UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-KSB

                                                    (Mark one)

[X] Annual  Report Under Section 13 or 15(d) of The  Securities  Exchange Act of
1934

                   For the fiscal year ended December 31, 2006

[ ] Transition  Report Under Section 13 or 15(d) of The Securities  Exchange Act
of 1934

         For the transition period from ______________ to _____________

                        Commission File Number: 000-21627

                     Mortgage Assistance Center Corporation
        (Exact name of small business issuer as specified in its charter)

              Florida                                       06-1413994
      ------------------------                       ------------------------
      (State of incorporation)                       (IRS Employer ID Number)

                         2614 Main St., Dallas, TX 75226
                         -------------------------------
                    (Address of principal executive offices)

                                 (214) 670-0005
                                 --------------
                           (Issuer's telephone number)


      Securities registered under Section 12 (b) of the Exchange Act: None

  Securities registered under Section 12(g) of the Exchange Act: Common Stock -
                                $0.001 par value

Check whether the issuer is not required to file reports  pursuant to Section 13
or 15(d) of the Exchange Act. [ ]

Check  whether  the issuer  has (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 the Company was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of Company's knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [ ]

Indicate by check mark whether the  registrant is a shell company (as defined by
Rule 12b-2of the Exchange Act. Yes [ ] No [X]

The issuer's total gross  operating  revenues for the fiscal year ended December
31, 2006 was $2,784,104.

The aggregate market value of voting common equity held by  non-affiliates as of
April 11, 2007 was  approximately  $929,848.  As of April 11,  2007,  there were
12,725,124 shares of Common Stock issued and outstanding.

Transitional Small Business Disclosure Format : Yes [ ] No [X]



<PAGE>



                     Mortgage Assistance Center Corporation




                                Index to Contents

                                                                     Page Number
                                                                     -----------
    Part I

    Item 1   Description of Business                                           3
    Item 2   Description of Property                                           8
    Item 3   Legal Proceedings                                                 8
    Item 4   Submission of Matters to a Vote of Security Holders               9

    Part II

    Item 5   Market for Company's Common Stock, Related Stockholders Matters
               and Small Business Issuer Purchases of Equity Securities        9
    Item 6   Management's Discussion and Analysis or Plan of Operation        12
    Item 7   Financial Statements                                            F-1
    Item 8   Changes in and Disagreements with Accountants
                 on Accounting and Financial Disclosures                      17
    Item 8A   Controls and Procedures                                         17
    Item 8B   Other Information                                               17

    Part III

    Item 9     Directors, Executive Officers, Promoters and Control Persons;
                Compliance with Section 16(a) of the Exchange Act             18
    Item 10    Executive Compensation                                         20
    Item 11    Security Ownership of Certain Beneficial Owners and Management
                 and Related Stockholder Matters                              23
    Item 12    Certain Relationships and Related Transactions                 23
    Item 13    Exhibits                                                       24
    Item 14    Principal Accountant Fees and Services                         24

    Signatures                                                                25

    Certifications pursuant to Sarbanes-Oxley Act of 2002                     27



                                       2
<PAGE>



                  Caution Regarding Forward-Looking Information

Certain  statements  contained  in  this  annual  filing,   including,   without
limitation, statements containing the words "believes", "anticipates", "expects"
and  words  of  similar  import,  constitute  forward-looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

Given  these  uncertainties,  readers  of this Form  10-KSB  and  investors  are
cautioned not to place undue reliance on such  forward-looking  statements.  The
Company  disclaims  any  obligation  to update any such  factors or to  publicly
announce the result of any  revisions to any of the  forward-looking  statements
contained herein to reflect future events or developments.

PART I

Item 1 - Description of Business

History

Safe  Alternatives  Corporation  of America,  Inc. (the "Company" or "SACA") was
organized  in 1976,  under  the name  Knight  Airlines,  Inc.,  to engage in the
commuter  airline  business.  In October 1978, the Company engaged in an initial
public  offering of its Common Stock in Florida,  pursuant to an exemption  from
registration under Regulation A promulgated under the Securities Act of 1933, as
amended (the Securities  Act").  To the Company's best  knowledge,  there was no
market for trading of the Common  Stock  until the  Company's  Common  Stock was
included for trading on the NASD's Electronic  Bulletin Board in March 1997. The
Company  operated as a commuter  airline from its inception  through April 1983,
when it ceased  operations  and all of the  assets of the  Company  were sold to
satisfy all outstanding  indebtedness.  From April 1983, through September 1995,
the Company  was  dormant.  In May 1994,  the name of the Company was changed to
Portsmouth Corporation.

