----

**UNITED        STATES**

**SECURITIES        AND EXCHANGE COMMISSION**

**Washington,        D.C. 20549**

**FORM        10-Q**

**000-32409**

**UNITED        MORTGAGE TRUST**

| **Maryland**                                                                    | **75-6493585**                                        |
|---------------------------------------------------------------------------------|-------------------------------------------------------|
| (State                  or other jurisdiction of incorporation or organization) | (I.R.S.                  Employer Identification No.) |

**1702        N. Collins Blvd, Suite 100**

**Richardson,        Texas 75080**

**(214)        237-9305**

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**UNITED        MORTGAGE TRUST**

**INDEX**

**PART        I - FINANCIAL INFORMATION**

|                                             |                                                                                                                                                                    | **Page** |
|--------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| **ITEM                  1.**                     | **Financial                  Statements**                                                                                                                               |     |
|                                             |                                                                                                                                                                    |     |
|                                             | Consolidated                  Balance Sheets as of September 30, 2007 (unaudited) and December                  31,                  2006                               | 3        |
|                                             | Consolidated                  Statements of Income for the three months and nine months ended                  September                  30, 2007 and 2006 (unaudited) | 4        |
|                                             | Consolidated                  Statements of Cash Flows for the nine months ended September 30,                  2007 and                  2006 (unaudited)              | 5        |
|                                             | Notes                  to Consolidated Financial Statements (unaudited)                                                                                                 | 6        |
|                                             |                                                                                                                                                                    |     |
| **ITEM                  2.**                     | **Management’s                  Discussion and Analysis of Financial Condition and Results of                  Operations**                                       | 9        |
| **ITEM                  3.**                     | **Quantitative                  and Qualitative Disclosures about Market Risk**                                                                                         | 20       |
| **ITEM                  4.**                     | **Controls                  and Procedures**                                                                                                                            | 20       |
|                                             |                                                                                                                                                                    |     |
| **PART                  II - OTHER INFORMATION** |
|                                             |                                                                                                                                                                    |     |
| **ITEM                  1.**                     | **Legal                  Proceedings**                                                                                                                                  | 21       |
| **ITEM                  1A.**                    | **Risk                  Factors**                                                                                                                                       | 21       |
| **ITEM                  2.**                     | **Unregistered                  Sales of Equity Securities and Use of Proceeds**                                                                                        | 21       |
| **ITEM                  3.**                     | **Defaults                  Upon Senior Securities**                                                                                                                    | 22       |
| **ITEM                  4.**                     | **Submission                  of Matters to a Vote of Security Holders**                                                                                                | 22       |
| **ITEM                  5.**                     | **Other                  Information**                                                                                                                                  | 22       |

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**UNITED        MORTGAGE TRUST**

