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 June 30, 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 ___

                           7,066,058

Number of shares of Registrant's shares of beneficial interest
outstanding as of June 30, 2004.

                               (i)
<PAGE>


<Page>
TABLE OF CONTENTS

PART I FINANCIAL INFORMATION
Item 1. Financial Statements
     Balance Sheets
     Unaudited Statements of Income
     Unaudited Statements of Cash Flows
     Notes to Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures

PART II OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults upon Senior Debentures
Item 4. Submission of Matter to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
EXHIBITS



                                   (ii)












<Page>
PART I  -- FINANCIAL INFORMATION
<TABLE>
                           UNITED MORTGAGE TRUST
                              BALANCE SHEETS
<Caption>
                                            June 30,        December 31,
                                              2004              2003
                                           ------------------------------
ASSETS                                     (unaudited)        (audited)
<S>                                        <C>              <C>
Cash and cash equivalents                  $  2,915,539     $  4,199,455

Mortgage investments:
  Residential mortgages
    and contracts for deed                      --            29,780,352
  Investment in trust receivables            16,267,123           --
  Residential mortgages and contracts
    for deed foreclosed                       2,881,777        3,346,004
  Interim mortgages                          70,247,167       71,547,192
  Interim mortgages foreclosed                1,090,743        1,263,350
  Reserve for loan losses                      (182,478)        (350,000)
                                            -----------      -----------
Total mortgage investments, net              90,304,332      105,586,898

Line-of-credit receivable, affiliate         18,280,125        6,093,493
Accrued interest receivable                   4,100,025        3,453,824
Receivable from affiliate                     2,034,162           59,117
Equipment, less accumulated depreciation
  of $6,384 and $4,612, respectively             19,473           21,245
Other assets                                  1,161,954          911,786
                                           ------------     ------------
Total Assets                               $118,815,610     $120,325,818
                                           ------------     ------------
LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
  Line-of-credit, payable                  $    --          $     --
  Distributions payable                       1,088,958        1,071,000
  Accounts payable and accrued
    liabilities                                   1,411          152,175
  Amounts due for redemption of
    beneficial interest                           --             611,970
                                            -----------     ------------
Total Liabilities                             1,090,369        1,835,145
                                            -----------     ------------

Commitments and contingencies                    --               --

Shareholders' equity:
  Shares of beneficial interest; $.01 par
    value; 100,000,000 shares authorized;
    7,586,922 and 7,470,872 shares
    issued; 7,066,058 and 7,028,106
    outstanding, respectively                    75,869           74,708
  Additional paid-in capital                132,612,824      130,539,921
  Advisor's reimbursement                       397,588          397,588
  Cumulative distributions in excess
    of earnings                              (5,088,256)      (3,728,496)
                                            -----------     ------------
                                            127,998,025      127,283,721
  Less treasury stock, 520,864 and
     442,766 shares, respectively,
     at cost                                (10,272,784)      (8,793,048)
                                            -----------     ------------

Total Shareholders' Equity                  117,725,241      118,490,673
                                           ------------     ------------
Total Liabilities and Shareholders'
  Equity                                   $118,815,610     $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       Six Months Ended
                                           June 30,                 June 30,
                                    2004              2003   2004              2003
                                    ----------------------   ----------------------
<S>                                 <C>         <C>          <C>         <C>
Revenues:
  Interest income                   $3,190,536   $2,949,163  $6,495,154  $5,725,549

Expense:
  Reserve for and loss from sales
    of foreclosed properties            409,646      64,470     658,977     125,516
  Interest expense                        1,500      37,666      28,875     140,641
  Loan servicing fee                     24,300      36,900      60,976      76,170
  Trust administration fee              192,537     175,111     403,445     338,030
  General and administrative             91,047      75,102     215,809     200,042
                                     ----------  ----------  ----------  ----------
                                        719,030     389,249   1,368,082     880,399
                                     ----------  ----------  ----------  ----------
Net income                           $2,471,506  $2,559,914  $5,127,072  $4,845,150
                                     ==========  ==========  ==========  ==========
Net income per share
   of beneficial interest                 $0.35       $0.46       $0.73       $0.93
                                     ==========  ==========  ==========  ==========
Weighted average
    shares outstanding                7,064,757   5,510,048   7,054,972   5,215,725
                                     ==========  ==========  ==========  ==========
<FN>
See accompanying notes.
</FN>
</TABLE>

