**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 June 30, 2007 (unaudited) and December 31,                2006                                             | 1        |
|                                           | Consolidated                Statements of Income for the three months and six months ended June                30,                2007 and 2006 (unaudited) | 2        |
|                                           | Consolidated                Statements of Cash Flows for the six months ended June 30, 2007 and                2006                (unaudited)              | 3        |
|                                           | Notes                to Consolidated Financial Statements (unaudited)                                                                                       | 4        |
|                                           |                                                                                                                                                        |     |
| **ITEM                2.**                     | **Management’s                Discussion and Analysis of Financial Condition and Results of                Operations**                               | 6        |
| **ITEM                3.**                     | **Quantitative                and Qualitative Disclosures about Market Risk**                                                                               | 12       |
| **ITEM                4.**                     | **Controls                and Procedures**                                                                                                                  | 12       |
|                                           |                                                                                                                                                        |     |
| **PART                II - OTHER INFORMATION** |
|                                           |                                                                                                                                                        |     |
| **ITEM                1.**                     | **Legal                Proceedings**                                                                                                                        | 13       |
| **ITEM                1A.**                    | **Risk                Factors**                                                                                                                             | 13       |
| **ITEM                2.**                     | **Unregistered                Sales of Equity Securities and Use of Proceeds**                                                                              | 13       |
| **ITEM                3.**                     | **Defaults                Upon Senior Securities**                                                                                                          | 14       |
| **ITEM                4.**                     | **Submission                of Matters to a Vote of Security Holders**                                                                                      | 14       |
| **ITEM                5.**                     | **Other                Information**                                                                                                                        | 14       |

**Page          i**

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**UNITED      MORTGAGE TRUST**

