----

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

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|                             |                                                                                                                                         | Page   |
|----------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------|--------|
| ITEM      1.                     | Financial      Statements                                                                                                                    |   |
|                             |                                                                                                                                         |   |
|                             | Consolidated      Balance Sheets as of September 30, 2008 (unaudited) and December 31,      2007                                             | 3      |
|                             | Consolidated      Statements of Income for the three months and nine months ended September      30, 2008 and September 30, 2007 (unaudited) | 4      |
|                             | Consolidated      Statements of Cash Flows for the nine months ended September 30, 2008 and      September 30, 2007 (unaudited)              | 5      |
|                             | Notes      to Consolidated Financial Statements (unaudited)                                                                                  | 6      |
|                             |                                                                                                                                         |   |
| ITEM      2.                     | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations                                        | 13     |
| ITEM      3.                     | Quantitative      and Qualitative Disclosures about Market Risk                                                                              | 24     |
| ITEM      4.                     | Controls      and Procedures                                                                                                                 | 24     |
|                             |
| PART      II - OTHER INFORMATION |
|                             |                                                                                                                                         |   |
| ITEM      1.                     | Legal      Proceedings                                                                                                                       | 25     |
| ITEM      2.                     | Unregistered      Sales of Equity Securities and Use of Proceeds                                                                             | 25     |
| ITEM      3.                     | Defaults      Upon Senior Securities                                                                                                         | 26     |
| ITEM      4.                     | Submission      of Matters to a Vote of Security Holders                                                                                     | 26     |
| ITEM      5.                     | Other      Information                                                                                                                       | 26     |
| ITEM      6.                     | Exhibits                                                                                                                                     | 26     |