                                 -2-


<Page>
<TABLE>
                         UNITED MORTGAGE TRUST
                        STATEMENTS OF CASH FLOWS
                              (unaudited)
<CAPTION>
                                              For the Six Months Ended
                                                       June 30,
                                                  2004          2003
                                              ------------------------

<S>                                          <C>            <C>
Cash flows from operating activities:
  Net income                                  $ 5,127,072   $ 4,845,150
  Adjustments to reconcile net income
    to net cash provided by operating
    activities:
      Reserve for and loss from sales
        of foreclosed properties                  658,977       125,516
      Depreciation and amortization                 1,772         1,015
      Net amortization of discount on
        mortgage investments                       20,477       (51,712)
      Changes in assets and liabilities:
        Accrued interest receivable              (646,202)     (536,019)
        Other assets                             (250,168)       37,702
        Accounts payable and accrued
          liabilities                            (150,764)     (481,220)
          Net cash provided by operating      -----------    ----------
            activities:                         4,761,164     3,940,432
                                              -----------    ----------
Cash flows from investing activities:
  Investment in residential mortgages
    and contracts for deed                     (1,225,004)  (1,054,844)
  Principal receipts on residential
    mortgages and contracts for deed            5,142,511     2,982,033
  Proceeds from sale of mortgage
    Loans-securitization                        9,455,520        --
  Line-of-credit receivable, affiliate        (12,186,632)       --
  Investment in interim mortgages             (33,671,776)  (43,385,607)
  Principal receipts on interim mortgages      34,901,861    28,934,164
  Receivable from affiliate                    (1,975,045)       51,888
Net cash provided by (used in)                -----------   -----------
         investing activities:                    441,435   (12,472,366)
                                              -----------   -----------
Cash flows from financing activities:
  Proceeds from issuance of shares of
    beneficial interest                         2,074,065    19,099,492
  Purchases of treasury stock                  (1,479,736)   (1,169,169)
  Shares redeemed                                (611,970)      --
  Net borrowings (payments) on Line-
    of-credit payable                              --        (3,695,000)
  Dividends                                    (6,468,874)   (4,738,847)
        Net cash provided by (used in)        -----------   -----------
          Financing activities:                (6,486,515)    9,496,476
                                              -----------   -----------
Net increase (decrease) in cash                (1,283,916)      964,542

Cash and cash equivalents
  at beginning of period                        4,199,455       646,570
                                              -----------   -----------
Cash and cash equivalents at end
  of period                                   $ 2,915,539   $ 1,611,112
                                              -----------   -----------
Interest paid                                 $    28,875   $   102,641
                                              -----------   -----------
<FN>
See accompanying notes.
</FN>
</TABLE>

                                 -3-



<PAGE>
                            UNITED MORTGAGE TRUST
                       Notes to Financial Statements
                               June 30, 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 and six months ended June 30, 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, 2004 the Company's line-of-credit was extended for two
months while the bank was preparing a renewal at the Company's
request. The line-of-credit payable was collateralized by certain
residential mortgages.  The credit facility had a maximum borrowing
limit of $10,000,000. Interest on the outstanding balance was 4.75%
at June 30, 2004.

