SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C. 20549



                            Form 10-Q



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

         For the quarterly period ended March 31, 2006

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

         For the transition period from _________ to _________


                  Commission file number 000-32409


                       UNITED MORTGAGE TRUST


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

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



                       1702 N Collins Blvd
                           Suite 100
                     Richardson, Texas 75080
                         (214) 237-9305



     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes  X        No ___

                              7,070,781

Number of shares of Registrant's shares of beneficial interest outstanding as
of March 31, 2006.

                               (i)
<PAGE>


<Page>
PART I  -- FINANCIAL INFORMATION
<TABLE>
                           UNITED MORTGAGE TRUST
                        CONSOLIDATED BALANCE SHEETS
<Caption>
                                                                                 March 31,       December 31,
                                           2006             2005
                                        (unaudited)       (audited)
<S>                                     <C>             <C>
Assets
Cash and cash equivalents               $  2,485,374    $  5,548,421
Mortgage investments:
  Investment in trust receivable           4,675,312       5,815,712
  Residential mortgages and contracts
     for deed foreclosed                   1,133,636       1,494,122
  Interim mortgages, affiliates           51,373,573      48,411,728
  Interim mortgages                       26,038,835      24,543,944
  Interim mortgages foreclosed             1,604,439       2,426,532
  Reserve for loan losses                 (1,357,886)     (1,939,424)
                                        ------------    ------------
Total mortgage investments                83,467,909      80,752,614

Line of credit receivable, affiliate      29,903,218      30,317,037
Accrued interest receivable                  346,664         251,594
Accrued interest receivable, affiliate     1,686,626       1,294,829
Receivable from affiliate                    383,728         377,685
Recourse obligations, affiliates          10,433,915       9,264,233
Equipment, less accumulated
  depreciation of $12,597 and
  $11,709, respectively                       13,259          14,147
Other assets                               2,041,501       2,083,731
                                        ------------    ------------
Total assets                            $130,762,194    $129,904,291
                                        ============    ============

Liabilities and Shareholders' Equity
Liabilities:
  Line of credit                        $ 14,447,984    $ 13,808,080
  Dividend payable                           821,203         822,000
  Accounts payable and accrued
    liabilities                                  936         114,583
                                        ------------    ------------
Total liabilities                         15,270,123      14,744,663
                                        ------------    ------------
Commitments and contingencies                --              --

Shareholders' equity:
  Shares of beneficial interest;
  $.01 par value; 100,000,000 shares
  authorized; 7,887,752 and 7,854,037
  shares issued, respectively; and
  7,070,781 and 7,055,119 outstanding,
  respectively                                78,878          78,541
Additional paid-in capital               138,830,956     138,130,095
Advisor's reimbursement                      397,588         397,588
Cumulative distributions in
  excess of earnings                      (7,682,778)     (7,680,676)
                                        ------------    ------------
                                         131,624,643     130,925,548
Less treasury stock of 816,971 and
  797,582 shares, respectively
  at cost                                (16,132,573)    (15,765,920)
                                        ------------    ------------
Total shareholders' equity              $115,492,069    $115,159,628
                                        ------------    ------------
Total liabilities and
  shareholders' equity                  $130,762,194    $129,904,291
                                        ============    ============
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</Table>


                                     -1-



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

<CAPTION>
                                                 For the Three Months
                                                    Ended March 31,
                                                2006              2005
                                              --------------------------
<S>                                           <C>             <C>
Revenues:
  Interest income derived from affiliates     $ 3,014,549     $ 2,530,354
  Interest income                               1,064,005       1,012,388
                                              -----------     -----------
                                                4,078,554       3,542,742

Expenses:
  Provision for loan losses                       787,375       1,378,540
  Interest expense                                280,035          23,985
  Loan servicing fee                               23,395          83,010
  Trust administration fee                        260,595         226,262
  General and administrative                      246,790         130,833
                                              -----------     -----------
                                                1,598,191       1,842,630
                                              -----------     -----------
 Net income                                   $ 2,480,364     $ 1,700,112
                                              ===========     ===========


Net income per share of beneficial interest        $ 0.35          $ 0.24
                                              ===========     ===========