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|                                                                                                                                                                                                     | September      30,    2008 |               |    | December      31, 2007 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------|--------------------|---------|------------------------|--------|
|                                                                                                                                                                                                     |                                           | (unaudited)        |    |                   |   | (audited) |   |
| Assets                                                                                                                                                                                                   |                                           |               |    |                   |   |
| Cash      and cash equivalents                                                                                                                                                                           | $                                              | 16,380,368         |    |                   | $      | 1,597,883 |   |
|                                                                                                                                                                                                     |                                           |               |    |                   |   |   |   |
|   Mortgage      investments:                                                                                                                                                                   |                                           |               |    |                   |   |   |   |
|   Investment      in trust receivable                                                                                                                                                          |                                           | 5,439,050          |    |                   |   | 5,428,453 |   |
|   Interim      mortgages, affiliates                                                                                                                                                           |                                           | 41,615,392         |    |                   |   | 41,641,334 |   |
|   Interim      mortgages                                                                                                                                                                       |                                           | 2,863,796          |    |                   |   | 12,251,098 |   |
|   Allowance      for loan losses                                                                                                                                                               |                                           | (3,639,475         | )       |                   |   | (2,343,163 | ) |
| Total      mortgage investments                                                                                                                                                                          |                                           | 46,278,763         |    |                   |   | 56,977,722 |   |
|                                                                                                                                                                                                     |                                           |               |    |                   |   |   |   |
| Line      of credit receivable, affiliate                                                                                                                                                                |                                           | 26,590,126         |    |                   |   | 25,083,216 |   |
| Accrued      interest receivable                                                                                                                                                                         |                                           | 791,660            |    |                   |   | 715,806 |   |
| Accrued      interest receivable, affiliate                                                                                                                                                              |                                           | 6,998,478          |    |                   |   | 4,822,377 |   |
| Recourse      obligations, affiliates                                                                                                                                                                    |                                           | 16,512,313         |    |                   |   | 16,035,790 |   |
| Residential      mortgages and contracts for deed                                                                                                                                                        |                                           | 245,311            |    |                   |   | 274,064 |   |
| Interim      mortgages foreclosed                                                                                                                                                                        |                                           | 4,663,815          |    |                   |   | 234,155 |   |
| Deficiency      note                                                                                                                                                                                     |                                           | 5,685,425          |    |                   |   | 1,725,754 |   |
| Deficiency      note, affiliate                                                                                                                                                                          |                                           | 4,758,246          |    |                   |   | 1,848,355 |   |
| Other      assets                                                                                                                                                                                        |                                           | 314,610            |    |                   |   | 364,574 |   |
| Total      assets                                                                                                                                                                                        | $                                              | 129,219,115        |    |                   | $      | 109,679,696 |   |
|                                                                                                                                                                                                     |                                           |               |    |                   |   |   |   |
| Liabilities      and Shareholders’ Equity                                                                                                                                                          |                                           |               |    |                   |   |   |   |
| Liabilities:                                                                                                                                                                                             |                                           |               |    |                   |   |   |   |
| Dividend      payable                                                                                                                                                                                    | $                                              | 649,690            |    |                   | $      | 827,670 |   |
| Accounts      payable and accrued liabilities                                                                                                                                                            |                                           | 321,801            |    |                   |   | 50,815 |   |
| Participation      payable, affiliate                                                                                                                                                                    |                                           | 23,699,040         |    |                   |   | - |   |
| Total      liabilities                                                                                                                                                                                   |                                           | 24,670,531         |    |                   |   | 878,485 |   |
|                                                                                                                                                                                                     |                                           |               |    |                   |   |   |   |
| Commitments      and contingencies                                                                                                                                                                       |                                           |               |    |                   |   |   |   |
|                                                                                                                                                                                                     |                                           |               |    |                   |   |   |   |
| Shareholders'      equity:                                                                                                                                                                               |                                           |               |    |                   |   |   |   |
| Shares      of beneficial interest; $0.01 par value; 100,000,000 shares authorized;      8,198,572 and 8,110,684 shares issued, respectively; and 6,495,815 and      6,649,916 outstanding, respectively |                                           |   81,724 |    |                   |   |   81,107 |   |
| Additional      paid-in capital                                                                                                                                                                          |                                           | 145,044,819        |    |                   |   | 143,287,664 |   |
| Advisor's      reimbursement                                                                                                                                                                             |                                           | 397,588            |    |                   |   | 397,588 |   |
| Cumulative      distributions in excess of earnings                                                                                                                                                      |                                           | (7,859,520         | )  |                   |   | (6,530,813 | ) |
|                                                                                                                                                                                                     |                                           | 137,664,611        |    |                   |   | 137,235,546 |   |
| Less      treasury stock of 1,702,757and 1,460,768 shares, respectively, at      cost                                                                                                                    |                                           | (33,116,027        | )  |                   |   | (28,434,335 | )  |
| Total      shareholders' equity                                                                                                                                                                          |                                           | 104,548,584        |    |                   |   | 108,801,211 |   |
| Total      liabilities and shareholders' equity                                                                                                                                                          | $                                              | 129,219,115        |    |                   | $      | 109,679,696 |   |

----

|                                              |   | Three      Months Ended September 30, |      | Nine      Months Ended September  30, |
|---------------------------------------------------|--------|---------------------------------------|-----------|-------------------------------------------------|
|                                              |   | 2008                                  |      | 2007                                            |   | 2008 |   | 2007 |
| Revenues:                                         |   |                                  |      |                                            |   |
| Interest      income derived from affiliates      |   | $                                     | 2,299,355 | $                                               | 3,710,739 | $ | 7,173,738 | $ | 11,053,889 |
| Interest      income                              |   |                                  | 458,253   |                                            | 699,744 |   | 1,807,466 |   | 2,185,362 |
|                                              |   |                                  | 2,757,608 |                                            | 4,410,483 |   | 8,981,204 |   | 13,239,251 |
| Expenses:                                         |   |                                  |      |                                            |   |   |   |   |   |
| Trust      administration fee                     |   |                                  | 266,076   |                                            | 254,352 |   | 811,534 |   | 625,081 |
| Loan      servicing fee                           |   |                                  | 1,431     |                                            | 1,313 |   | 4,164 |   | 7,365 |
| General      and administrative                   |   |                                  | 292,727   |                                            | 203,979 |   | 853,153 |   | 694,576 |
| Provision      for loan losses                    |   |                                  | 260,411   |                                            | 933,603 |   | 1,770,411 |   | 1,140,914 |
| Interest      expense                             |   |                                  | 289       |                                            | 547,342 |   | 289 |   | 1,785,653 |
|                                              |   |                                  | 820,934   |                                            | 1,940,589 |   | 3,439,551 |   | 4,253,589 |
|                                              |   |                                  |      |                                            |   |   |   |   |   |
| Net      income                                   |   | $                                     | 1,936,674 | $                                               | 2,469,894 | $ | 5,541,653 | $ | 8,985,662 |
|                                              |   |                                  |      |                                            |   |   |   |   |   |
| Net      income per share of beneficial interest  |   | $                                     | 0.30      | $                                               | 0.36 | $ | 0.84 | $ | 1.31 |
|                                              |   |                                  |      |                                            |   |   |   |   |   |
| Weighted      average shares outstanding          |   |                                  | 6,513,696 |                                            | 6,770,599 |   | 6,561,518 |   | 6,849,920 |
|                                              |   |                                  |      |                                            |   |   |   |   |   |
| Distributions      per weighted share outstanding |   | $                                     | 0.30      | $                                               | 0.37 | $ | 1.05 | $ | 1.09 |