**CONSOLIDATED      BALANCE SHEETS**

|                                                                                                                                                                                                                                                                                                                       |   | **June                30, 2007** |        |   | **December                31, 2006** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|-------------|--------|--------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                       |   | **(unaudited)**                  |        |   | **(audited)**                        |   |
| **Assets**                                                                                                                                                                                                                                                                                                                 |   |                             |        |   |                                 |   |
| Cash                and cash equivalents                                                                                                                                                                                                                                                                                   |   | $                                | 629,439     |   |                                 | $      | 3,661,724 |   |
| Mortgage                investments:                                                                                                                                                                                                                                                                                       |   |                             |        |   |                                 |   |   |   |
|     Investment                in trust receivable                                                                                                                                                                                                                                                      |   |                             | 5,424,043   |   |                                 |   | 5,473,508 |   |
|     Interim                loans, affiliates                                                                                                                                                                                                                                                           |   |                             | 69,885,908  |   |                                 |   | 64,883,388 |   |
|     Interim                loans                                                                                                                                                                                                                                                                       |   |                             | 15,095,953  |   |                                 |   | 17,825,519 |   |
|    Allowance                for loan losses                                                                                                                                                                                                                                                                 |   |                             | (780,864    | )      |                                 |   | (1,011,975 | ) |
|                                                                                                                                                                                                                                                                                                                       |   |                             |        |   |                                 |   |   |   |
| Total                mortgage investments                                                                                                                                                                                                                                                                                  |   |                             | 89,625,040  |   |                                 |   | 87,170,440 |   |
|                                                                                                                                                                                                                                                                                                                       |   |                             |        |   |                                 |   |   |   |
| Line                of credit receivable, affiliate                                                                                                                                                                                                                                                                        |   |                             | 30,696,766  |   |                                 |   | 33,056,189 |   |
| Accrued                interest receivable                                                                                                                                                                                                                                                                                 |   |                             | 376,797     |   |                                 |   | 390,315 |   |
| Accrued                interest receivable, affiliate                                                                                                                                                                                                                                                                      |   |                             | 4,222,233   |   |                                 |   | 3,331,204 |   |
| Receivable                from affiliate                                                                                                                                                                                                                                                                                   |   |                             | 40,717      |   |                                 |   | 230,861 |   |
| Recourse                obligations, affiliates                                                                                                                                                                                                                                                                            |   |                             | 14,267,289  |   |                                 |   | 11,975,234 |   |
| Residential                mortgages and contracts for deed foreclosed                                                                                                                                                                                                                                                     |   |                             | 287,609     |   |                                 |   | 359,517 |   |
| Interim                mortgages foreclosed                                                                                                                                                                                                                                                                                |   |                             | 380,497     |   |                                 |   | 776,643 |   |
| Equipment,                less accumulated depreciation of $23,988 and $22,120,                respectively                                                                                                                                                                                                                |   |                             | 1,869       |   |                                 |   | 3,737 |   |
| Other                assets                                                                                                                                                                                                                                                                                                |   |                             | 692,969     |   |                                 |   | 757,382 |   |
|                                                                                                                                                                                                                                                                                                                       |   |                             |        |   |                                 |   |   |   |
| Total                assets                                                                                                                                                                                                                                                                                                |   | $                                | 141,221,225 |   |                                 | $      | 141,713,246 |   |
|                                                                                                                                                                                                                                                                                                                       |   |                             |        |   |                                 |   |   |   |
| **Liabilities                and Shareholders' Equity**                                                                                                                                                                                                                                                                    |   |                             |        |   |                                 |   |   |   |
| Liabilities:                                                                                                                                                                                                                                                                                                               |   |                             |        |   |                                 |   |   |   |
|     Line                of credit payable                                                                                                                                                                                                                                                              |   | $                                | 26,972,623  |   |                                 | $      | 27,976,642 |   |
|     Dividend                payable                                                                                                                                                                                                                                                                    |   |                             | 836,528     |   |                                 |   | 806,000 |   |
|     Accounts                payable and accrued liabilities                                                                                                                                                                                                                                            |   |                             | 80,886      |   |                                 |   | 4,718 |   |
|                                                                                                                                                                                                                                                                                                                       |   |                             |        |   |                                 |   |   |   |
| Total                liabilities                                                                                                                                                                                                                                                                                           |   |                             | 27,890,037  |   |                                 |   | 28,787,360 |   |
|                                                                                                                                                                                                                                                                                                                       |   |                             |        |   |                                 |   |   |   |
| Commitments                and contingencies                                                                                                                                                                                                                                                                               |   |                             | -           |   |                                 |   | - |   |
|                                                                                                                                                                                                                                                                                                                       |   |                             |        |   |                                 |   |   |   |
| Shareholders'                equity:                                                                                                                                                                                                                                                                                       |   |                             |        |   |                                 |   |   |   |
|     Shares                of beneficial interest; $.01 par value; 100,000,000 shares                authorized;    8,047,470                and 7,985,423 shares issued, respectively; and 6,847,617 and    6,917,443                outstanding, respectively |   |                             | 80,475      |   |                                 |   | 79,854 |   |
| Additional                paid-in capital                                                                                                                                                                                                                                                                                  |   |                             | 142,025,231 |   |                                 |   | 140,783,690 |   |
| Advisor's                reimbursement                                                                                                                                                                                                                                                                                     |   |                             | 397,588     |   |                                 |   | 397,588 |   |
| Cumulative                distributions in excess of earnings                                                                                                                                                                                                                                                              |   |                             | (5,811,715  | )      |                                 |   | (7,366,618 | ) |
|                                                                                                                                                                                                                                                                                                                       |   |                             |        |   |                                 |   |   |   |
|                                                                                                                                                                                                                                                                                                                       |   |                             | 136,691,579 |   |                                 |   | 133,894,514 |   |
|                                                                                                                                                                                                                                                                                                                       |   |                             |        |   |                                 |   |   |   |
| Less                treasury stock of 1,199,853 and 1,067,980 shares, respectively, at                cost                                                                                                                                                                                                                 |   |                             | (23,360,391 | )      |                                 |   | (20,968,628 | ) |
|                                                                                                                                                                                                                                                                                                                       |   |                             |        |   |                                 |   |   |   |
| Total                shareholders' equity                                                                                                                                                                                                                                                                                  |   |                             | 113,331,188 |   |                                 |   | 112,925,886 |   |
|                                                                                                                                                                                                                                                                                                                       |   |                             |        |   |                                 |   |   |   |
| Total                liabilities and shareholders' equity                                                                                                                                                                                                                                                                  |   | $                                | 141,221,225 |   |                                 | $      | 141,713,246 |   |
|                                                                                                                                                                                                                                                                                                                       |   |                             |        |   |                                 |   |   |   |
|                                                                                                                                                                                                                                                                                                                       |   |                             |        |   |                                 |   |   |   |
| See                accompanying notes to consolidated financial statements.                                                                                                                                                                                                                                                |   |                             |        |   |                                 |   |   |   |

**Page          1**

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**UNITED      MORTGAGE TRUST**

