the Depositor to
Bayview Financial Trading Group, L.P. ('Bayview'), pursuant to a Purchase
Agreement dated as April 13, 2004 (the 'Note Purchase Agreement') between
Bayview, the Depositor and United Mortgage Trust.  The Notes were sold
pursuant to an exemption from the registration requirements of the Securities
Act of 1933, as amended.

      The Securities evidence the entire beneficial ownership interest in a
Trust Fund created under the Trust Agreement, which consists of a pool of
performing first lien residential mortgage loans and contracts for deed (the
'Mortgage Loans') with an aggregate principal balance of $12,607,226 as of
April 13, 2004. United Mortgage Trust transferred the Mortgage Loans to the
Seller as a capital contribution and the Seller sold the Mortgage Loans to
the Depositor pursuant to a Mortgage Loan Sale Agreement dated as of April 1,
2004. The Mortgage Loan Sale Agreement includes a right on the part of the
Depositor to require the Seller to repurchase certain Mortgage Loans upon the
Seller's breach of a representation or warranty with respect to certain
characteristics of the Mortgage Loans.  United Mortgage Trust has agreed to
guarantee the obligations of the Seller under the Mortgage Loan Sale
Agreement, including the obligation of the Seller to repurchase Mortgage
Loans as to which the Seller has breached a representation or warranty. The
Class B Certificates give the Depositor the right to receive all remaining
monthly interest after all payments due on the Class A Notes and all
principal and interest on the Mortgage Loans after retirement of the Class A
Notes. The Class B Certificates will be retained by the Depositor.

     Simultaneously with the Depositor's conveyance of the Mortgage Loans to
the Trustee and pursuant to the terms of a Servicing Rights Transfer
Agreement dated as of April 1, 2004 by and between Prospect Service Corp., as
owner of the servicing rights to the Mortgage Loans, and Bayview, United
Mortgage Trust transferred the servicing rights to the Mortgage Loans to
Bayview.

     United Mortgage Trust intends to use the proceeds from this
securitization for general corporate purposes.






                           -5-




<Page>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

     The following section contains forward-looking statements within the
meaning of Section 27A of the Securities Act, and Section 21E of the Exchange
Act and should be read in conjunction with the Financial Statements and
related notes appearing in this Form 10-Q. Such forward-looking statements
may be identified by the words "anticipate," "believe," "estimate," "expect"
or "intend" and similar expressions. Forward looking statements are likely to
address such matters as our business strategy,  future operating  results,
future sources of funding for  mortgage  loans  brokered by us, future
economic  conditions  and pending litigation  involving us each of which are
discussed herein under the caption "Factors that may Affect Future Results."


               RESULTS OF OPERATIONS FOR THE THREE MONTHS
                     ENDED MARCH 31, 2004 AND 2003

     We were formed on July 12, 1996, however our business operations
commenced in March 1997 when the Securities and Exchange Commission issued an
order of registration for our initial public offering of shares. We completed
our second public offering of our securities in October 2003, raising
approximately $130,540,000 in net offering proceeds. In November 2003, we
received a merger proposal from UMT Holdings, L.P, an entity organized by
persons that include some of our officers and owners and our Advisor. A
committee comprised of our Independent Trustees is currently evaluating the
proposal.

LOANS PURCHASED DURING PERIODS

     During the three months ended March 31, 2004 we purchased three
residential mortgages with an aggregate unpaid principal balance of $124,000
compared to purchases during 2003 of eight residential mortgages and one
contract for deed with an aggregate unpaid principal balance of
approximately $531,000, at the time of purchase. Twenty-nine of our
contracts for deed qualified for refinancing during the period and our loans
servicer originated new loans secured by the same property which we
acquired. The net increase in our portfolio was approximately $84,000 (the
difference between paying off the contracts for deed and purchasing the new
real estate lien notes).