----

|                                                                                                      |   | Nine      Months Ended September 30, |   |
|-----------------------------------------------------------------------------------------------------------|--------|--------------------------------------|--------|
|                                                                                                      |   | 2008                                 |   | 2007 |   |
| Operating      Activities                                                                                 |   |                                 |   |   |   |
| Net      income                                                                                           | $      | 5,541,653                            | $      | 8,985,662 |   |
| Adjustments      to reconcile net income to net cash provided                                             |   |                                 |   |   |   |
| by      operating activities:                                                                             |   |                                 |   |   |   |
| Provision for loan      losses                                                                            |   | 1,770,411                            |   | 1,140,914 |   |
| Depreciation and      amortization                                                                        |   | 1,035                                |   | 3,737 |   |
| Changes      in assets and liabilities:                                                                   |   |                                 |   |   |   |
| Accrued interest      receivable                                                                          |   | (2,431,804                           | )      | (1,217,812 | ) |
| Other    assets                                                                                           |   | 48,930                               |   | 120,839 |   |
| Accounts payable and accrued      liabilities                                                             |   | (21,411                              | )      | 725 |   |
| Net      cash provided by operating activities                                                            |   | 4,908,814                            |   | 9,034,065 |   |
|                                                                                                      |   |                                 |   |   |   |
| Investing      Activities                                                                                 |   |                                 |   |   |   |
| Investment      in trust receivable                                                                       |   | (8,389                               | )      | - |   |
| Principal      receipts on trust receivable                                                               |   | 55,904                               |   | - |   |
| Investment      in interim mortgages                                                                      |   | (898,407                             | )      | (3,248,231 | ) |
| Principal      receipts on interim mortgages                                                              |   | 1,637,002                            |   | 8,532,922 |   |
| Investments      in interim mortgages, affiliates                                                         |   | (4,513,823                           | )      | (42,393,970 | ) |
| Principal      receipts on interim mortgages, affiliates                                                  |   | 611,857                              |   | 37,261,733 |   |
| Investments      in residential mortgages and contracts for deed                                          |   | -                                    |   | (573,904 | ) |
| Principal      receipts on residential mortgages and contracts for    deed                                |   | 594,229                              |   | 631,478 |   |
| Line      of credit receivable, affiliate, net                                                            |   | 22,192,132                           |   | 2,359,423 |   |
| Receivable      from affiliate                                                                            |   | -                                    |   | 230,861 |   |
| Principal      receipts from (investments in) recourse obligations                                        |   | (2,553                               | )      | 645,678 |   |
| Net      cash provided by investing activities                                                            |   | 19,667,952                           |   | 3,445,990 |   |
|                                                                                                      |   |                                 |   |   |   |
| Financing      Activities                                                                                 |   |                                 |   |   |   |
| Proceeds      from issuance of shares of beneficial interest                                              |   | 1,757,771                            |   | 1,873,756 |   |
| Line      of credit payable, net                                                                          |   | -                                    |   | (4,379,405 | ) |
| Purchase      of treasury stock                                                                           |   | (4,681,692                           | )      | (5,468,337 | ) |
| Dividends                                                                                                 |   | (6,870,360                           | )      | (7,451,542 | ) |
| Net      cash used in financing activities                                                                |   | (9,794,281                           | )      | (15,425,528 | ) |
|                                                                                                      |   |                                 |   |   |   |
| Net      decrease in cash and cash equivalents                                                            |   | 14,782,485                           |   | (2,945,473 | ) |
| Cash      and cash equivalents at beginning of period                                                     |   | 1,597,883                            |   | 3,661,724 |   |
| Cash      and cash equivalents at end of period                                                           | $      | 16,380,368                           | $      | 716,251 |   |
|                                                                                                      |   |                                 |   |   |   |
| Supplemental      Disclosure of Cash Flow Information                                                     |   |                                 |   |   |   |
| Cash      paid during the period for interest                                                             | $      | 319                                  | $      | 1,785,653 |   |
| Non-Cash      Financing and Investing Activity                                                            |   |                                 |   |   |   |
| Transfers      of affiliate and non-affiliate loans to foreclosed properties or recourse      obligations | $      | 4,824,004                            | $      | 3,283,049 |   |
| Participation      receivable, affiliate                                                                  | $      | (23,699,040)                         | $      | - |   |
| Participation      payable, affiliate                                                                     | $      | 23,699,040                           | $      | - |   |
| Participation      accrued interest receivable, affiliate                                                 | $      | (115,291)                            | $      | - |   |
| Participation      accrued interest payable, affiliate                                                    | $      | 115,291                              | $      | - |   |