**CONSOLIDATED      STATEMENTS OF INCOME**

**(unaudited)**

|                                                        |   | **Three                months ended June 30,** |      |   | **Six                months ended June 30,** |   |
|-------------------------------------------------------------|--------|------------------------------------------------|-----------|--------|----------------------------------------------|--------|
|                                                        |   | **2007**                                       |      |   | **2006**                                     |   |   | **2007** |   |   | **2006** |   |
| **Revenues:**                                               |   |                                           |      |   |                                         |   |   |   |   |   |   |   |
| Interest                income derived from affiliates      |   | $                                              | 3,590,285 |   |                                         | $      | 3,082,143 |   |   | $ | 7,343,150 |   |   | $ | 6,096,692 |   |
| Interest                income                              |   |                                           | 723,140   |   |                                         |   | 1,044,311 |   |   |   | 1,485,618 |   |   |   | 2,108,316 |   |
|                                                        |   |                                           | 4,313,425 |   |                                         |   | 4,126,454 |   |   |   | 8,828,768 |   |   |   | 8,205,008 |   |
| **Expenses:**                                               |   |                                           |      |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Trust                administration fee                     |   |                                           | 188,278   |   |                                         |   | 186,118 |   |   |   | 370,729 |   |   |   | 446,713 |   |
| Loan                servicing fee                           |   |                                           | 3,127     |   |                                         |   | 11,391 |   |   |   | 6,052 |   |   |   | 34,786 |   |
| Merger                expense                               |   |                                           | -         |   |                                         |   | 1,027,631 |   |   |   | - |   |   |   | 1,027,631 |   |
| General                and administrative                   |   |                                           | 288,159   |   |                                         |   | 137,127 |   |   |   | 490,597 |   |   |   | 383,917 |   |
| Provision                for loan losses                    |   |                                           | -         |   |                                         |   | 489,258 |   |   |   | 207,311 |   |   |   | 1,276,633 |   |
| Interest                expense                             |   |                                           | 828,317   |   |                                         |   | 273,444 |   |   |   | 1,238,311 |   |   |   | 553,479 |   |
|                                                        |   |                                           | 1,307,881 |   |                                         |   | 2,124,969 |   |   |   | 2,313,000 |   |   |   | 3,723,159 |   |
|                                                        |   |                                           |      |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Net                income                                   |   | $                                              | 3,005,544 |   |                                         | $      | 2,001,485 |   |   | $ | 6,515,768 |   |   | $ | 4,481,849 |   |
|                                                        |   |                                           |      |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Net                income per share of beneficial interest  |   | $                                              | 0.44      |   |                                         | $      | 0.28 |   |   | $ | 0.95 |   |   | $ | 0.63 |   |
|                                                        |   |                                           |      |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                average shares outstanding          |   |                                           | 6,867,182 |   |                                         |   | 7,084,292 |   |   |   | 6,882,925 |   |   |   | 7,077,960 |   |
|                                                        |   |                                           |      |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Distributions                per weighted share outstanding |   | $                                              | 0.36      |   |                                         | $      | 0.35 |   |   | $ | 0.72 |   |   | $ | 0.70 |   |

**Page          2**

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**UNITED      MORTGAGE TRUST**