Weighted average shares outstanding             7,066,402       7,031,366
                                              ===========     ===========

Dividends declared per share of
  Beneficial interest                              $ 0.35          $ 0.40
                                              ===========     ===========


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

                                 -2-


<Page>
<TABLE>
                         UNITED MORTGAGE TRUST
                CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (unaudited)
<CAPTION>
                                                    Three Months Ended
                                                          March 31,
                                                     2006          2005
                                                -------------------------

<S>                                             <C>            <C>
Operating Activities
 Net income                                     $  2,480,364    $  1,700,112
 Adjustments to reconcile net income
   to net cash provided by operating
     activities:
  Provision for loan losses                          787,375       1,378,540
  Depreciation                                           888             885
  Net amortization of discount on
    mortgage investments                              (2,161)          3,774
  Changes in assets and liabilities:
   Accrued interest receivable                      (486,867)        201,630
   Other assets                                       42,230        (386,080)
   Accounts payable and accrued liabilities         (114,445)        129,425
                                                 -----------     -----------
Net cash provided by operating activities          2,707,384       3,028,286
                                                 -----------     -----------
Investing Activities
 Investment in residential mortgages and
   contracts for deed                                    -          (516,973)
 Principal receipts on residential mortgages
   and contracts for deed                            738,564         637,706
 Proceeds from the sale of mortgage loans,
   securitization                                        -         7,275,598
Investment in interim mortgage notes             (24,477,637)    (13,488,425)
 Principal receipts on interim mortgage notes     18,624,795      19,204,189
 Proceeds from recourse obligations, affiliates      444,088             -
 Line of credit receivable, affiliate, net           413,819      (2,555,100)
 Receivable from affiliate                            (6,043)         (7,550)
                                                 -----------     -----------
Net cash provided by (used in) investing
  activities                                      (4,262,414)     10,549,445
                                                 -----------     -----------
Financing Activities
 Proceeds from issuance of shares of
   beneficial interest                               701,197         935,557
 Purchase of treasury stock                         (366,653)     (1,005,950)
 Net borrowings (payments) on line of credit,
   payable                                           639,904      (9,779,900)
 Dividends                                        (2,482,465)     (2,807,603)
                                                 -----------     -----------
Net cash used in financing activities             (1,508,017)    (12,657,896)
                                                 -----------     -----------
Net increase (decrease) in cash                   (3,063,047)        919,835

Cash at beginning of period                        5,548,421       1,331,798
                                                 -----------     -----------

Cash at end of period                           $  2,485,374    $  2,251,633
                                                ------------    ------------
Supplemental Disclosure of Cash Flow
   Information
Cash paid during the period for interest        $    280,035    $     23,985
                                                ============    ============
Supplemental Disclosure of Non-cash
  Information
Transfer of loans into recourse
  obligations, affiliates                       $  1,613,769    $     --
                                                ============    ============

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

                                 -3-


<PAGE>
                            UNITED MORTGAGE TRUST
                Notes to Consolidated Financial Statements
                               March 31, 2006

1.  NATURE OF BUSINESS

THE COMPANY

United Mortgage Trust (the "Company") is a Maryland real estate investment
trust which qualifies as a real estate investment trust (a "REIT") under
federal income tax laws. The Company invests exclusively in first lien,
fixed rate mortgages secured by single-family residential property
throughout the United States ("Mortgage Investments") and in secured loans
to United Development Funding, L.P. ("UDF"), a Nevada limited partnership,
that (a) originates and acquires loans for the acquisition and development
of single-family home lots, referred to as land development loans, and
enters into participation agreements with single-family residential real
estate developers, referred to as equity participations.  Such loans are
originated by others to the Company's specifications or to specifications
approved by the Company.  Most, if not all, of such loans are not insured
or guaranteed by a federally owned or guaranteed mortgage agency.

The Company has no employees. It pays UMT Advisors, Inc. ("UMTA" or "the
Advisor")a monthly trust administration fee for the services relating to
the Company's daily operations that the Advisor uses to pay its employees
who are directly and indirectly involved in the day-to-day management of
the Company. The Company's Advisor and affiliated companies offices are
located in Richardson, Texas.