     As of March 31, 2004, our mortgage portfolio in the aggregate consisted
of 551 residential mortgages, 42 contracts for deed and 1,136 interim
mortgages. The portfolio had an unpaid principal balance on the books of
$103,631,000. The average loan in the portfolio had a blended interest rate
of 12.89%, a current annual yield of 12.96%, an investment-to-value ratio of
70.55%, an unpaid principal balance of $57,000, and a term remaining of 334
months for residential mortgages and contracts for deed and less than 12
months for interim mortgages.  The number of contracts for deed have
decreased significantly during the current period as they continue to be
converted to notes and deeds of trust. The contracts for deed were paid off
and the new notes were acquired by us.

                                -6-


<Page>
     As of March 31, 2003, our mortgage portfolio in the aggregate consisted
of 588 residential mortgages, 199 contracts for deed and 878 interim
mortgages. As of the dates of purchase, the portfolio had an unpaid
principal balance of $90,980,000. The average loan in the portfolio had a
blended interest rate of 12.92%, a current annual yield of 13.03%, an
investment-to-value ratio of 71.39%, an unpaid principal balance of $55,000,
and a term remaining of 305 months for residential mortgages and contracts
for deed and less than 12 months for interim mortgages.

     The major portion of our portfolio is comprised of interim mortgages. We
have been shifting to a portfolio that is more heavily weighted to interim
mortgages because 1) to date we have experienced minimal income loss due to
default with interim mortgages since those loans are subject to limited or
full recourse, and 2) blended yields for interim mortgages offered to us have
been higher than those of the other mortgage investments. We expect this
trend to continue for the foreseeable future.

     The following table illustrates percentage of our portfolio dedicated
to each loan category:
----------------------------------------------------------------
                                           March 31,
Loan Category                       2004               2003
---------------------           --------------------------------
Residential Mortgages                25%                30%
Contracts for Deed                    2%                11%
Interim Mortgages                    73%                59%
----------------------------------------------------------------

     All of the properties that were security for the residential mortgages,
contracts for deed and interim mortgages were located in the United States.
Each of the properties was adequately covered by a mortgagee's title
insurance policy and hazard insurance.

     During the three-month periods ended March 31, 2004 and 2003, our
investments generated approximately $3,305,000 and $2,776,000 of interest
income, a 19% increase. The rise was attributed to additional mortgage
investments purchased between periods. During 2004 we used cash, loan
principal returned when loans pay off and our credit facility to purchase
loans. During 2003 we additionally used net offering proceeds derived from
the sale of our shares.

     Operating expenses for the three-month periods were approximately
$649,000 and $491,000, a 32% increase, the major categories are listed
below:

     Loan losses - $249,000 in 2004 compared to $61,000 in 2003.

     Trust management fee - $211,000 in 2004 compared to $163,000 in 2003.

     General and administrative - $125,000 in 2004 compared to the same
     amount in 2003.

     Interest expense - $27,000 in 2004 compared to $103,000 in 2003.


                                  -7-


<Page>
     Operating expenses, less interest expense, as a percentage of income
were 18.81% and 13.98%, respectively, for the 2004 and 2003 three-month
periods, and operating expenses as a percentage of invested assets were
0.59% and 0.42%, respectively.

     We recorded a loan loss reserve of $225,000 during the first quarter of
2004. We recorded loan loss expenses of $24,000 and $61,000 in the 2004 and
2003 periods, respectively. Our loan loss reserves are calculated as
approximately one-half percent of book value of residential mortgages and
contracts for deed per quarter and approximately one-tenth percent of the
book value of interim mortgages per quarter. Losses have primarily been
recognized in residential mortgages and contracts for deed categories
although we experienced our first loan loss in the interim mortgages
category during the current quarter. Of the approximate $228,000,000 interim
mortgages we have acquired, we have recorded losses of $93,000, .04% of the
total. Of the $53,000,000 residential mortgages and contracts for deed we
have acquired, we have recorded approximately $2,360,000 in losses, 4.43% of
the total. We anticipate loan losses to continue and therefore are
continuing to monitor the adequacy of our loan loss reserve and we are
expecting to increase our loan loss reserves on a go-forward basis.