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

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

| 3. | Impact      of Recently Issued AccountingStandards |
|----|----------------------------------------------------|

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| Name                              | Initial      principal amount | Balance      at September 30, 2008 | Promissory      Note principle amount (2) |   | Units      pledged as security                                    | Units      distributed  in 2008 | C      Units remaining           | Nominal      Collateral Value (3) |
|-----------------------------------|-------------------------------|------------------------------------|-------------------------------------------|--------|-------------------------------------------------------------------|-------------------------------------------|----------------------------------|-----------------------------------|
| CRG                               | $2,725,442                    | $4,482,114                         | $4,300,000                                |   |  4,984      Class C                                          | 137                                       | 3,820      Class C               | $3,820,000                        |
| RAFC                              | $3,243,369                    | $6,586,384                         | $7,100,000                                |   |  6,739       Class C  & All EIA | 191                                       | 5,204      Class C & all EIA | $5,204,000                        |
| SCMI                              | $3,295,422                    | $3,485,326                         | $3,448,643                                |   |  4,000      Class C                                          | 105                                       | 2,584      Class C               | $2,584,000                        |
| RAF      / Wonder(1)              | $1,348,464                    | $1,958,489                         | $1,400,000                                |   |  3,870      Class C                                          | -                                         | 3,870      Class C               | $3,870,000                        |
| Wonder(1)Indemnification      (1) | n/a                           | n/a                                | n/a                                       |   |  $1,134,000                                                  | $48,000                                   | n/a                              | $1,019,000                        |
| EIA      Units                    | n/a                           | n/a                                | n/a                                       |   |   n/a                                                   | n/a                                       | n/a                              | $1,066,000                        |
| Totals                            | $10,612,697                   | $16,512,313                        | $16,248,643                               |   |                                                              |                                      |                             | $17,563,000                       |

| (1) | Wonder      is collateralized by an indemnification agreement from RMC in the amount      of $1,134,000, which includes the pledge of 3,870 C  Units. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The      CRG, SCMI, and Wonder balances at September 30, 2008 exceeded the stated      principal amount per their variable Secured Notes by approximately      $182,000, $37,000, and $558,000, respectively.  Per the terms of      the Secured Notes, the unpaid principal balance may be greater or less      than the initial principal amount of the note and is not considered an      event of default.  The rapid rate of liquidation of the      remaining portfolio of properties caused a more rapid increase in the      Unpaid Principal Balance (“UPB”) than the Company originally anticipated      and out paced the minimum principal reductions scheduled for the      loans. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Nominal      collateral value does not reflect pledge of D units of limited partnership      interest of UMTH held by WLL, Ltd. andRAFC. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------|