2. Basis of Presentation

The accompanying unaudited consolidated financial statements were prepared in
accordance with accounting principles generally accepted in the United States
of America for interim financial information and with the instructions to
Form 10-Q of Regulation S-X. They do not include all information and
footnotes required by accounting principles generally accepted in the United
States of America for complete financial statements. However, except as
disclosed herein, there has been no material change in information disclosed
in the notes to the consolidated financial statements for the year ended
December 31, 2005 included in the Company's 10-K filed with the Securities
and Exchange Commission. The interim unaudited consolidated financial
statements should be read in conjunction with those consolidated financial
statements. In the opinion of management, all adjustments considered
necessary for a fair presentation, consisting solely of normal recurring
adjustments, were made. Operating results for the three months ended March
31, 2006 are not necessarily indicative of the results that may be expected
for the year ended December 31, 2006.

3. LINE-OF-CREDIT PAYABLE

On November 8, 2004, with trustee approval, the Company entered into a three
year loan agreement with a $15 million revolving credit facility. The line of
credit payable was collateralized by certain interim mortgages. Interest on
the outstanding balance accrues at the higher of the Prime Rate or the sum of
the Federal Funds rate plus 1/2% per annum. With trustee approval, on
December 27, 2005, the company amended the revolving credit facility to
increase the amount available to borrow up to $17 million. On April 19, 2006,
with Trustee approval, we amended the credit facility increasing the
borrowing limit to $18.5 million. Outstanding balance on the credit facility
at March 31, 2006 and 2005 were $14,447,984 and $2,250,100, respectively. The
interest rate at March 31, 2006 was 8% compared to 6% at March 31, 2005.

4.  RELATED PARTY TRANSACTIONS

a) Capital Reserve Group, Inc. ("CRG") is a Texas corporation that is 50%
owned by Todd Etter, an officer and principal shareholder of the Advisor.
CRG was in the business of financing home purchases and renovations by real
estate investors. The Company loaned money to CRG to make loans to other
borrowers. The unpaid principal balance of the loans at the end of the first
quarter was approximately $2,292,000.

b) Ready America Funding ("RAFC") is a Texas corporation that is 50% owned
by SCMI, which is owned by Todd Etter, who is Chairman of the Advisor. RAFC
is in the business of financing interim mortgages for the purchase of land
and the construction of modular and manufactured single-family homes placed
on the land by real estate investors. The Company will continue to loan
money to RAFC to fund obligations under existing loans to other borrowers
which have been collaterally assigned to the Company. The unpaid principal
balance of the loans at the end of the first quarter was approximately
$24,260,000.

c) South Central Mortgage, Inc. ("SCMI") is a Texas based mortgage bank of
which the sole beneficial shareholder is Todd Etter, an officer and principal
shareholder of the Advisor.  Christine "Cricket" Griffin, the Company's
President and one of its trustees, was the Chief Financial Officer of SCMI from
June 1995 until July 1996.  The Company loaned money to SCMI to make loans to
other borrowers. The loans were then collaterally assigned to the Company as
security for the promissory note between SCMI and the Company. There was no
balance at the end of the quarter with SCMI.

d) UMT Holdings, LP ("UMT Holdings") is a Delaware limited partnership which is
in the real estate finance business. UMT Holdings and the Company have entered
into an Agreement and Plan of Merger dated September 1, 2005. Christine
"Cricket" Griffin, the Company's President; Todd Etter and Tim Kopacka, who own
100% of the Company's Advisor; Craig Pettit, who owns 100% of RMC, which in
turn owns 50% of RAFC; and William Lowe, who owns 50% of CRG, are limited
partners in UMT Holdings. Ms. Griffin and Mr. Kopacka are officers of UMTH
General Services, L.P. and UMTH Funding Services, L.P., respectively, both
subsidiaries of UMT Holdings. Mr. Etter is a shareholder and director of UMT
Services, Inc., the general partner of UMT Holdings. REO Property Company
("REOPC") is a subsidiary of UMT Holdings that provides real estate management
services to the Company, Prospect Service Corp. is a subsidiary of UMT
Holdings that acts as a mortgage servicer for the Company, and UMT Holdings
holds a 99% limited partnership interest in UMTH Land Development, L.P., which
holds a 50% profit interest in UDF and acts as UDF's asset manager.