On September 15, 1995,  pursuant to the terms of an Asset Purchase Agreement and
Plan of  Reorganization  dated as of August 21, 1995 (the  "Agreement")  between
Safe  Alternatives   Corporation  of  America,   Inc.,  a  Delaware  corporation
("SAC-Delaware")   and  the  Company,  the  Company  purchased  the  business  ,
including,  without limitation,  all of the assets of SAC-Delaware,  and assumed
all of the  liabilities of  SAC-Delaware  (the  Reorganization"),  and commenced
operations.  Prior  to  the  Reorganization,   the  Company  had  no  meaningful
operations.  On March 4, 1996, the Company changed its name to Safe Alternatives
Corporation of America, Inc.

In  connection  with  the  Reorganization,   SAC-Delaware  was  liquidated,  and
SAC-Delaware  distributed  to each  stockholder  0.2736  shares of the Company's
Common  Stock for each  share of  SAC-Delaware  that was  owned.  The  Agreement
provided  for  the  Company's  purchase  of  all  of  SAC-Delaware's  assets  in
consideration   for,   among  other  things,   (i)  the  assumption  of  all  of
SAC-Delaware's  liabilities,  (ii) the issuance and delivery to  SAC-Delaware of
8,000,000 shares of the Common Stock, representing approximately 94% of the then
issued and outstanding shares of Common Stock as of the date of the Closing; and
(iii) a six percent royalty (the "Royalty") on the gross revenues of the Company
attributable to the assets acquired by the Company  pursuant to the terms of the
Agreement, payable on a pro rata basis to the stockholders of SAC-Delaware.  The
Royalty obligation has now expired.

In January  1997,  the Board  authorized  an agreement  with M & A  Acquisitions
whereby M & A Acquisitions would receive a finder's fee of 3% of gross sales for
the Company  acquiring the  worldwide  manufacturing  and  marketing  rights for
certain products for environmentally  friendly paint stripping  applications and
air  conditioning  coolants from Natural Cool, Inc. The Company acquired Natural
Cool, Inc. in its entirety during the first half of 1998.

On July 15, 1998, the Company  entered into an agreement for the purchase of the
assets of  Norfield  Corporation,  a  Connecticut  corporation  with  offices in
Danbury, Connecticut ("Purchase Agreement"). Norfield Corporation was engaged in
business of environmentally  friendly solvents and industrial additives, but had
filed for  Chapter  11  Bankruptcy  Protection  in June 1996,  and the  Purchase
Agreement  was  subject  to the  approval  of the  Bankruptcy  Court,  which was
received on September  14,  1998.  On  September  18,  1998,  in order to obtain
financing  to acquire  Norfield's  assets,  the Company  assigned  the  Norfield
Purchase Agreement to the Norfield Investor Group (which consisted of Nicky Hunt
and Sean McNamara) and agreed to issue options to purchase  1,000,000  shares of
the Company's Common Stock at a price of ten cents ($.10) per share  exercisable
for a period of five (5) years from September 18, 1998.




                                       3
<PAGE>


The  Norfield  Investor  Group  agreed to pay all amounts due under the Norfield
Purchase  Agreement  at Closing,  including  the sum of $235,000 and the Company
received a license and lease ("Norfield Lease") of all the assets so acquired by
the Norfield  Investor Group.  Pursuant to the terms of the Norfield Lease,  the
Company was to have made a payment of  approximately  $250,000 in December 1998.
Because the Company was unable to make that  payment,  the Norfield  Corporation
declared a default on the Norfield Lease and exercised its security  interest in
the Lease held by the  Company  and all of the assets  that were  subject to the
Lease were returned to Norfield Corporation as of December 31, 1998. The Company
did not  receive  any  revenue  or pay any sums of  money  as a  result  of this
transaction.

During 2001 and until mid-2002, the Company's business operations were conducted
from Derby, Vermont, and the Company greatly reduced overhead.

On September 17, 2002,  the Company's  Board of Directors  agreed to sell, as of
June 30, 2002, all of the Company's assets to Environmental  Alternatives,  Inc.
(EAI), a privately held Vermont corporation, in exchange for EAI's assumption of
and agreement to indemnify and hold the Company harmless from paying any and all
claims,  causes of action,  or other  liabilities,  including but not limited to
interest, costs, expenses, disbursements and attorneys' fees, that could, may or
do attach to the  Company  as of June 30,  2002 as a result of, or is in any way
related to any of the  Company's  obligations  to its  creditors and all adverse
judgments  entered  against the Company except any obligations to the following:
(A) Continental Stock Transfer and Trust Company,  the Company's transfer agent;
(B) Green Holman Frenia & Company,  L.L.P.,  the Company's former auditors;  (C)
Arab  Commerce  Bank,  a  holder  of a  Company  6%  Convertible  Note;  and (D)
settlement  amounts  due upon the  completion  of a merger or other  combination
between the Company and another company. Except as provided above, the agreement
to assume  the  Company's  liabilities  and to  indemnify  and hold the  Company
harmless from paying the same is unlimited as to amount or as to time.