**CONSOLIDATED        BALANCE SHEETS**

|                                                                                                                                                                                                                                                         |   | **September                  30, 2007** |        |   | **December                  31, 2006** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|-------------|--------|----------------------------------------|--------|
|                                                                                                                                                                                                                                                         |   | **(unaudited)**                         |        |   | **(audited)**                          |   |
| **Assets**                                                                                                                                                                                                                                                   |   |                                    |        |   |                                   |   |
| Cash                  and cash equivalents                                                                                                                                                                                                                   |   | $                                       | 716,251     |   |                                   | $      | 3,661,724 |   |
| Mortgage                  investments:                                                                                                                                                                                                                       |   |                                    |        |   |                                   |   |   |   |
|     Investment                  in trust receivable                                                                                                                                                                                      |   |                                    | 5,330,846   |   |                                   |   | 5,473,508 |   |
|     Interim                  loans, affiliates                                                                                                                                                                                           |   |                                    | 66,438,940  |   |                                   |   | 64,883,388 |   |
|     Interim                  loans                                                                                                                                                                                                       |   |                                    | 12,540,828  |   |                                   |   | 17,825,519 |   |
|    Allowance                  for loan losses                                                                                                                                                                                                 |   |                                    | (1,332,205  | )      |                                   |   | (1,011,975 | ) |
| Total                  mortgage investments                                                                                                                                                                                                                  |   |                                    | 82,978,409  |   |                                   |   | 87,170,440 |   |
|                                                                                                                                                                                                                                                         |   |                                    |        |   |                                   |   |   |   |
| Line                  of credit receivable, affiliate                                                                                                                                                                                                        |   |                                    | 30,696,766  |   |                                   |   | 33,056,189 |   |
| Accrued                  interest receivable                                                                                                                                                                                                                 |   |                                    | 537,604     |   |                                   |   | 390,315 |   |
| Accrued                  interest receivable, affiliate                                                                                                                                                                                                      |   |                                    | 4,401,727   |   |                                   |   | 3,331,204 |   |
| Receivable                  from affiliate                                                                                                                                                                                                                   |   |                                    | -           |   |                                   |   | 230,861 |   |
| Recourse                  obligations, affiliates                                                                                                                                                                                                            |   |                                    | 14,612,605  |   |                                   |   | 11,975,234 |   |
| Residential                  mortgages and contracts for deed foreclosed                                                                                                                                                                                     |   |                                    | 292,394     |   |                                   |   | 359,517 |   |
| Interim                  mortgages foreclosed                                                                                                                                                                                                                |   |                                    | 401,805     |   |                                   |   | 776,643 |   |
| Equipment,                  less accumulated depreciation of $25,856 and $22,120,                  respectively                                                                                                                                              |   |                                    | -           |   |                                   |   | 3,737 |   |
| Other                  assets                                                                                                                                                                                                                                |   |                                    | 636,544     |   |                                   |   | 757,382 |   |
| Total                  assets                                                                                                                                                                                                                                |   | $                                       | 135,274,105 |   |                                   | $      | 141,713,246 |   |
|                                                                                                                                                                                                                                                         |   |                                    |        |   |                                   |   |   |   |
| **Liabilities                  and Shareholders' Equity**                                                                                                                                                                                                    |   |                                    |        |   |                                   |   |   |   |
| Liabilities:                                                                                                                                                                                                                                                 |   |                                    |        |   |                                   |   |   |   |
|     Line                  of credit payable                                                                                                                                                                                              |   | $                                       | 23,597,236  |   |                                   | $      | 27,976,642 |   |
|     Dividend                  payable                                                                                                                                                                                                    |   |                                    | 835,813     |   |                                   |   | 806,000 |   |
|     Accounts                  payable and accrued liabilities                                                                                                                                                                            |   |                                    | 5,443       |   |                                   |   | 4,718 |   |
| Total                  liabilities                                                                                                                                                                                                                           |   |                                    | 24,438,492  |   |                                   |   | 28,787,360 |   |
|                                                                                                                                                                                                                                                         |   |                                    |        |   |                                   |   |   |   |
| Commitments                  and contingencies                                                                                                                                                                                                               |   |                                    | -           |   |                                   |   | - |   |
|                                                                                                                                                                                                                                                         |   |                                    |        |   |                                   |   |   |   |
| Shareholders'                  equity:                                                                                                                                                                                                                       |   |                                    |        |   |                                   |   |   |   |
| Shares                  of beneficial interest; $.01 par value; 100,000,000 shares authorized;                  8,079,111 and 7,985,423 shares issued, respectively; and 6,721,937                  and                  6,917,443 outstanding, respectively |   |                                    | 80,791      |   |                                   |   | 79,854 |   |
| Additional                  paid-in capital                                                                                                                                                                                                                  |   |                                    | 142,656,509 |   |                                   |   | 140,783,690 |   |
| Advisor's                  reimbursement                                                                                                                                                                                                                     |   |                                    | 397,588     |   |                                   |   | 397,588 |   |
|                                                                                                                                                                                                                                                         |   |                                    |        |   |                                   |   |   |   |
| Cumulative                  distributions in excess of earnings                                                                                                                                                                                              |   |                                    | (5,862,312  | )      |                                   |   | (7,366,618 | ) |
|                                                                                                                                                                                                                                                         |   |                                    |        |   |                                   |   |   |   |
|                                                                                                                                                                                                                                                         |   |                                    | 137,272,576 |   |                                   |   | 133,894,514 |   |
|                                                                                                                                                                                                                                                         |   |                                    |        |   |                                   |   |   |   |
| Less                  treasury stock of 1,357,174 and 1,067,980 shares, respectively,                  at                  cost                                                                                                                              |   |                                    | (26,436,963 | )      |                                   |   | (20,968,628 | ) |
|                                                                                                                                                                                                                                                         |   |                                    |        |   |                                   |   |   |   |
| Total                  shareholders' equity                                                                                                                                                                                                                  |   |                                    | 110,835,613 |   |                                   |   | 112,925,886 |   |
|                                                                                                                                                                                                                                                         |   |                                    |        |   |                                   |   |   |   |
| Total                  liabilities and shareholders' equity                                                                                                                                                                                                  |   | $                                       | 135,274,105 |   |                                   | $      | 141,713,246 |   |
|                                                                                                                                                                                                                                                         |   |                                    |        |   |                                   |   |   |   |
|                                                                                                                                                                                                                                                         |   |                                    |        |   |                                   |   |   |   |
| See                  accompanying notes to consolidated financial statements.                                                                                                                                                                                |   |                                    |        |   |                                   |   |   |   |