UMTH Lending, L.P. ("UMTHL") is a Delaware limited partnership owned by UMT
Holdings.  The Company has loaned and will continue to loan money to UMTHL
to make loans to other borrowers. The loans are then collaterally assigned
to the Company as security for the promissory note between UMTHL and the
Company. The unpaid principal balance of the loans at the end of the first
quarter was approximately $24,614,000.

e) Recourse Obligations, Affiliates Secured Notes:

Name      Principal      Principal       Maximum
          Balance at     Balance at        Note
           12-31-05       03-31-06        Amount
---------------------------------------------------
CRG      $ 2,725,442     $2,816,034     $ 3,372,904
RAFC     $ 3,243,369     $4,185,839     $ 5,274,436
SCMI     $ 3,295,422     $3,432,042     $ 3,448,643

The Secured Notes bear interest at a rate of 10% per annum. The CRG and RAFC
Secured Notes mature in 15 years. The SCMI Secured Note matures in
approximately 22 years, which was the initial amortization of the deficiency
notes from SCMI that were consolidated. The Secured Notes require the
originating company to make monthly payments equal to the greater of (1)
principal and interest amortized over 180 months and 264 months,
respectively, or 2) the amount of any distributions paid to the originating
company with respect to the pledged Class C units of UMT Holdings. UMT
Holdings has also guaranteed the obligations of CRG, RAFC and SCMI under the
Secured Notes.

f) REOPC is a Texas limited partnership owned by UMT Holdings. Its mission is
to manage and sell REO properties, including the Company's, for which it
receives a fee. The Company has loaned money to REOPC to acquire foreclosed
properties from CRG. The unpaid principal balance of the loans at the end of
the first quarter was approximately $207,000.  The Company pays a monthly
property management fee to REOPC for managing its REO properties. The fee is
calculated as 0.8% of the Company's basis in the property. Fees paid in the
first quarter were approximately $8,000. The Company paid real estate sales
commissions to REOPC in the first quarter approximately $1,400.

g) RMC, a Texas based real estate finance company, is owned by Craig Pettit,
who is a limited partner of UMT Holdings. The Company loaned money to RMC to
make loans to other borrowers. The loans were then collaterally assigned to
the Company as security for the promissory note between RMC and the Company.
RMC had paid off all its loans by the end of the first quarter.

h) United Development Funding, L.P. ("UDF") is a Nevada real estate finance
company in which UMT Holdings holds a limited partnership profit interest. On
January 1, 2005, effective September 30, 2004, with Trustee approval the
Company extended a secured line of credit to UDF in the amount of $30,000,000
with which they have funded loans to real estate developers. The principal
balance at the end of the first quarter was approximately $29,903,000.

i) The Company has an Advisory Agreement with UMTA. Under that agreement
UMTA is paid a monthly trust administration fee. The fee is calculated
monthly as 1/12 of 1/2 of 1% of the first $50,000,000 in income producing
assets and 1/12 of 1% of assets exceeding $50,000,000. Trust administration
fees paid during the first quarter were approximately $261,000.

j) The Company pays loan servicing fees to PSC, a subsidiary of UMT
Holdings, under the terms of a Mortgage Servicing Agreement. The Company
paid loan servicing fees of approximately $23,000 during the first
quarter.

5. MERGER AGREEMENT

The Company, UMT Holdings and UMT Services, Inc., the general partner of
UMT Holdings, have entered into an Agreement and Plan of Merger, dated as
of September 1, 2005, as amended, under which the Company would be merged
with and into UMT Holdings.  The merger is subject to the approval of
holders of eighty percent of the Company's outstanding shares of
beneficial interest, as well as other customary closing conditions.

The Agreement and Plan of Merger provides that each holder of shares of
beneficial interest of the Company at the time of the closing of the
merger would receive in exchange for each share of beneficial interest
held, one 8.5% Class A Senior Subordinated Debenture issued by UMT
Holdings (a "Class A Debenture").  The Class A Debentures will have a ten
year term, an original principal amount of $20 and an annual interest
rate of 8.5%, which interest shall be payable monthly.