                                   -4-
<Page>
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 these services, the Company paid
the Advisor a trust administration fee of $192,537 and $175,111 for
the 2004 and 2003 quarters, respectively, and $403,445 and $338,030
for the six month respective periods.  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 three
months and six months of 2003 were $207,159 and $507,776,
respectively.

b). Loan servicing fees paid to an affiliate: Under the terms of a
Mortgage Servicing Agreement with Prospect Service Corp., ('PSC')the
Company incurred loan servicing fees of $24,300 and $60,976 in the
three and six months of 2004 and $36,900 and $76,170 in the 2003
periods, respectively.

c). Purchasing Mortgage Investments from affiliates:

Residential Mortgages and Contracts for Deed: The Company purchases
residential mortgage and contract for deed from South Central
Mortgage, an affiliate. The Company purchased no residential
mortgages or contracts for deed during the June 2004 quarter and
purchased 4 residential mortgages and 6 contracts for deed in the
2003 quarter and three and 12 residential mortgages in respective
six-month periods. During the six month period of 2004, 36 contracts
for deed were converted to notes and deeds of trust.

Interim Mortgages: The Company purchases interim mortgages from
various sources including the below listed affiliates:
<Table>
<Caption>
                              Three Months                  Six Months
Affiliated Company       2004              2003     2004                2003
---------------------    ----------------------     ------------------------
<S>                      <C>         <C>            <C>         <C>
Capital Reserve Corp.    $  504,000  $6,460,000     $1,336,000  $12,216,000
Ready America Funding     6,319,000   7,629,000      8,160,000    8,438,000
REO Property Company        278,000       --           448,000       --
Ready Mortgage Corp.          --      4,077,000        450,351   12,104,000
South Central Mortgage        2,200      21,000          2,200       63,000
UMTH Lending              3,346,000       --         8,492,000       --
</Table>
                                    -5-


<Page>
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, 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. ('UDF'), which is collateralized by the affiliate's real
estate assets. Accrued interest on the LOC is payable monthly at 15% 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 six months ended June 30, 2004, based on the Company's
evaluation.

f.) A two percent fee in the amount of $188,000 was paid to the Advisor
as compensation for facilitating the Bayveiw securitization.

5. Investment In Trust Receivable

Prior to the Bayview securitization, all residential mortgages and
contracts for deed were transferred to a qualified special purpose
entity, wholly-owned by the Company.

6. Bayview Securitization

On April 13, 2004, the Company, through two newly created qualifying
special purpose entities, completed a securitization of approximately
$12.6 million in principal amount of mortgage loans carrying a weighted
average interest rate of 11.66% and sold approximately $9.5 million of
such securitized loans to Bayview Financial Trading Group, L.P.
("Investor"). In connection with the securitization, the Company
retained servicing responsibilities and a $3.1 million subordinated
interest.  The Company will receive annual servicing fees of 0.5
percent of the outstanding balance, which the Company has assigned to
PSC, a related party of the Company, which will receive the 0.5 percent
servicing fees.  The Company has rights to future cash flows arising
after the Investor in the securitization trust has received the return
for which they are contracted, 9.25 percent.  The Investor and the
securitization trust have no recourse to the Company's other assets for
failure of debtors to pay when due.  The Company's retained interests
are subordinate to the Investor's interests.  The value of the
transferred mortgage loans is subject to credit and prepayment risks.

The Company did not record a servicing asset or liability for the
servicing rights retained as the fees that will be received will
fairly compensate the assigned servicer for costs to be incurred with
such service, and the Company will pay all associated fees directly to
PSC.

Gain or loss on the sale of the mortgage loans depends in part on the
previous carrying value of the loans involved in the transfer,
allocated between the assets sold and the retained interests based on
their relative fair market value at the date of transfer.  To obtain
fair values, quoted market prices are used if available.  However,
quotes were not available for the Company's retained interests, so the

                                    -6-

<Page>
Company estimated fair value based on the present value of future
expected cash flows using management's best estimate of the key
assumptions: credit losses, prepayment speeds and discount rates
commensurate with the risks involved.  The Company used an expected
weighted-average life of 5.5 years.  Based on expected credit losses
of 1.5%, prepayment speed of 18.2% and a discount rate of 11.0% no
gain or loss was recognized related to the sale of these mortgage
loans as the carrying value approximated the fair value at the date of
the securitization.