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**UNITED        MORTGAGE TRUST**

**CONSOLIDATED        STATEMENTS OF INCOME**

**(unaudited)**

|                                                          |   | **Three                  months ended September 30,** |      |   | **Nine                  months ended September 30,** |   |
|---------------------------------------------------------------|--------|-------------------------------------------------------|-----------|--------|------------------------------------------------------|--------|
|                                                          |   | **2007**                                              |      |   | **2006**                                             |   |   | **2007** |   |   | **2006** |   |
| **Revenues:**                                                 |   |                                                  |      |   |                                                 |   |   |   |   |   |   |   |
| Interest                  income derived from affiliates      |   | $                                                     | 3,710,739 |   |                                                 | $      | 3,380,556 |   |   | $ | 11,053,889 |   |   | $ | 9,477,248 |   |
| Interest                  income                              |   |                                                  | 699,744   |   |                                                 |   | 1,053,695 |   |   |   | 2,185,362 |   |   |   | 3,162,011 |   |
|                                                          |   |                                                  | 4,410,483 |   |                                                 |   | 4,434,251 |   |   |   | 13,239,251 |   |   |   | 12,639,259 |   |
| **Expenses:**                                                 |   |                                                  |      |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Trust                  administration fee                     |   |                                                  | 254,352   |   |                                                 |   | 214,714 |   |   |   | 625,081 |   |   |   | 641,916 |   |
| Loan                  servicing fee                           |   |                                                  | 1,313     |   |                                                 |   | 3,434 |   |   |   | 7,365 |   |   |   | 38,220 |   |
| Merger                  expense                               |   |                                                  | -         |   |                                                 |   | 11,975 |   |   |   | - |   |   |   | 1,039,606 |   |
| General                  and administrative                   |   |                                                  | 203,979   |   |                                                 |   | 392,934 |   |   |   | 694,576 |   |   |   | 796,363 |   |
| Provision                  for loan losses                    |   |                                                  | 933,603   |   |                                                 |   | 507,136 |   |   |   | 1,140,914 |   |   |   | 1,783,769 |   |
| Interest                  expense                             |   |                                                  | 547,342   |   |                                                 |   | 486,909 |   |   |   | 1,785,653 |   |   |   | 1,040,388 |   |
|                                                          |   |                                                  | 1,940,589 |   |                                                 |   | 1,617,102 |   |   |   | 4,253,589 |   |   |   | 5,340,262 |   |
|                                                          |   |                                                  |      |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income                                   |   | $                                                     | 2,469,894 |   |                                                 | $      | 2,817,149 |   |   | $ | 8,985,662 |   |   | $ | 7,298,997 |   |
|                                                          |   |                                                  |      |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income per share of beneficial interest  |   | $                                                     | 0.36      |   |                                                 | $      | 0.40 |   |   | $ | 1.31 |   |   | $ | 1.04 |   |
|                                                          |   |                                                  |      |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                  average shares outstanding          |   |                                                  | 6,770,599 |   |                                                 |   | 7,001,511 |   |   |   | 6,849,920 |   |   |   | 6,991,424 |   |
|                                                          |   |                                                  |      |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Distributions                  per weighted share outstanding |   | $                                                     | 0.37      |   |                                                 | $      | 0.35 |   |   | $ | 1.09 |   |   | $ | 1.06 |   |