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

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


               RESULTS OF OPERATIONS FOR THE THREE MONTHS
                     ENDED MARCH 31, 2006 AND 2005

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

LOANS PURCHASED DURING FIRST QUARTER MARCH 2006 AND MARCH 2005

     During the three months ended March 31, 2006 we acquired interim
mortgages from both affiliates and others, and funded draws on the UDF line
of credit. During the three months ended March 31, 2005, in addition to
acquiring interim mortgages and funding UDF draws, we acquired residential
mortgages. Below is a table setting out the amount we invested during the
quarters ended March 31, 2006 and 2005.
<Table>
<Caption>
                                                   2006             2005
                                               -----------      -----------
<S>                                            <C>              <C>
Interim Mortgages Purchased During Quarters
Interims funded with affiliates                $18,604,304      $ 5,061,669
Interims funded with others                    $ 5,873,333      $ 8,426,755
Total unpaid principal balance funded          $24,477,637      $13,488,424

Number of loans funded with affiliates                 186               63
Number of loans funded with others                      25               70
Total number funded                                    211              133

Affiliate interims paid off                    $14,845,230      $ 8,958,529
Other interims paid off                        $ 3,779,565      $10,245,659
Total unpaid principal balance paid off        $18,624,795      $19,204,188

Number of affiliated interims paid off                 251              141
Number of other interims paid off                       33               72
Total number paid off                                  284              213


Line of Credit, Affiliate
Draws funded                                   $ 5,108,976    $10,655,100
Paid down                                      $ 5,522,795    $ 8,100,000
Total change                                   $(  413,819)   $ 2,555,100

Investment in Trust Receivable
(Residential Mortgages & Contracts for Deed)
Purchase price                                          -     $   517,000
Number purchased from other sources                     -              13
Aggregate principal balance                             -     $   517,000
Average principal valance                               -     $    40,000
</Table>

MORTGAGE PORTFOLIO

     At the end of the March 2006 and 2005 quarters, and with the
culmination of the two Bayview Securitizations our mortgage portfolio
changed significantly.  Below is a table that summarizes our mortgage
portfolio at the end of each quarter indicated:

<Table>
<Caption>
                                                   2006           2005
                                               -----------    -----------
<S>                                            <C>            <C>
Interim Mortgage Balances
Affiliates unpaid principal balance            $51,373,573    $41,749,014
Unpaid principal balance others                $26,038,835    $26,057,663

Number of loans outstanding, affiliates                677            512
Number of loans outstanding, others                    296            350

Average unpaid principal balance               $    79,561    $    78,662
Remaining term in months: less than                     12             12
Yield on investments                                12.98%         12.72%

Line of Credit, Affiliate Balances             $29,903,218    $31,276,739
Term remaining                                     4 years        5 years
Yield on investments                                14.31%         14.34%

Recourse Obligations, Affiliates               $10,433,915          --

Investment in Trust Receivable
Loans owned outright                                    20             53
Rental properties                                        2              3
Unpaid principal balance
  loans/properties owned outright               $  966,318     $4,413,416
Securitized loans B piece balance               $3,708,994     $4,554,938
Foreclosed properties                           $1,133,636     $1,535,884
Term remaining: less than                       360 months     360 months
Yield on investments                                12.83%         10.55%
</Table>


     The following table illustrates percentage of our portfolio dedicated
to each loan category:

                                               At March 31,
                                            2006        2005
                                            ----------------
Interims with affiliates                     42%         39%
Interims with others                         21%         24%
UDF line of credit                           24%         29%
Recourse obligations                          9%         --
Trust receivable - loan owned outright        1%          4%
Trust receivable - securitized "B" piece      3%          4%


     All of the properties that are security for the mortgage investments
are located in the United States. Each of the properties was adequately
covered by a mortgagee's title insurance policy and hazard insurance.

     During the three-month periods ended March 31, 2006 and 2005, our
investments generated approximately $4,079,000 and $3,543,000 of interest
income, a 15% increase. The increase was attributed to increased use of our
bank line of credit. We used of our bank line to acquire more properties
paying higher interest rates than our bank line which has a positive impact
on earnings.