EAI is owned by Mr. Kenneth  Hodgdon,  a former employee who was responsible for
the Company's daily operations. Shareholders holding a majority of the Company's
common stock approved the Agreement by written action in lieu of a shareholder's
meeting. Since July 1, 2002, the Company has had no operations or assets.

On May 14,  2004,  the  Company and  Mortgage  Assistance  Corporation,  a Texas
corporation based in Dallas,  Texas ("MAC"),  signed a letter of intent to enter
into a business  combination  transaction whereby the Company would acquire MAC.
Before the business combination could be completed,  the Company was required to
reorganize.  In connection  with this  transaction,  the following  changes were
effected: (1) the corporate name was changed from Safe Alternatives  Corporation
of America,  Inc. to Mortgage  Assistance Center Corporation  ("MACC");  (2) the
Company  implemented  a  reverse  split  of  common  stock  capital  stock  on a
One-for-Two-Hundred-and-Fifty  (1:250)  basis,  and (3) the Company  changed the
authorized  common  stock  capital  to  50,000,000  shares.  As a result of this
transaction,  MAC is now a wholly owned subsidiary of MACC, and is the principal
entity through which the Company conducts its business.

Business

Mortgage Assistance  Corporation ("MAC") was organized as a Texas corporation on
March 28, 2003. On January 1, 2004, MAC acquired the assets of Mortgage Solution
Partners,  a proprietorship owned by Daniel Barnett. It was a financial services
company  that  purchased,  managed  and  resold  first and  second  real  estate
mortgages and, or deed of trust promissory notes.

MAC purchases and manages pools of distressed real estate secured  mortgages and
promissory  notes. The types of mortgage pools acquired include  non-performing,
charged-off,  sub-prime mortgages,  typically between 90 days and two years past
due. The liens are secured by residential  real estate.  MAC acquires both first
and second  mortgages or liens.  MAC typically  purchases  these  mortgages at a
discount to the  mortgage  obligation.  Additionally,  when  necessary,  it will
foreclose,  rehabilitate  and, or sell the mortgage or real estate  securing the
purchased  mortgages and deed of trust promissory notes. A very small percentage
of  the  acquired  loans  are  subordinate  liens,  which  bear  risk  of  being
reclassified  as unsecured loans if the priority  lien-holder  forecloses on the
real estate.  These pools of non-performing  real estate mortgages and notes are
purchased from banks and other lending institutions.

After MAC purchases a loan pool, the process of debt resolution  commences.  MAC
works the loan portfolio with the purpose of changing the  non-performing  loans
into either  performing  loans or obtaining a deed to the underlying real estate
or  forecloses on the real estate.  MAC may resell a substantial  portion of its
re-performing  loans in various  sized loan pools and may  foreclose  on certain
real estate properties when portfolio loans continue in default.  As a result of
foreclosure  actions,  MAC will own real estate assets.  These properties may be
rehabilitated, held and ultimately sold.

MAC also enters into joint  venture  agreements  from time to time with  various
investors in the purchase of loan pools.



                                       4
<PAGE>


Competition

The market in the  non-performing  mortgage  industry is extremely  competitive.
Competition  varies  depending  on the quality of the  collateral  securing  the
non-performing  mortgages.  Typically,  large  amounts of cash are  required  to
facilitate the purchase of non-performing mortgage pools.

MAC seeks profit  opportunities in many areas of the industry,  but it currently
focuses its business in the lower value  non-performing  mortgage pools.  MAC is
principally  purchasing  non-performing  mortgages in the $100,000 or less range
since it  deems  this as a higher  profit  margin  area.  There  are many  other
companies  competing in this market,  many of which are better  funded than MAC.
Our ability to compete in this market has been limited by insufficient cash with
which to purchase non-performing pools.

Employees

As of December 31, 2006 Mortgage Assistance Corporation had 21 employees.

Risk Factors

Cautionary Factors That May Affect Future Results

We provide the  following  cautionary  discussion  of risks,  uncertainties  and
possible inaccurate assumptions relevant to our business and our products. These
are factors  that we think could cause our actual  results to differ  materially
from expected  results.  Other factors besides those listed here could adversely
affect us.