The sensitivity to an immediate 10% and 20% adverse change in the
assumptions used to measure fair value of the securitized mortgage
loans is as follows:

Prepayment speed assumption (annual rate):

Impact on fair value of 10% adverse change
$  9,000
Impact on fair value of 20% adverse change
  18,000


Expected credit losses (over remaining life of
loans):

Impact on fair value of 10% adverse change
  11,000
Impact on fair value of 20% adverse change
  23,000


Residual cash flows discount rate (annual):

Impact on fair value of 10% adverse change
 213,000
Impact on fair value of 20% adverse change
$418,000

These sensitivities are hypothetical and should be used with caution.
Changes in fair value based on a 10 percent variation in assumptions
generally cannot be extrapolated because the relationship of the
change in assumption to the change in fair value may not be linear.
Also, in this table, the effect of a variation in a particular
assumption on the fair value of the retained interest is calculated
without changing any other assumption; in reality, changes in one
factor may result in changes in another (for example, increases in
market interest rates may result in lower prepayments and increased
credit losses), which might magnify or counteract the sensitivities.


                                  -7-




<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 our 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 AND SIX MONTHS ENDED JUNE
30, 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 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.
<Table>
<Caption>
LOANS PURCHASED
During the six months ended June 30, 2004 we had 36 contracts for deed refinance
into residential mortgages and retained in our portfolio. The unpaid principal
balance of the new loans was $1,101,000. The following table records new loans
purchased excluding the refinanced properties:

                                  Three months                Six months
Loan Category                2004              2003    2004                 2003
-------------------------    -----------------------   -------------------------
<S>                          <C>          <C>          <C>           <C>
Residential Mortgages        0            4            3             12
Unpaid principal balance        --        $190,000     $124,000      $669,000

Contracts for Deed           0            6            0             7
Unpaid principal balance        --        $230,000        --         $386,000

Interim Mortgages
Net increase (decrease)
in principal                 $(443,000)   $8,693,000   $(1,230,000)  $14,451,000
--------------------------------------------------------------------------------
</Table>
                                    -8-


<Page>
     In April 2004, but effective January 1, 2004, we transferred our
residential mortgages and contracts for deed to a wholly-owned special
purpose entity called UMT LT Trust ('UMTLT'), a Maryland real estate
investment trust.

     On April 13, 2004, we, through UMTLT ('Seller') and another newly
created, wholly-owned subsidiary, UMT Funding Trust as the 'Depositor', a
Maryland real estate investment trust, completed a securitization of
$12,593,587 principal amount of mortgage loans through the private issuance
of $9,455,520 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 (the 'Mortgage Loans') with
an aggregate principal balance of $12,593,587 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.

     Upon receipt of the funds from Bayview we paid our line of credit down
by six million dollars. We intend to use the balance of the proceeds for
general corporate purposes.

     At June 30, 2004, our investment in Interim Mortgages decreased by
approximately 2% compared to year-end but increased 15% compared to
June 30, 2003. We attribute the decrease in Interim Mortgages during
the 2004 six-months since year-end to a reorganization of UMTH Lending,

                                   -9-

<page>
one of our major borrowers, during which time they converted to new
loan servicing software and experienced a change in management.  We
believe that we will see growth during the last two quarters of the
year in the UMTH Lending portfolio.

     As of June 30, 2004, our mortgage portfolio in the aggregate
consisted of 547 Residential Mortgages and 32 Contracts for Deed, held
in our subsidiary UMTLT. Two hundred seventy-five of the residential
mortgages are the Notes that make up the Bayview securitization. As of
the dates of purchase, the loans had an unpaid principal balance of
$26,474,000. The average loan in the portfolio had a blended interest
rate of 11.69%, a current annual yield of 11.94%, an investment-to-
value ratio of 83.46%, an unpaid principal balance of $46,000, with a
term remaining of 321 months.

     In addition, as of June 30, 2004, our interim mortgages portfolio
consisted of 1,045 loans with an average interest rate of 13.66% and a
current annual yield of 13.81%. Terms of the interim mortgage are less
than 12 months.