     Operating expenses for the three-month periods were approximately
$1,598,000 and $1,843,000, a 13% decrease between comparable quarters, the
major categories are listed below and the fluctuation was due primarily to
reduction in our provision for loan losses:

Loan losses - $787,000 in 2006 compared to $1,379,000 in 2005, a 43%
decrease. We recorded reserves based on a percentage of loans
foreclosed at period end and mortgages outstanding. Provision for loan
losses decreased as a result of lower default rates during the period.

Trust management fee - $261,000 in 2006 compared to $226,000 in 2005,
representing a 15% increase. Trust management fees are based on a
percentage of income producing assets which were greater in the 2006
quarter compared to the 2005 quarter.

General and administrative - $247,000 in 2006 compared to $131,000 in
2005, representing a 89% increase. The increase was primarily due to
higher legal fees and amortization expense.

Interest expense - $280,000 in 2006 compared to $24,000 in 2005, a 1067%
increase. We used our bank line of credit extensively during the 2006
quarter to fund interim mortgages and draws on the UDF line of credit.
Higher usage of our credit facility increases interest expense.

Loan servicing fees - $23,000 in 2006 and $83,000 in 2005, a 72%
decrease. Loan servicing fees are calculated as a percentage of the
unpaid principal balances of residential mortgages and contracts for
deed, and the number of these types of loans has decreased compared to
the 2005 quarter.

     Operating expenses, less interest expense and the provision for loan
losses, as a percentage of income were 13.01% and 12.42%, respectively, for
the 2006 and 2005 three-month periods, and operating expenses as a
percentage of invested assets were 0.43% and 0.41%, respectively.

     We recorded loan loss reserves of $787,000 and $1,379,000 during the
comparative quarters of 2006 and 2005. We realized loan losses as
anticipated of $1,369,000 and $1,139,000 during the comparable periods,
respectively. Loss reserves are recorded monthly at historical default rates
and at 42% of a residential mortgages or contracts for deed reclassified as
foreclosed during the period and 26% of each interim mortgage reclassified
as foreclosed during the quarter.

     Of approximately $450,000,000 in loans acquired, we have recorded
losses of 1.80% of those assets to date. We anticipate loan losses to
continue and therefore are continuing to monitor the adequacy of our loan
loss reserve.

     Total foreclosed loans as a percentage of income producing assets, as
of March 31, 2006 and 2005, was approximately 2.24% and 3.11%, respectively.
Loans foreclosed during the quarters ended March 31, 2006 and 2005 as a
percentage of income producing assets was 1.05% and 1.74%, respectively.

     Net income was approximately $2,480,000 and $1,700,000 for the three
months ended March 31, 2006 and 2005, respectively, a 46% increase. Earnings
per weighted average share were $0.35 and $0.24. The increase in net income
was a result of lower loan loss reserves and increased use of our credit
facility during the 2006 quarter.

    Distributions to shareholders per share of beneficial interest in 2006
and 2005 were $0.35 and $0.40 respectively, based on earnings of $0.35 and
$0.24 per weighted share. We distributed in excess of earnings during the
2005 quarter but at earnings during the 2006 quarter.

                  CAPITAL RESOURCES AND LIQUIDITY FOR
             THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005

     We utilize funds made available from our dividend reinvestment plan,
from our bank line of credit and repayment of principal on our loans to
purchase mortgage investments.
                                                  March 31,
                                         2006                   2005
---------------------------------------------------------------------
Shares issued                                35,100           46,700
Number of new shareholders                      --               --
Gross proceeds                          $   701,000      $   936,000
Share repurchases                       $  (367,000)     $(1,006,000)
Principal receipts from Residential
  Mortgages and Contracts for Deed      $   739,000      $   638,000
Principal receipts from
  Interim Mortgages                     $18,625,000      $19,204,000
Securitization proceeds                         --       $ 7,276,000
Net borrowing from credit line          $   640,000      $(9,780,000)

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

     Shares issued in the aggregate, as of March 31, 2006 and 2005, were
7,887,752 and 7,729,773, respectively. Shares retired to treasury through
our share redemption plan in the aggregate were 816,971 and 692,490,
respectively. Total shares outstanding were 7,070,781 and 7,037,283,
respectively. Inception to date gross offering proceeds were approximately
$157,468,000 and net proceeds after fees, marketing reallowance and
commissions were $138,831,000.