----

**UNITED        MORTGAGE TRUST**

**CONSOLIDATED        STATEMENTS OF CASH FLOWS**

**(unaudited)**

|                                                                                                                |   | **For                  the Nine Months Ended** |        |
|---------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|-------------|
|                                                                                                                |   | **September                  30,**             |        |
|                                                                                                                |   | **2007**                                       |        |   | **2006** |   |
| **Cash                  Flows from Operating Activities:**                                                          |   |                                           |        |   |   |   |
| Net                  income                                                                                         |   | $                                              | 8,985,662   |   |   | $ | 7,298,997 |   |
| Adjustments                  to reconcile net income to net cash provided by operating                  activities: |   |                                           |        |   |   |   |   |   |
| Provision                  for loan losses                                                                          |   |                                           | 1,140,914   |   |   |   | 1,783,769 |   |
| Depreciation                                                                                                        |   |                                           | 3,737       |   |   |   | 10,411 |   |
| Net                  amortization of discount on mortgage investments                                               |   |                                           | -           |   |   |   | 166,404 |   |
| Changes                  in assets and liabilities:                                                                 |   |                                           |        |   |   |   |   |   |
| Accrued                  interest receivable                                                                        |   |                                           | (1,217,812  | ) |   |   | (1,393,911 | ) |
| Other                  assets                                                                                       |   |                                           | 120,839     |   |   |   | 1,305,570 |   |
| Accounts                  payable and accrued liabilities                                                           |   |                                           | 725         |   |   |   | (128,001 | ) |
| Net                  cash provided by operating activities                                                          |   |                                           | 9,034,065   |   |   |   | 9,043,239 |   |
|                                                                                                                |   |                                           |        |   |   |   |   |   |
| **Cash                  Flows from Investing Activities:**                                                          |   |                                           |        |   |   |   |   |   |
| Investment                  in residential mortgages and contracts for deed                                         |   |                                           | (573,904    | ) |   |   | (762,162 | ) |
| Principal                  receipts on residential mortgages and contracts for deed                                 |   |                                           | 631,478     |   |   |   | 1,491,000 |   |
| Investment                  in interim mortgage notes                                                               |   |                                           | (45,642,201 | ) |   |   | (70,452,168 | ) |
| Principal                  receipts on interim mortgage notes                                                       |   |                                           | 45,794,655  |   |   |   | 56,827,360 |   |
| Proceeds                  from recourse obligations, affiliates                                                     |   |                                           | 645,678     |   |   |   | 910,541 |   |
| Line-of-credit                  receivable, affiliate, net                                                          |   |                                           | 2,359,423   |   |   |   | (3,489,152 | ) |
| Receivable                  from affiliate                                                                          |   |                                           | 230,861     |   |   |   | 49,724 |   |
| Net                  cash provided by (used in) investing activities                                                |   |                                           | 3,445,990   |   |   |   | (15,424,857 | ) |
|                                                                                                                |   |                                           |        |   |   |   |   |   |
| **Cash                  Flows from Financing Activities:**                                                          |   |                                           |        |   |   |   |   |   |
| Proceeds                  from issuance of shares of beneficial interest                                            |   |                                           | 1,873,756   |   |   |   | 2,015,767 |   |
| Purchase                  of treasury stock                                                                         |   |                                           | (5,468,337  | ) |   |   | (4,077,608 | ) |
| Net                  borrowings (payments) on line-of-credit, payable                                               |   |                                           | (4,379,405  | ) |   |   | 11,140,462 |   |
| Dividends                                                                                                           |   |                                           | (7,451,542  | ) |   |   | (7,376,284 | ) |
| Net                  cash provided by (used in) financing activities                                                |   |                                           | (15,425,528 | ) |   |   | 1,702,337 |   |
|                                                                                                                |   |                                           |        |   |   |   |   |   |
| Net                  decrease in cash and cash equivalents                                                          |   |                                           | (2,945,473  | ) |   |   | (4,679,281 | ) |
| Cash                  and cash equivalents at beginning of period                                                   |   |                                           | 3,661,724   |   |   |   | 5,548,421 |   |
| Cash                  and cash equivalents at end of period                                                         |   | $                                              | 716,251     |   |   | $ | 869,140 |   |
|                                                                                                                |   |                                           |        |   |   |   |   |   |
| **Supplemental                  Disclosure of Cash Flow Information**                                               |   |                                           |        |   |   |   |   |   |
| Cash                  paid during the period for interest                                                           |   | $                                              | 1,785,653   |   |   | $ | 1,040,388 |   |
|                                                                                                                |   |                                           |        |   |   |   |   |   |
| **Supplemental                  Disclosure of Non-cash Information**                                                |   |                                           |        |   |   |   |   |   |
| Transfer                  of loans into recourse obligations, affiliates                                            |   | $                                              | 3,283,049   |   |   | $ | 3,180,403 |   |
|                                                                                                                |   |                                           |        |   |   |   |   |   |
| See                  accompanying notes to consolidated financial statements.                                       |   |                                           |        |   |   |   |   |   |