     Income during the current period did not keep pace with the amount of
capital raised in the fourth quarter of 2003. We carried large cash balances
during the December 2003 quarter and were not able to invest it until the
first quarter of this year.  The dividend rate is set the quarter prior to
the payment quarter, based of our estimate of available investments from
contacting our loan sources. The amount of dollars invested was on target
however the inflow of cash from loans paying off kept pace with the outflow
of cash, making the net effect not as we anticipated. Net income was
approximately $2,656,000 and $2,285,000, respectively a 16% increase, for
the three months ended March 31, 2004 and 2003, respectively. Earnings per
weighted average share were $0.38 and $0.46, a 17% decrease.

     Our default rate as of March 31, 2004 was 3.76% of our portfolio
compared to 4.06% in 2003. Most of the 2004 loans were no longer recoursed
while 37% of the 2003 loans were. During the 2004 quarter we sold 13
properties compared to 28 during the 2003 quarter.

    Distributions to shareholders per share of beneficial interest in 2004
and 2003 were $0.1533 per share per month.

                  CAPITAL RESOURCES AND LIQUIDITY FOR
             THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

     We utilize funds made available from the sale of our shares, funds made
available on our bank line-of-credit and repayment of principal on our loans
to purchase mortgage investments.
                                                  March 31,
                                         2004                   2003
Shares issued                                57,700          413,000
Number of new shareholders                      --               337
Gross offering proceeds                 $ 1,154,000      $ 8,260,000
Share repurchases                       $ ( 641,000)           --
Redemption of shares of beneficial
  interest                              $ ( 583,000)           --
Net offering proceeds (after deduction
  of selling commissions and fees)      $ 1,154,000      $ 7,210,000
Principal receipts from Residential
  Mortgages and Contracts for Deed      $ 2,022,000      $ 1,620,000
Principal receipts from
  Interim Mortgages                     $15,481,000      $13,780,000
Net borrowing from credit line          $(6,000,000)     $(1,245,000)

                                   -8-

<Page>
   We are no longer offering shares in the public markets except to existing
shareholders through our new dividend reinvestment plan which was implemented
in November 2003. We completed our public offering of our securities in
October 2003, raising approximately $130,540,000 in net offering proceeds. In
November 2003, we received a merger proposal from UMT Holdings, L.P, an
entity organized by persons that include some of our officers and owners and
our Advisor. A committee comprised of our Independent Trustees is currently
evaluating the proposal.

     As of March 31, 2004, we had issued an aggregate of 7,528,596 shares of
beneficial interest and repurchased into treasury, through our share
repurchase plan and new share redemption plan, 453,917 shares. Total shares
outstanding were 7,074,679. Inception to date gross offering proceeds were
$150,923,000 and net proceeds after fees, marketing reallowance and
commissions were $132,119,000.

     As of March 31, 2003, we had issued an aggregate of 5,388,919 shares of
beneficial interest and repurchased into treasury, through our Share
Repurchase Plan, 122,873 shares. Total shares outstanding were 5,266,046.
Inception to date gross offering proceeds were $108,000,000 with net
proceeds after share repurchase were $95,000,000.

    With Trustee approval and effective July 10, 2003 we extended and
increased our credit facility with the same lender to $10,000,000. The
term of the agreement is 12 months. The line-of-credit was collateralized
with the assignment of certain residential mortgages.  Interest is
calculated at the bank's prime rate plus 0.50%, or 4.50%.  We utilized the
credit facility to acquire and warehouse mortgage investments as they
become available. The outstanding loan balance at the end the comparable
quarters was $6,000,000 and $5,000,000, respectively.

Item 3. Quantitative and Qualitative Disclosure About Market Risk.

No change.