| **CONSOLIDATED                STATEMENTS OF CASH FLOWS**                                                        |   |
|-----------------------------------------------------------------------------------------------------------------|--------|
| **(unaudited)**                                                                                                 |   |
|                                                                                                            |   | **For                the Six Months Ended** |   |
|                                                                                                            |   | **June                30,** |   |
|                                                                                                            |   | **2007** |   |   | **2006** |   |
| **Cash                Flows from Operating Activities:**                                                        |   |   |   |   |   |   |
| Net                income                                                                                       |   | $ | 6,515,768 |   |   | $ | 4,481,849 |   |
| Adjustments                to reconcile net income to net cash provided by operating                activities: |   |   |   |   |   |   |   |   |
| Provision                for loan losses                                                                        |   |   | 207,311 |   |   |   | 1,276,633 |   |
| Depreciation                                                                                                    |   |   | 1,868 |   |   |   | 1,777 |   |
| Net                amortization of discount on mortgage investments                                             |   |   | - |   |   |   | 57,532 |   |
| Write-off                merger costs                                                                           |   |   | - |   |   |   | 1,027,631 |   |
| Changes                in assets and liabilities:                                                               |   |   |   |   |   |   |   |   |
| Accrued                interest receivable                                                                      |   |   | (877,511 | ) |   |   | (913,634 | ) |
| Other                assets                                                                                     |   |   | 64,413 |   |   |   | 193,926 |   |
| Accounts                payable and accrued liabilities                                                         |   |   | 76,168 |   |   |   | (114,583 | ) |
| Net                cash provided by operating activities                                                        |   |   | 5,988,017 |   |   |   | 6,011,131 |   |
|                                                                                                            |   |   |   |   |   |   |   |   |
| **Cash                Flows from Investing Activities:**                                                        |   |   |   |   |   |   |   |   |
| Investment                in residential mortgages and contracts for deed                                       |   |   | (295,975 | ) |   |   | (494,654 | ) |
| Principal                receipts on residential mortgages and contracts for deed                               |   |   | 267,041 |   |   |   | 1,058,829 |   |
| Investment                in interim mortgage notes                                                             |   |   | (37,965,039 | ) |   |   | (44,301,015 | ) |
| Principal                receipts on interim mortgage notes                                                     |   |   | 33,205,946 |   |   |   | 33,234,318 |   |
| Proceeds                from recourse obligations, affiliates                                                   |   |   | 302,116 |   |   |   | 1,208,260 |   |
| Line-of-credit                receivable, affiliate, net                                                        |   |   | 2,359,423 |   |   |   | (1,236,181 | ) |
| Receivable                from affiliate                                                                        |   |   | 190,144 |   |   |   | (6,127 | ) |
| Net                cash used in investing activities                                                            |   |   | (1,936,344 | ) |   |   | (10,536,570 | ) |
|                                                                                                            |   |   |   |   |   |   |   |   |
| **Cash                Flows from Financing Activities:**                                                        |   |   |   |   |   |   |   |   |
| Proceeds                from issuance of shares of beneficial interest                                          |   |   | 1,242,160 |   |   |   | 1,388,478 |   |
| Purchase                of treasury stock                                                                       |   |   | (2,391,762 | ) |   |   | (3,076,292 | ) |
| Net                borrowings (payments) on line-of-credit, payable                                             |   |   | (1,004,019 | ) |   |   | 6,641,222 |   |
| Dividends                                                                                                       |   |   | (4,930,337 | ) |   |   | (4,960,364 | ) |
| Net                cash used in financing activities                                                            |   |   | (7,083,958 | ) |   |   | (6,956 | ) |
|                                                                                                            |   |   |   |   |   |   |   |   |
| Net                decrease in cash and cash equivalents                                                        |   |   | (3,032,285 | ) |   |   | (4,532,395 | ) |
| Cash                and cash equivalents at beginning of period                                                 |   |   | 3,661,724 |   |   |   | 5,548,421 |   |
| Cash                and cash equivalents at end of period                                                       |   | $ | 629,439 |   |   | $ | 1,016,026 |   |
|                                                                                                            |   |   |   |   |   |   |   |   |
| **Supplemental                Disclosure of Cash Flow Information**                                             |   |   |   |   |   |   |   |   |
| Cash                paid during the period for interest                                                         |   | $ | 1,238,311 |   |   | $ | 553,479 |   |
|                                                                                                            |   |   |   |   |   |   |   |   |
| **Supplemental                Disclosure of Non-cash Information**                                              |   |   |   |   |   |   |   |   |
| Transfer                of loans into recourse obligations, affiliates                                          |   | $ | 2,594,172 |   |   | $ | 3,180,403 |   |
|                                                                                                            |   |   |   |   |   |   |   |   |
|                                                                                                            |   |   |   |   |   |   |   |   |
| See                accompanying notes to consolidated financial statements.                                     |   |   |   |   |   |   |   |   |

**Page          3**

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**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**(unaudited)**

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

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

**3.      Line of Credit Payable**

**4.      Related Party Transactions**

**Page          4**

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**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)**

**(unaudited)**

**Page          5**

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**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)**