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| -   | UMT      Holdings.  This guaranty is limited to a maximum of $10,582,336      due under all of the Secured Notes and is  unsecured. |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| -   | WLL,      Ltd., an affiliate of CRG.  This guaranty is of all amounts due      under the Secured Note from CRG and is non-recourse and is secured by an      assignment of 2,492 Class C Units and 732 Class D units of limited      partnership interest of UMT Holdings held by WLL,  Ltd. |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | RMC.  This      guaranty is non-recourse, is limited to 50% of all amounts due under the      Secured Note from RAFC and is secured by an assignment of 3,870 Class C      units of limited partnership interest of UMT  Holdings. |
|---------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | Wonder.  Wonder      Funding obligations are evidenced by a note from RAFC (“RAFC Wonder Note”)      and are secured by a pledge of a certain Indemnification Agreement given      by UMTH to RAFC and assigned to UMT in the amount of $1,134,000, which      amount is included in the UMTH limited guarantee referenced      above. |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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----

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

|   | Cautionary Statement      Regarding Forward-LookingStatements |
|--------|---------------------------------------------------------------|

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----

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|   | · | reducing      our investment in interim loans dependent on sub-prime and Alt-A mortgage      products for repayment of our loan.   We funded 88% fewer      loans in the nine-months ended September 30, 2008, compared to the same      period in 2007.  Interim loan payoffs as a percentage of loans      originated during the nine-month periods in 2008 and 2007 were 42% and      100%, respectively. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | · | increasing      loss reserves for non-recourse interim and construction loans where full      collection of the indebtedness is notassured. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

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

|                                                   | Three      Months Ended   September 30, |   | Nine      Months      Ended         September  30, |
|--------------------------------------------------------|--------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|
|                                                   | 2008                                                   |   | 2007                                                                                                      |   | 2008 |   | 2007 |   |
| Interim      Mortgages (1)                             |                                                   |   |                                                                                                      |   |   |   |   |   |
| Interims      funded with affiliates                   | $583,000                                               |   | $7,357,000                                                                                                |   | $4,514,000 |   | $42,394,000 |   |
| Interims      funded with others                       | $219,000                                               |   | $320,000                                                                                                  |   | $898,000 |   | $3,284,000 |   |
|                                                   |                                                   |   |                                                                                                      |   |   |   |   |   |
| Number      of loans funded with affiliates            | 23                                                     |   | 90                                                                                                        |   | 122 |   | 538 |   |
| Number      of loans funded with others                | 65                                                     |   | 125                                                                                                       |   | 155 |   | 5 |   |
| Total      number funded                               | 88                                                     |   | 215                                                                                                       |   | 277 |   | 543 |   |
|                                                   |                                                   |   |                                                                                                      |   |   |   |   |   |
| Affiliate      interims – payments received      | $116,000                                               |   | $9,713,000                                                                                                |   | $612,000 |   | $37,262,000 |   |
| Other      interims – payments received          | -                                                      |   | $2,876,000                                                                                                |   | $1,637,000 |   | $8,533,000 |   |
|                                                   |                                                   |   |                                                                                                      |   |   |   |   |   |
| Number      of affiliated interims                     | 51                                                     |   | 163                                                                                                       |   | 108 |   | 571 |   |
| Number      of other interims                          | 3                                                      |   | 18                                                                                                        |   | 71 |   | 72 |   |
| Total      number                                      | 54                                                     |   | 181                                                                                                       |   | 179 |   | 643 |   |
|                                                   |                                                   |   |                                                                                                      |   |   |   |   |   |
| Average      interim mortgage loan funded during year  |  $9,000                                           |   |  $36,000                                                                                             |   | $20,000 |   | 84,000 |   |
| Remaining      term in months: less than               | 27                                                     |   | 39                                                                                                        |   | 27 |   | 39 |   |
| Yield      on investments                              | 14.17                                                  | %      | 13.69                                                                                                     | % | 13.54 | % | 13.19 | % |
|                                                   |                                                   |   |                                                                                                      |   |   |   |   |   |
| Line      of Credit, Affiliate                         |                                                   |   |                                                                                                      |   |   |   |   |   |
|  Draws      funded                                | -                                                      |   | -                                                                                                         |   | $1,777,000 |   | $1,750,000 |   |
|  Paid      down                                   | ($18,347,000                                           | )      | -                                                                                                         |   | ($24,874,000 | ) | ($4,109,000 | ) |
| Term      remaining                                    | 27                                                     |   | 39                                                                                                        |   | 27 |   | 39 |   |
| Yield      on investments                              | 11.41                                                  | %      | 14.35                                                                                                     | % | 13.21 | % | 13.94 | % |
|                                                   |                                                   |   |                                                                                                      |   |   |   |   |   |
| Lot      Banking Transactions (2)                      |                                                   |   |                                                                                                      |   |   |   |   |   |
| Draws      funded                                      | $55,000                                                |   | -                                                                                                         |   | $      1,940,000 |   | - |   |
| Paid      down                                         | ($485,000                                              | )      | -                                                                                                         |   | ($1,090,000 | ) | - |   |
| Remaining      terms                                   | 16      months                                         |   | -                                                                                                         |   | 16      months |   | - |   |
| Yield      on investments                              | 12.54                                                  | %      | -                                                                                                         |   | 12.49 | % | - |   |
|                                                   |                                                   |   |                                                                                                      |   |   |   |   |   |
| Investment      in Trust Receivable                    |                                                   |   |                                                                                                      |   |   |   |   |   |
| Number      purchased from other sources               | -                                                      |   | 1                                                                                                         |   | - |   | 13 |   |
|                                                   |                                                   |   |                                                                                                      |   |   |   |   |   |
| Aggregate      principal balance of new loans acquired | $439,000                                               |   | $278,000                                                                                                  |   | $1,253,000 |   | $      574,000 |   |
| Average      principal balance                         | $49,000                                                |   | $278,000                                                                                                  |   | $90,000 |   | $      44,200 |   |
| Remaining      term in months                          | 276                                                    |   | 234                                                                                                       |   | 276 |   | 234 |   |
| Current      yield                                     | 13.89                                                  | %      | 13.63                                                                                                     | % | 12.66 | % | 13.83 | % |