     As of June 30, 2003, our mortgage portfolio in the aggregate
consisted of 562 Residential Mortgages, 189 Contracts for Deed and 990
Interim Mortgages. As of the dates of purchase, the portfolio had an
unpaid principal balance of $98,177,000, and was purchased for a
discounted price of $97,461,000 (99.27% of the unpaid principal
balance). The average loan in the portfolio had a blended interest
rate of 12.98%, a current annual yield of 13.07%, an investment-to-
value ratio of 73.36%, an unpaid principal balance of $56,000, and a
term remaining of 291 months for Residential Mortgages and Contracts
for Deed and less than 12 months for Interim Mortgages.

----------------------------------------------------------------
                                            June 30,
Balances as of the purchase date    2004                    2003
----------------------------------------------------------------
Residential Mortgages               547             562
Unpaid principal balance            $25,061,000     $26,820,000

Contracts for Deed                  32              189
Unpaid principal balance            $1,413,000      $7,770,000

Interim Mortgages                   1,045           990
Unpaid principal balance            $69,978,000     $63,588,000
----------------------------------------------------------------

     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.

     We extended a revolving line-of-credit ('LOC') to an affiliate,
United Development Funding, L.P. ('UDF'), 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


                                  -10-
<Page>
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 June 30, 2004, based on the
Company's evaluation. We have increased our investment in UDF by 200%
over year end. We were not invested in UDF in the 2003 periods.

     During the three and six months ended June 30, 2004 and 2003 our
investments generated approximately $3,191,000 and $2,949,000 and
$6,495,000 and $5,726,000 of interest income, respectively, 8% and 13%
increases. The rise was attributed to mortgage investments purchased
between periods.

     The table below shows our major concentration of investments as a
percentage of our income producing assets excluding loans securitized
and held by others:
----------------------------------------------------------------
                                            June 30,
Loan Category                       2004               2003
---------------------           --------------------------------
Residential Mortgages##             16%                27%
Contracts for Deed                   1%                 9%
Interim Mortgages                   66%                64%
United Development Funding          17%                --
----------------------------------------------------------------
## Net assets in UMTLT after Bayview securitization

     Operating expenses for the three-month and six-month periods were
approximately $719,000 and $389,000 and $1,368,000 and $880,000,
respectively, 85% and 55% increases, respectively. Increases can be
primarily attributed to the following three categories:

Loan losses - $410,000 compared to $65,000 for the
comparable three months and $659,000 and $126,000 for the
comparable six-month periods.

Trust management fee - $193,000 and $175,000 for the
comparable three months and $403,000 and $338,000 for the
comparable six-month periods.

General and administrative - $91,000 and $75,000 for the
comparable three months and $216,000 and $200,000 for the
comparable six-month periods.

Interest expense - $2,000 and $38,000 for the comparable
three months and $29,000 and $141,000 for the comparable
six-month periods.

     Our loan loss reserves are calculated as approximately one-half
percent of book value of residential mortgages and contracts for deed
and approximately one-tenth percent of the book value of interim
mortgages at period end. 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 $255,000,000 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 $2,770,000
in losses, 5.22% 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 as needed.

     Our default rate as of June 30, 2004 and 2003 was 5.53% compared
to 3.98%. The most significant portion of our defaults are attributed
to residential mortgages and contracts for deed.

     Operating expenses, less interest expense, as a percentage of
income were 22.49% and 11.92% for the comparable three-month periods
and 20.62% and 12.92% for the comparable six-month periods, and
operating expenses as a percentage of invested assets were 0.64% and
0.37% and 0.66% and 0.36% for the comparable three and six-month
periods, respectively.

     Net income for the three and six months ended June 30, 2004 and
2003 was approximately $2,472,000 and $2,560,000, and $5,127,000 and
$4,845,000, a 3% decrease between quarters and a 6% increase between
six-month periods, respectively. Earnings per weighted average share
were $0.35 and $0.46 and $0.73 and $0.93, respectively, for the
comparable three and six months.