**(unaudited)**

|                                       |   | **Three                months ended June 30,** |   |   | **Six                months ended June 30,** |   |
|--------------------------------------------|--------|------------------------------------------------|--------|--------|----------------------------------------------|--------|
|                                       |   | **2007**                                       |   |   | **2006**                                     |   |   | **2007** |   |   | **2006** |   |
| **Loan                Servicing fees**     |   | $                                              | 3,127  |   |                                         | $      | 11,391 |   |   | $ | 5,851 |   |   | $ | 28,706 |   |
| **Real                estate commissions** |   | $                                              | 4,380  |   |                                         |   | - |   |   | $ | 12,394 |   |   | $ | 6,080 |   |

|                                       |   | **Three                months ended June 30,** |   |   | **Six                months ended June 30,** |   |
|--------------------------------------------|--------|------------------------------------------------|--------|--------|----------------------------------------------|--------|
|                                       |   | **2007**                                       |   |   | **2006**                                     |   |   | **2007** |   |   | **2006** |   |
| **Loan                Servicing fees**     |   |                                           | -      |   |                                         | $      | 7,957 |   |   |   | - |   |   | $ | 15,910 |   |
| **Real                estate commissions** |   | $                                              | 200    |   |                                         | $      | 8,800 |   |   |   | - |   |   | $ | 10,200 |   |

|   | **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 SIX MONTHS ENDED June 30, 2007 AND        2006**

**General        Investment Information**

**Page              6**

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**Executive        Summary**

***Sub-prime        Mortgages***

***Sub-prime        Mortgages Defined –**Sub-prime mortgages are generally defined as        long-term mortgages made to borrowers with blemished credit histories (low        credit scores) and relatively heavy debt loads. Most of the recent deterioration        in the credit quality of the sub-prime market is found in interest-only loans        and payment-option ARMs where little or no documentation of borrower        income/assets was provided and where investors/speculators had a heavy presence        during the housing boom.*

*(Source:        3/26/07 Sieder Report)*

*Results of Operation*

**Results        of Operations**

**The chart        below**

**Page            7**

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**Loans      Purchased**

|                                                    | **Three                months ended**                         | **Six                months ended** |
|---------------------------------------------------------|---------------------------------------------------------------|-------------------------------------|
|                                                    | **June                30,**                                   | **June                30,**         |
|                                                    | **2007**                                                      | **2006**                            | **2007** | **2006** |
| **Interim                Mortgages Purchased**          |                                                          |                                |   |   |
| Funded                with affiliates                   | $13,981,000                                                   | $15,173,000                         | $35,037,000 | $33,777,000 |
| Funded                with others                       | $763,000                                                      | $4,651,000                          | $2,928,000 | $10,524,000 |
| Total                funded                             | $14,744,000                                                   | $19,824,000                         | $37,965,000 | $44,301,000 |
|                                                    |                                                          |                                |   |   |
| Number                of loans funded with affiliates   | 174                                                           | 270                                 | 448 | 456 |
| Number                of loans funded with others       | -                                                             | 19                                  | 5 | 44 |
| Total                number of loans funded             | 174                                                           | 289                                 | 453 | 500 |
|                                                    |                                                          |                                |   |   |
| Principal                paid off with affiliates       | $10,369,000                                                   | $11,597,000                         | $27,549,000 | $26,442,000 |
| Principal                paid off with other            | $1,534,000                                                    | $4,007,000                          | $5,657,000 | $7,787,000 |
| Total                principal paid off                 | $11,903,000                                                   | $15,604,000                         | $33,206,000 | $34,229,000 |
|                                                    |                                                          |                                |   |   |
| Number                of loans with affiliates paid off | 203                                                           | 214                                 | 408 | 465 |
| Number                of loans with other paid off      | 17                                                            | 45                                  | 54 | 78 |
| Total                number of loans paid off           | 220                                                           | 259                                 | 462 | 543 |
|                                                    |                                                          |                                |   |   |
| **Line                of Credit, Affiliate**            |                                                          |                                |   |   |
|  Draws                funded                       |           - | $4,300,000                          | $1,750,000 | $9,409,000 |
|  Paid                down                          | ($3,409,000)                                                  | ($2,650,000)                        | ($4,109,000) | ($8,173,000) |
| Net                change                               |     ($3,409,000)                          | $1,650,000                          | ($2,359,000) | $1,236,000 |