----

|                                                          | 2008        |   | 2007        |   |
|---------------------------------------------------------------|-------------|--------|-------------|--------|
| Interim      Mortgages                                        |        |   |        |   |
| Affiliates      unpaid principal balance                      | $41,615,000 |   | $66,439,000 |   |
| Unpaid      principal balance others                          | $2,864,000  |   | $12,541,000 |   |
| Total                                                         | $44,479,000 |   | $78,980,000 |   |
|                                                          |        |   |        |   |
| Interim      mortgages, foreclosed                            | $4,664,000  |   | $402,000    |   |
|                                                          |        |   |        |   |
| Number      of affiliate interim loans                        | 347         |   | 819         |   |
| Number      of unaffiliated interim loans                     | 37          |   | 169         |   |
|                                                          | 384         |   | 988         |   |
|                                                          |        |   |        |   |
| Average      unpaid principal balance (2)                     | $116,000    |   | $80,000     |   |
| Remaining      term in months: less than                      | 9           |   | 12          |   |
| Yield      on investments                                     | 13.54       | %      | 13.03       | %      |
|                                                          |        |   |        |   |
| Line      of Credit Receivable, Affiliate                     | $23,699,000 |   | $30,697,000 |   |
| Term      remaining in months                                 | 15          |   | 27          |   |
| Yield      on investment                                      | 13.21       | %      | 13.86       | %      |
|                                                          |        |   |        |   |
| Lot      Banking Transactions (1)                             | $2,891,000  |   | -           |   |
| Typical      terms, in months                                 | 18          |   | -           |   |
| Yield      on investment                                      | 12.49       | %      | -           |   |
|                                                          |        |   |        |   |
| Recourse      Obligations, Affiliates                         |        |   |        |   |
| Recourse      obligations                                     | $16,512,000 |   | $14,613,000 |   |
| Yield      on investment                                      | 6.08        | %      | 9.96        | %      |
|                                                          |        |   |        |   |
| Residential      mortgages and contracts for deed, foreclosed | $245,000    |   | -           |   |
|                                                          |        |   |        |   |
| Investment      in Trust Receivable                           |        |   |        |   |
| Loans      owned outright                                     | 68          |   | 63          |   |
| Rental      properties                                        | -           |   | 1           |   |
| Unpaid      principal balance loans/properties owned outright | $2,640,000  |   | $2,215,000  |   |
| Securitized      loans B piece balance                        | $2,799,000  |   | $3,116,000  |   |
| Term      remaining in months                                 | 276         |   | 233         |   |
| Yield      on investments                                     | 12.66       | %      | 12.95       | %      |