                                    -9-

<Page>
Item 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures designed to ensure that
information disclosed in our annual and periodic reports is recorded,
processed, summarized and reported within the time periods specified in
the Securities and Exchange Commission's rules and forms. In addition, we
designed these disclosure controls and procedures to ensure that this
information is accumulated and communicated to our management, including
our chief executive officer (our "CEO") and chief financial officer (our
"CFO"), to allow timely decisions regarding required disclosure. SEC rules
require that we disclose the conclusions of our CEO and CFO about the
effectiveness of our disclosure controls and procedures.

         We do not expect that our disclosure controls and procedures will
prevent all errors or fraud. A control system, no matter how well
conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. In addition,
the design of disclosure controls and procedures must reflect the fact
that there are resource constraints, and the benefits of controls must be
considered relative to their costs. Because of the inherent limitation in
a cost-effective control system, misstatements due to error or fraud could
occur and not be detected.

         We evaluate the effectiveness of our disclosure controls and
procedures as of the end of each fiscal quarter. Based on our most recent
evaluation, our CEO and CFO believe, and have certified, that our
disclosure controls and procedures are effective to (1) ensure that
material information relating to us is made known to management, including
the CEO and CFO, particularly during the period when our periodic reports
are being prepared, and (2) provide reasonable assurance that our
financial statements fairly present in all material respects our financial
condition and results of operations.

      Since the date of this most recent evaluation, there have been no
significant changes in our internal controls or in other factors that
could significantly affect the internal controls subsequent to the date we
completed our evaluation.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 2. Changes in Securities and Use of Proceeds.

     We are offering up to 511,000 shares of beneficial interest at $20 per
share through our dividend reinvestment plan. There are no commissions or
fees paid from the proceeds. We use proceeds from the plan primarily to
repurchase shares in our share redemption plan. Absent applications for
repurchase, we use the proceeds to buy mortgage investments

     The following table sets forth information relating to shares of
beneficial interest issued and the use of proceeds of the offering during the
quarter ended March 31, 2004.

Shares issued                               57,700
Gross offering proceeds                  $1,154,000


Item 3. Defaults Upon Senior Debentures.

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

                                -10-


Item 5. Other Information.

Subsequent Event

     On April 13, 2004, United Mortgage Trust, through two newly created,
wholly-owned subsidiaries, UMT LT Trust as the 'Seller' and UMT Funding Trust
as the 'Depositor', both Maryland real estate investment trusts, completed a
securitization of $12,607 226 principal amount of mortgage loans through the
private issuance of $9,469,158 in 9.25% Class A Notes ('Notes'). The Notes,
together with  $3,138,067 in Class B Certificates (the 'Certificates'),
collectively referred to as the 'Securities' were issued by Wachovia Bank as
Trustee pursuant to a Trust Agreement dated as of April 1, 2004 between the
Bank and the Depositor. The Class A Notes were then sold by the Depositor to
Bayview Financial Trading Group, L.P. ('Bayview'), pursuant to a Purchase
Agreement dated as April 13, 2004 (the 'Note Purchase Agreement') between
Bayview, the Depositor and United Mortgage Trust.  The Notes were sold
pursuant to an exemption from the registration requirements of the Securities
Act of 1933, as amended.

      The Securities evidence the entire beneficial ownership interest in a
Trust Fund created under the Trust Agreement, which consists of a pool of
performing first lien residential mortgage loans and contracts for deed (the
'Mortgage Loans') with an aggregate principal balance of $12,607,226 as of
April 13, 2004. United Mortgage Trust transferred the Mortgage Loans to the
Seller as a capital contribution and the Seller sold the Mortgage Loans to
the Depositor pursuant to a Mortgage Loan Sale Agreement dated as of April 1,
2004. The Mortgage Loan Sale Agreement includes a right on the part of the
Depositor to require the Seller to repurchase certain Mortgage Loans upon the
Seller's breach of a representation or warranty with respect to certain
characteristics of the Mortgage Loans.  United Mortgage Trust has agreed to
guarantee the obligations of the Seller under the Mortgage Loan Sale
Agreement, including the obligation of the Seller to repurchase Mortgage
Loans as to which the Seller has breached a representation or warranty. The
Class B Certificates give the Depositor the right to receive all remaining
monthly interest after all payments due on the Class A Notes and all
principal and interest on the Mortgage Loans after retirement of the Class A
Notes. The Class B Certificates will be retained by the Depositor.