**Page          8**

----

|  **Loans Purchased                (continued)**       |    |     |     |     |
|-----------------------------------------------------------------|---------|----------|----------|----------|
| **Investment                in Trust Receivable**               |    |     |     |     |
| **Residential                Mortgages and Contracts for Deed** |    |     |     |     |
| Purchase                price                                   | $23,000 | $495,000 | $296,000 | $495,000 |
| Number                purchased from other sources              | 1       | 11       | 12       | 11       |
| Aggregate                principal balance                      | $23,000 | $495,000 | $296,000 | $495,000 |
| Average                principal balance                        | $23,000 | $45,000  | $25,000  | $45,000  |
|                                                            |    |     |     |     |

|                                                                    | **June                30, 2007** | **June                30, 2006** |
|-------------------------------------------------------------------------|----------------------------------|----------------------------------|
| **Interim                Mortgages Balances at June 30**                |                             |                             |
| Affiliates                unpaid principal balance                      | $69,886,000                      | $53,787,000                      |
| Unpaid                principal balance others                          | $15,096,000                      | $27,186,000                      |
| Total                                                                   | $84,982,000                      | $80,973,000                      |
|                                                                    |                             |                             |
| Interim                foreclosed, other                                | $380,497                         | $1,059,000                       |
|                                                                    |                             |                             |
| Number                of loans funded with affiliates                   | 901                              | 693                              |
| Number                of loans funded with others                       | 188                              | 277                              |
|                                                                    | 1,089                            | 970                              |
|                                                                    |                             |                             |
| Average                unpaid principal balance                         | $78,000                          | $83,000                          |
| Remaining                term in months: less than                      | 12                               | 12                               |
| Yield                on investments                                     | 12.80%                           | 13.84%                           |
|                                                                    |                             |                             |
| **Line                of Credit, Affiliate Balances at June 30**        | $30,697,000                      | $31,553,000                      |
| Term                remaining in months                                 | 30                               | 42                               |
| Yield                on investment                                      | 13.75%                           | 13.74%                           |
|                                                                    |                             |                             |
| **Recourse                Obligations Balance at June 30**              |                             |                             |
| Recourse                obligations                                     | $14,267,000                      | $11,236,000                      |
| Yield                on investment                                      | 9.94%                            | 9.81%                            |
|                                                                    |                             |                             |
| **Investment                in Trust Receivable at June 30**            |                             |                             |
| Loans                owned outright                                     | 64                               | 24                               |
| Rental                properties                                        | 1                                | 2                                |
| Unpaid                principal balance loans/properties owned outright | $2,193,000                       | $1,149,000                       |
| Securitized                loans B piece balance                        | $3,231,000                       | $3,547,000                       |
| Term                remaining in months                                 | 237                              | 250                              |
| Yield                on investments                                     | 13.15%                           | 12.89%                           |
|                                                                    |                             |                             |

|                                                    | **At                June 30,** |
|---------------------------------------------------------|--------------------------------|
|                                                    | **2007**                       | **2006** |
|                                                    |                           |   |
| Interims                with affiliates                 | 51%                            | 42% |
| Interims                with others                     | 11%                            | 21% |
| UDF                line of credit                       | 23%                            | 24% |
| Recourse                obligations                     | 11%                            | 9% |
| Trust                receivable - loan owned outright   | 2%                             | 1% |
| Trust                receivable - securitized "B" piece | 2%                             | 3% |

**Page          9**

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*Trust      administration fee*

*General      and administrative*

*Interest      expense*

**Page            10**

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

|                                                                             | Three                Months Ended June 30, | Six                Months Ended June 30, |
|----------------------------------------------------------------------------------|--------------------------------------------|------------------------------------------|
|                                                                             | **2007**                                   | **2006**                                 | **2007** | **2006** |
| Shares                issued in dividend reinvestment                            | 30,998                                     | 34,369                                   | 62,047 | 69,420 |
| Gross                proceeds                                                    | 621,000                                    | 687,000                                  | 1,242,000 | 1,388,000 |
| Share                repurchases                                                 | (1,457,000)                                | (2,705,000)                              | (2,392,000) | (3,076,000) |
| Principal                receipts Residential Mortgages & Contracts for Deed | 236,000                                    | 320,000                                  | 267,000 | 1,059,000 |
| Principal                receipts Interim Mortgages                              | 11,903,000                                 | 14,610,000                               | 33,176,000 | 33,234,000 |
| Funding                on Line of Credit, Affiliate, net                         |  3,409,000                            | (1,650,000)                              |  2,359,000 | (1,236,000) |
| Net                advances (payments) on Line of Credit payable                 | (1,250,000)                                | 6,001,000                                | (1,004,000) | 6,641,000 |

**Page            11**

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**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**

**Page            12**

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**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**

|   | **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                                                                                                |
| Total  | 131,874                                             | $18.14                                     | 63,066                                                                                                | 68,806                                                                                                |

**Page            13**

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**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 |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

**SIGNATURE**

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

**Page          14**

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