----

**NOTES        TO CONSOLIDATED FINANCIAL STATEMENTS**

**(unaudited)**

|   | **1.                  Nature of Business** |
|--------|--------------------------------------------|

| **2.** | **Basis                  of Presentation** |
|--------|--------------------------------------------|

**3.        Line of Credit Payable**

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**4.        Related Party Transactions**

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| **Name** | **Loan                  Balances** |
|----------|------------------------------------|
| CRG      | $4,053,800                         |
| RAFC     | $7,086,712                         |
| SCMI     | $3,472,093                         |

----

**5.        Subsequent Event**

|   | **ITEM                  2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS                  OF OPERATIONS** |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | **Cautionary                  Statement Regarding Forward-Looking                  Statements** |
|--------|-------------------------------------------------------------------------------------------------|

*In        light of these risks, uncertainties and assumptions, the forward-looking        events        discussed in this Form 10-Q may not occur. We undertake no obligation to        update        or revise our forward-looking statements, whether as a result of new        information, future events or otherwise.*

**RESULTS        OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND        2006**

**General        Investment Information**

----

**Material        Trends Affecting Our Business**

**10        Year Home Price Appreciation**

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----

**Executive        Summary**

----

|   | · | reducing                  our investment in interim loans dependent on sub-prime and Alt-A                  mortgage                  products for repayment of our loan.   We funded 63% fewer                  loans in the three-months ended September 30, 2007 compared to                  the same                  period in 2006   Interim loan payoffs as a percentage of                  loans originated during the three and nine-month comparable periods                  were                  174% and 107% in 2007 compared to 90% and 83% during the 2006                  periods.  Subsequent to September 30, 2007 we reduced our                  investment in Interim Loans by approximately 45%, from $42million                  to $23                  million. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | considering                  accepting a secured note for shortfalls from foreclosed properties                  to                  enable UMTHLC to efficiently manage past due and foreclosed accounts                  throughout the duration of the credit                  crisis. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | increasing                  loss reserves for non-recourse interim and construction loans where                  full                  collection of the indebtedness is not                  assured. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | reevaluating                  collateral value on specific loans deemed to be affected by current                  mortgage and housing environments and reserving for unsecured                  deficiencies. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Results        of Operations**