     Simultaneously with the Depositor's conveyance of the Mortgage Loans to
the Trustee and pursuant to the terms of a Servicing Rights Transfer
Agreement dated as of April 1, 2004 by and between Prospect Service Corp., as
owner of the servicing rights to the Mortgage Loans, and Bayview, United
Mortgage Trust transferred the servicing rights to the Mortgage Loans to
Bayview.

     United Mortgage Trust intends to use the proceeds from this
securitization for general corporate purposes.

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

No reports on Form 8-K have been filed during the quarter.
Exhibit 31. Certification pursuant to Section 302 of the Sarbanes-Oxley Act
Exhibit 32. Certification pursuant to Section 906 of the Sarbanes-Oxley Act

                               -11-




SIGNATURES

     In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, there under duly authorized.


                                        UNITED MORTGAGE TRUST
                                        (Registrant)



Date:  May 10, 2004                    /S/Christine A. Griffin
                                         Christine A. Griffin
                                              President



                                  -12-

EXHIBITS

Exhibit 31. Certification pursuant to Section 302 of the Sarbanes-Oxley Act

I, Christine A. Griffin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of United Mortgage Trust;

2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and have:

         (a) Designed such disclosure controls and procedures, or caused such
         disclosure controls and procedures to be designed under our
         supervision, to ensure that material information relating to the
         registrant, including its consolidated subsidiaries, is made known to
         us by others within those entities, particularly during the period in
         which this report is being prepared;

         (b) Evaluated the effectiveness of the registrant's disclosure
         controls and procedures and presented in this report our conclusions
         about the effectiveness of the disclosure controls and procedures, as
         of the end of the period covered by this report based on such
         evaluation; and

         (c) Disclosed in this report any change in the registrant's internal
         control over financial reporting that occurred during the registrant's
         most recent fiscal quarter that has materially affected, or is
         reasonably likely to materially affect, the registrant's internal
         control over financial reporting; and

5. I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and the audit committee
of the registrant's board of trustees:

         (a) All significant deficiencies and material weaknesses in the design
         or operation of internal control over financial reporting which are
         reasonably likely to adversely affect the registrant's ability to
         record, process, summarize and report financial information; and

         (b) Any fraud, whether or not material, that involves management or
         other employees who have a significant role in the registrant's
         internal control over financial reporting.


May 10, 2004                        /s/ Christine Griffin
                                     ---------------------------------------
                                     Christine Griffin
                                     President and Chief Executive Officer

                                   -13-

<Page>
Exhibit 32. Certification pursuant to Section 906 of the Sarbanes-Oxley Act

I, Christine A. Griffin, Chief Executive Officer and Chief Financial Officer
of United Mortgage Trust (the "registrant"), have executed this certification
for furnishing to the Securities and Exchange Commission in connection with
the filing with the Commission of the registrant's Quarterly Report on Form
10-Q for the period ended March 31, 2004 (the "Report"). I hereby certify
that:

         (1)      the Report fully complies with the requirements of Section
                  13(a) or 15(d) of the Securities Exchange Act of 1934; and

         (2)      the information contained in the Report fairly presents, in
                  all material respects, the financial condition and results
of operations of the of the registrant as of and for the
end of that period.


May 10, 2004


/s/ Christine A Griffin
-----------------------
Christine A Griffin
Chief Executive Officer/Chief Financial Officer


                               -14-