| (1)   | These      transactions are included in Lines of Credit, Affiliate in the      accompanying financial statements. |
|-----------------|-------------------------------------------------------------------------------------------------------------------|

| (2)   | The      calculation of average unpaid principal balance is adjusted to reflect the      number of additional interim loans associated with the Company’s      subordinate investment in UMTHLC loans, whose loan balance is included in      the outstanding affiliate unpaid principal balance  above. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Asset      Category:                                             | 2008 | 2007 |
|------------------------------------------------------------------|------|------|
| Interim      mortgages with affiliates                           | 47%  | 51%  |
| Interim      mortgages with others                               | 3%   | 10%  |
| UDF      lines of credit                                         | 26%  | 24%  |
| Recourse      obligations with affiliates                        | 18%  | 11%  |
| Trust      receivables – loans owned outright              | 3%   | 2%   |
| Trust      receivables – securitized “B” piece | 3%   | 2%   |

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|                                                   | 2008        |   | 2007        |   |
|--------------------------------------------------------|-------------|--------|-------------|--------|
| Shares      issued                                     | 87,888      |   | 93,688      |   |
| Dividend      reinvestment proceeds                    | $1,757,771  |   | $1,873,756  |   |
| Number      of shares returned to treasury             | 241,988     |   | 289,194     |   |
| Value      of shares repurchased                       | ($4,681,692 | )      | ($5,468,337 | )      |
| Principal      receipts (payments):                    |        |   |        |   |
| Residential mortgages and      contracts for deed      | $594,229    |   | $631,478    |   |
| Interim    loans                                       | $2,248,859  |   | $45,794,655 |   |
| Net borrowings –      bank line of credit   | -           |   | ($4,379,405 | )      |
| Payments received under line      of credit, affiliate | $22,192,132 |   | $2,359,423  |   |

----

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| Month     | Total      number of shares repurchased | Average      Purchase Price | Total      number of shares purchased as part of a publicly announced      plan | Total      number of shares purchased outside of plan |
|-----------|-----------------------------------------|-----------------------------|---------------------------------------------------------------------------------|-------------------------------------------------------|
| January   | 30,516                                  | $19.36                      | 24,989                                                                          | 5,526                                                 |
| February  | 40,756                                  | $19.62                      | 36,331                                                                          | 4,426                                                 |
| March     | 15,194                                  | $19.62                      | 13,558                                                                          | 1,636                                                 |
| April     | 26,079                                  | $19.26                      | 20,613                                                                          | 5,466                                                 |
| May       | 26,018                                  | $19.20                      | 20,086                                                                          | 5,932                                                 |
| June      | 25,626                                  | $19.55                      | 22,329                                                                          | 3,297                                                 |
| July      | 25,994                                  | $19.18                      | 19,975                                                                          | 6,019                                                 |
| August    | 26,139                                  | $19.13                      | 19,666                                                                          | 6,473                                                 |
| September | 25,667                                  | $19.16                      | 20,140                                                                          | 5,526                                                 |
| Totals    | 241,988                                 | $19.34                      | 197,687                                                                         | 44,301                                                |

|   | Exhibit      31.1 Certification of Chief Executive Officer pursuant to Section 302 of      the Sarbanes-Oxley Act of 2002 |
|--------|---------------------------------------------------------------------------------------------------------------------------|

|   | Exhibit      31.2 Certification of Chief Executive Officer pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002 |
|--------|---------------------------------------------------------------------------------------------------------------------------|

|   | Exhibit      10.1 Economic Interest Participation Agreement and Purchase Option between      United Mortgage Trust and UDF III dated September 19,  2008 |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Exhibit      10.2 Participation Agreement  between United Mortgage Trust and      UDF III dated September 30, 2008 |
|--------|------------------------------------------------------------------------------------------------------------------------------|

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|                         |                                                                            |                               |
|------------------------------|---------------------------------------------------------------------------------|------------------------------------|
|                         | UNITED      MORTGAGE TRUST                                                      |
|                    |                                                                       |                          |
| Date:      November 14, 2008 | By                                                                    | /s/ Christine      A. Griffin |
|                         | President,  Chief      Executive Officer and Chief Financial  Officer |

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