|   | · | Our                  portfolio concentrations have shifted over ten years of investing,                  and                  particularly since 2000, as we have sought adequate supplies of                  suitable                  loans in a changing real estate finance market. **The chart                  below** demonstrates the transition from a portfolio with                  a                  concentration on long term 1st                  lien single                  family loans to one comprised  primarily of first lien interim                  loans of 12 months or less in term for the purchase and renovation                  of                  single family homes and loans secured by 1st                  lien and                  subordinate single family lot development loans. We intend to continue                  to                  adapt to changes in the real estate finance market and thus the                  composition of our loan portfolio is likely to continue to evolve                  over                  time based on factors such as interest rates paid under various                  types of                  real estate loans, our assessment of the level of risk of the different                  types of loans, availability of loans, regulatory considerations                  and other                  factors. Subsequent to September 30, 2007 we reduced our investment                  in                  Interim Loans by approximately 45%, from $42million to $23                  million.  The chart below takes into consideration the                  subsequent reduction. Management estimates that investment in land                  development loans will grow to at least 35%, or to as much as 75%,                  of our                  portfolio by the end of 2008. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Loans        Purchased**

|                                                          | **Three                  months ended**                                                                                                                 | **Nine                  months ended**                                                                                                                  |
|---------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                          | **September                  30,**                                                                                                                      | **September                  30,**                                                                                                                      |
|                                                          | **2007**                                                                                                                                                | **2006**                                                                                                                                                | **2007** | **2006** |
| Interim                  Mortgages Purchased                  |                                                                                                                                                    |                                                                                                                                                    |   |   |
| Funded                  with affiliates                       |  $   7,357,000                                                                                                                      |  $  19,618,000                                                                                                                           |  $  42,394,000 |  $  53,395,000 |
| Funded                  with others                           |          320,000                                                                                           |       6,533,000                                                                                                           |        3,248,000 |      17,057,000 |
| Total                  funded                                 |  $   7,677,000                                                                                                                      |  $  26,151,000                                                                                                                           |  $  45,642,000 |  $  70,452,000 |
|                                                          |                                                                                                                                                    |                                                                                                                                                    |   |   |
| Number                  of loans funded with affiliates       |                   90                                          |                 320                                                     |                 538 |                 776 |
| Number                  of loans funded with others           |                    -                                     |                   74                                          |                     5 |                 118 |
| Total                  number of loans funded                 | 90                                                                                                                                                      |                 394                                                     |                 543 |                 894 |
|                                                          |                                                                                                                                                    |                                                                                                                                                    |   |   |
| Principal                  paid off with affiliates           | $       9,713,000                                                                                                    |  $      10,980,000                                                                                                   |  $      37,262,000 |  $      37,422,000 |
| Principal                  paid off with other                |            2,876,000                                                                             |          11,618,000                                                                                        |            8,533,000 |          19,405,000 |
| Total                  principal paid off                     |  $     12,589,000                                                                                                         |  $      22,598,000                                                                                                   |  $      45,795,000 |  $      56,827,000 |
|                                                          |                                                                                                                                                    |                                                                                                                                                    |   |   |
| Number                  of loans with affiliates paid off     |                      163                       |                      196                       |                      571 |                      661 |
| Number                  of loans with other paid off          |                        18            |                        81            |                        72 |                      159 |
| Total                  number of loans paid off               | 181                                                                                                                                                     |                      277                       |                      643 |                      820 |
|                                                          |                                                                                                                                                    |                                                                                                                                                    |   |   |
| Line                  of Credit, Affiliate                    |                                                                                                                                                    |                                                                                                                                                    |   |   |
| Draws                  funded                                 |  $                     -                  |  $        6,153,000                                                                                        |  $        1,750,000 |  $      15,562,000 |
| Paid                  down                                    |                         -       |          (3,900,000)                                                                                       |          (4,109,000) |        (12,073,000) |
| Net                  change                                   |  $                     -                  |  $        2,253,000                                                                                        |  $      (2,359,000) |  $        3,489,000 |
|                                                          |                                                                                                                                                    |                                                                                                                                                    |   |   |
| Investment                  in Trust Receivable               |                                                                                                                                                    |                                                                                                                                                    |   |   |
| Residential                  Mortgages and Contracts for Deed |                                                                                                                                                    |                                                                                                                                                    |   |   |
| Purchase                  price                               |  $          278,000                                                                              |  $           267,000                                                                        |  $           574,000 |  $           762,000 |
| Number                  purchased from other sources          |                          1 |                          5 |                        13 |                        16 |
| Aggregate                  principal balance                  |              278,000                                                                   |               267,000                                                             |               574,000 |               762,000 |
| Average                  principal balance                    |  $          278,000                                                                              |  $             53,400                                                             |  $             44,200 |  $             47,600 |