    Distributions to shareholders per share of beneficial interest
during the comparable periods were $0.1533 and $0.1533 per share per
month. We intend to lower our dividends during the next quarter to
reflect reduced earnings during the current quarter.



                                    -11-
<page>
CAPITAL RESOURCES AND LIQUIDITY FOR THE THREE MONTHS AND SIX MONTHS
ENDED June 30, 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.

--------------------------------------------------------------------
                                         For the Three Months ending
                                                  June 30,
                                           2004              2003
                                        ----------------------------
Shares issued                                55,800          677,000
Number of new shareholders                      --               308
Gross offering proceeds                 $ 1,116,000      $13,545,000
Net offering proceeds (after deduction
  of selling commissions and fees)      $   892,000      $11,889,000
Treasury shares purchased               $  (839,000)     $(1,101,000)
Principal receipts from Residential
  Mortgages and Contracts for Deed      $   925,000      $ 1,302,000
Principal receipts from
  Interim Mortgages                     $17,793,000      $15,154,000
Proceeds from the Bayview
  Securitization                        $ 9,455,520      $     --
Net borrowings (payments on)
  line-of-credit, payable               $     --         $(2,450,000)
---------------------------------------------------------------------

--------------------------------------------------------------------
                                         For the Six Months ending
                                                  June 30,
                                           2004              2003
                                        ----------------------------
Shares issued                               113,500        1,090,000
Number of new shareholders                      --               645
Gross offering proceeds                 $ 2,270,000      $21,805,000
Net offering proceeds (after deduction
  of selling commissions and fees)      $ 2,074,000      $19,099,000
Share repurchases                       $(1,480,000)     $(1,169,000)
Shares redeemed                         $(  611,000)           --
Principal receipts from Residential
  Mortgages and Contracts for Deed      $ 5,074,000      $ 2,982,000
Principal receipts from
  Interim Mortgages                     $34,902,000      $28,934,000
Proceeds from the Bayview
  Securitization                        $ 9,456,000      $     --
Net borrowings (payments on)
  line-of-credit, payable               $     --         $(3,695,000)
---------------------------------------------------------------------

   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.

                                 -12-

<Page>
     As of June 30, 2004, we had issued an aggregate of 7,586,922
shares of beneficial interest and repurchased into treasury, through
our Share Repurchase Plan, 520,864 shares. Total shares outstanding
were 7,066,058. Gross Offering proceeds were $151,672,220.

     With Trustee approval and effective July 11, 2004 we were in
the process of renewing our $10,000,000 credit facility with the
same lender. We have a two month extension of the pending approval
of a new line-of-credit. The line-of-credit was collateralized with
the assignment of certain Residential Mortgages.  Interest was
calculated at the bank's prime rate plus 0.50%.  We utilized the
credit facility to acquire and warehouse Mortgage Investments as
they become available. The outstanding balance of the line-of-credit
was reduced as new offering proceeds were received. Our line of
credit balance was zero at June 30, 2004 and $2,550,000 at June 30,
2003.

Item 3. Quantitative and Qualitative Disclosure About Market Risk.

No change.

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

                                  -13-
<Page>
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 June 30, 2004:

Shares issued                               113,490
Gross offering proceeds                  $2,269,800


Item 3. Defaults Upon Senior Debentures.

Not applicable.

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

None.

Item 5. Other Information.

None.


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

Form 8-K filed April 28, 2004 reporting the Bayview Securitization
Exhibit 31. Certification pursuant to Section 302 of the Sarbanes-Oxley
Act
Exhibit 32. Certification pursuant to Section 906 of the Sarbanes-Oxley
Act

                               -14-




<Page>
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:  August 4, 2004                 /S/Christine A. Griffin
                                         Christine A. Griffin
                                              President


                                  -15-


<Page>
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.


August 4, 2004

/s/ Christine Griffin
---------------------
Christine Griffin
President and Chief Executive Officer

                                   -16-

<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 June 30, 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 registrant as of and for the end of that
period.


August 4, 2004


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


                               -17-