    On November 8, 2004, with trustee approval, we entered into a three year
loan agreement with a $15 million revolving credit facility with a new bank.
On December 27, 2005 we amended the agreement to increase the borrowing base
to $18.5 million. The line of credit was collateralized by certain interim
mortgages. Interest on the outstanding balance accrues at prime plus 0.5% per
annum, or 8.00% at March 31, 2006 and 6.00% at March 31, 2005. The
outstanding balance on the line of credit was approximately $14,448,000 and
$2,250,000 at March 31, 2006 and 2005, respectively.

     We are monitoring the gradual increase in the prime lending rate. We
are aware that higher consumer interest rates may negatively impact home
building, sales of real estate and real estate development, and therefore
may negatively impact our ability to acquire a sufficient number of
quality loans to support our dividend at the current rate. At the time of
this report, analysts agree that the real estate market has slowed to what
is being characterized as normal growth rates. Historically we have
experienced a prime lending rate as high as 10% without negative effects
on real estate markets and our business.

Item 3. Quantitative and Qualitative Disclosure About Market Risk.

No change.

Item 4. CONTROLS AND PROCEDURES

     Evaluation of Disclosure Controls and Procedures
       An evaluation was performed by the Company's management, consisting of
the individual who serves as our Chief Executive Officer and Chief Financial
Officer, of the effectiveness of Company's disclosure controls and procedures
(as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as
of March 31, 2006. Based on such evaluation, management has concluded that,
as of the end of such period, the Company's disclosure controls and
procedures are effective.
Changes in Internal Controls Over Financial Reporting

     There have been no changes in the Company's internal control over
financial reporting that occurred during the first quarter of 2006, that
have materially affected, or are reasonably likely to materially affect,
the Company's internal control over financial reporting.


PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.


                               -13-


<Page>
Item 2. Changes in Securities and Use of Proceeds.

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

     The following table sets forth information relating to shares of
beneficial interest issued and the use of proceeds of the offering during the
quarter ended March 31, 2006.

Shares issued                    35,100
Gross proceeds                 $701,000


Item 3. Defaults Upon Senior Debentures.

Not applicable.

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

None.


Item 5. Other Information.

MERGER AGREEMENT

     In November 2003, we received a merger proposal from UMT Holdings, a
real estate finance company based in Richardson, Texas pursuant to which we
would be merged into UMT Holdings. UMT Holdings is owned by persons that
include officers and owners of the Company and the Advisor.

      In response to the proposal, our Board of Trustees formed an
independent committee comprised of Richard D. O'Connor, Jr., Paul R. Guernsey
and Douglas R. Evans, each an independent and disinterested trustee.  The
independent committee retained legal and financial experts to assist it in
evaluating the proposal.  The independent committee negotiated the final
terms of the transaction with UMT Holdings on behalf of the Company and has
evaluated the fairness of the terms to our shareholders who are not
affiliated with UMT Holdings. At the conclusion of its negotiations and
deliberations, the independent committee made a recommendation to the full
Board of Trustees with respect to the transaction.  The independent committee
was also authorized to entertain unsolicited inquiries from any other parties
interested in the possible acquisition of our company and, as appropriate,
provide information,

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

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

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


SIGNATURES

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


                                        UNITED MORTGAGE TRUST
                                        (Registrant)

Date:  May 15, 2006                    /S/Christine A. Griffin
                                         Christine A. Griffin
                                              President

                                  -15-

EXHIBITS

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

I, Christine A. Griffin, certify that:

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

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

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

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

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

(b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;

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

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

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

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

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

May 15, 2006                       /s/ Christine Griffin
                                     ---------------------------------------
                                     Christine Griffin
                                     President and Chief Executive Officer

                                   -16-

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

I, Christine A. Griffin, Chief Executive Officer and Chief Financial Officer
of United Mortgage Trust (the "registrant"), have executed this certification
for furnishing to the Securities and Exchange Commission in connection with
the filing with the Commission of the registrant's Quarterly Report on Form
10-Q for the period ended March 31, 2006 (the "Report"). I hereby certify
that:

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

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


May 15, 2006


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


                               -17-