----

|                                                                      | **At                  September 30,**                                                                                |
|---------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------|
|                                                                      | **2007**                                                                                                             | **2006** |
| **Interim                  Mortgages Balances at September 30**           |                                                                                                                 |   |
| Affiliates                  unpaid principal balance                      | $66,438,940                                                                                                          | $60,177,157 |
| Unpaid                  principal balance others                          | $12,540,828                                                                                                          | $22,196,251 |
| Total                                                                     | $78,979,768                                                                                                          | $82,373,408 |
|                                                                      |                                                                                                                 |   |
| Interim                  foreclosed, other                                | $401,805                                                                                                             | $1,259,238 |
|                                                                      |                                                                                                                 |   |
| Number                  of affiliate interim loans                        |                819                        |                  819 |
| Number                  of unaffiliated interim loans                     |                  169            |                  268 |
|                                                                      |                  988            |               1,087 |
|                                                                      |                                                                                                                 |   |
| Average                  unpaid principal balance                         | $79,939                                                                                                              | $75,781 |
| Remaining                  term in months: less than                      | 12                                                                                                                   | 12 |
| Yield                  on investments                                     | 13.03%                                                                                                               | 13.60% |
|                                                                      |                                                                                                                 |   |
| **Line                  of Credit, Affiliate Balances at September 30**   | $30,696,766                                                                                                          | $33,806,189 |
| Term                  remaining in months                                 |                    27 |                    39 |
| Yield                  on investment                                      | 13.86%                                                                                                               | 13.86% |
|                                                                      |                                                                                                                 |   |
| **Recourse                  Obligations Balance at September 30**         |                                                                                                                 |   |
| Recourse                  obligations                                     | $14,612,605                                                                                                          | $11,534,095 |
| Yield                  on investment                                      | 9.96%                                                                                                                | 9.81% |
|                                                                      |                                                                                                                 |   |
| **Investment                  in Trust Receivable at September 30**       |                                                                                                                 |   |
| Loans                  owned outright                                     | 63                                                                                                                   | 46 |
| Rental                  properties                                        | 1                                                                                                                    | 2 |
| Unpaid                  principal balance loans/properties owned outright | $2,215,344                                                                                                           | $1,763,171 |
| Securitized                  loans B piece balance                        | $3,115,502                                                                                                           | $3,759,966 |
| Term                  remaining in months                                 | 233                                                                                                                  | 250 |
| Yield                  on investments                                     | 12.95%                                                                                                               | 13.98% |

|                                                      | **At                  September 30,** |
|-----------------------------------------------------------|---------------------------------------|
|                                                      | **2007**                              | **2006** |
|                                                      |                                  |   |
| Interims                  with affiliates                 | 51%                                   | 45% |
| Interims                  with others                     | 10%                                   | 17% |
| UDF                  line of credit                       | 24%                                   | 25% |
| Recourse                  obligations                     | 11%                                   | 9% |
| Trust                  receivable - loan owned outright   | 2%                                    | 1% |
| Trust                  receivable - securitized "B" piece | 2%                                    | 3% |

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*Trust        administration fee*

----

*General        and administrative*

*Interest        expense*

----

**CAPITAL        RESOURCES AND LIQUIDITY FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2007 AND        2006**

|                                                                                  | **Three                  Months Ended September 30,**                     | **Nine                  months ended September 30,** |
|---------------------------------------------------------------------------------------|---------------------------------------------------------------------------|------------------------------------------------------|
|                                                                                  | **2007**                                                                  | **2006**                                             | **2007** | **2006** |
| Shares                  issued in dividend reinvestment                               |           31,641        |        30,717     |          93,688 |        100,137 |
| Gross                  proceeds                                                       |         631,755                   |      627,767                |     1,873,755 |      2,015,767 |
| Share                  repurchases                                                    |   (3,076,337)                                                   | (1,001,608)                                          |   (5,468,337) |   (4,077,608) |
| Principal                  receipts from Residential Mortgages and Contracts for Deed |        364,478                         |      432,000                |        631,478 |      1,491,000 |
| Principal                  receipts from Interim Mortgages                            |   12,618,655                                                    | 23,593,360                                           |  45,794,655 |    56,827,360 |
| Funding                  (payments) on Line of Credit, Affiliate                      |             - | (2,253,152)                                          |     2,359,423 |   (3,489,152) |
| Net                  advances (payments) on Line of Credit payable                    |   (3,375,405)                                                   |   4,499,462                                |   (4,379,405) |    11,140,462 |

**Critical        Accounting Policies and Estimates**

----

**ITEM        3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET        RISK**

**ITEM        4. CONTROLS AND PROCEDURES**

**Evaluation        of Disclosure Controls and Procedures**

----

**Changes        in Internal Controls Over Financial Reporting**

**PART        II - OTHER INFORMATION**

**ITEM        1. LEGAL PROCEEDINGS**

**ITEM        1A. RISK FACTORS**

**ITEM        2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF        PROCEEDS**

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|   | **Total                  number of shares purchased**                                                                                            | **Average                  price per share** | **Total                  number of shares purchased as part of publicly announced                  plan**                                                   | **Total                  number of shares purchased outside of publicly announced                  plan**                                                   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                             |                                         |                                                                                                                                                        |                                                                                                                                                        |
| Jan    |                        17,803 | $18.41                                       |                        10,073            |                          7,730 |
| Feb    |                        20,551 | $18.22                                       |                        10,534            |                        10,017            |
| Mar    |                        12,223 | $19.08                                       |                          9,139 |                          3,084 |
| Apr    |                        15,409 | $19.01                                       |                        11,250            |                          4,158 |
| May    |                        13,793 | $19.37                                       |                        11,323            |                          2,470 |
| Jun    |                        52,095 | $17.21                                       |                        10,747            |                        41,347            |
| Jul    |                        40,859 | $19.71                                       |                        37,472            |                          3,387 |
| Aug    |                        55,218 | $19.67                                       |                        50,006            |                          5,211 |
| Sep    |                        61,244 | $19.35                                       |                        49,999            |                        11,245            |
|   |                                                                                                                                             |                                         |                                                                                                                                                        |                                                                                                                                                        |
|   |                      289,195            | $18.91                                       |                      200,543                       |                        88,649            |

**ITEM        3. DEFAULTS UPON SENIOR SECURITIES**

**ITEM        4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**

**ITEM        5. OTHER INFORMATION**

**ITEM        6. EXHIBITS**

|   | Exhibit                  31. Certification of Chief Executive Officer pursuant to Section                  302 of                  the Sarbanes-Oxley Act of 2002 |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Exhibit                  32. Certification of Chief Executive Officer pursuant to Section                  906 of                  the Sarbanes-Oxley Act of 2002 |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**SIGNATURE**

|                                            |                                                                          |                                             |
|-------------------------------------------------|-------------------------------------------------------------------------------|--------------------------------------------------|
|                                            | **UNITED                    MORTGAGE TRUST**                                  |
|                                       |                                                                     |                                        |
| Date: November                    14, 2007 | By                                                                  | /s/ Christine                    A. Griffin |
|                                            | *President                    and Chief Executive                    Officer* |

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