Trends, Risks and Uncertainties

The Company has sought to identify  what it believes to be the most  significant
risks to its business as discussed in "Risk Factors"  above,  but cannot predict
whether or not or to what extent any of such risks may be realized nor can there
be any assurances  that the Company has identified all possible risks that might
arise.  Investors  should  carefully  consider all of such risk  factors  before
making an investment decision with respect to the Company's common stock.

As for the availability of  non-performing  mortgages,  our purchase volume as a
percentage of the industry volume is miniscule.  The  historically  low purchase
prices of mortgages in our niche cannot be guaranteed to continue.

Limited Operating History; Anticipated Losses; Uncertainly of Future Results

The Company has only a limited operating history upon which an evaluation of the
Company  and  its  prospects  can be  based.  The  Company's  prospects  must be
evaluated with a view to the risks encountered by a company in an early stage of
development, particularly in light of the uncertainties relating to the business
model that the Company  intends to market and the  potential  acceptance  of the
Company's  business  model.  The  Company  will be  incurring  costs to develop,
introduce and enhance its products,  to establish  marketing  relationships,  to
acquire and develop  products that will complement  each other,  and to build an
administrative   organization.   To  the  extent  that  such  expenses  are  not
subsequently followed by commensurate revenues, the Company's business,  results
of operations  and financial  condition will be materially  adversely  affected.
There can be no assurance  that the Company will be able to generate  sufficient
revenues from the sale of its products and services.  The Company may experience
negative cash flow from operations for the next several quarters as it continues
to  implement  its  business  model,  and up until  such time as the  Company is
sufficiently capitalized.  The Company may be required to sell additional equity
or debt  securities if cash generated by operations is  insufficient  to satisfy
the  Company's  liquidity  requirements.   The  sale  of  additional  equity  or
convertible debt securities would result in additional dilution to the Company's
shareholders.

Need for Additional Financing

The Company  completed a $1,500,000  preferred  stock  financing  transaction on
November 30, 2006,  which  contains  provisions  that could  provide  additional
preferred  stock  financing of up to $1,500,000 (See Note 14 in the Notes to the
Financial Statements and other disclosures in this Form 10-KSB). As of April 13,
2007 the Company had received an additional  $358,333  toward the first of three
additional tranches of $500,000 in preferred stock financing contemplated by the
November  30,  2006  financing  transaction.  The  Company  anticipates  that an
additional $141,667 will be funded in the near future to complete the first full
subsequent   tranche  of  $500,000  in  preferred  stock  financing  under  this
agreement.  The Company is also actively pursuing alternative financing plans to
fund the Company's  requirements,  and those plans include,  but are not limited
to,  additional  equity  sales  or  debt  financing  under  appropriate   market
conditions,   allegiances   or   partnership   agreements,   or  other  business
transactions  which could generate adequate funding  opportunities.  The Company
continues  to  explore  opportunities  to  secure  additional  sources  of  debt
financing as a means of more cost effectively  acquiring pools of mortgage notes
and  foreclosed  properties.  While the Company is  confident  in its ability to
secure additional capital in the future,  there is no guarantee that the Company
will receive  sufficient  funding to sustain  operations or implement any future
business plan steps.


                                       5
<PAGE>


No Assurance of Success or Profitability

There is no assurance  that the Company will  generate  revenues or profits,  or
that the market  price of the  Company's  outstanding  shares will be  increased
through continued operations of the Company.

Indemnification of Officers and Directors

The  Company's  By-Laws  provide  for the  indemnification,  to the full  extent
allowed by Florida law, of its directors, officers, employees and agents who are
or were a party, or are threatened to be made a party to any threatened, pending
or completed  legal action,  suit or proceeding by reason of the fact that he or
she is or was serving a director,  officer,  employee or agent of the Company or
is or was serving in such capacity at another  entity at the Company's  request.
The extent,  amount and eligibility for such indemnification are determined by a
majority vote of a quorum of disinterested directors, or by a majority vote of a
quorum of disinterested shareholders.

Dependence upon Outside Advisors

To supplement the business experience of its officers and directors, the Company
may be required to employ accountants, technical experts, appraisers, attorneys,
or other  consultants  or advisors.  The  selection of any such advisors will be
made by the Company's officers, without any input by shareholders.  Furthermore,
it is anticipated that such persons may be engaged on an as needed basis without
a continuing  fiduciary  or other  obligation  to the Company.  In the event the
officers of the Company consider it necessary to hire outside advisors,  the may
elect  to hire  persons  who are  affiliates,  if those  affiliates  are able to
provide the required services.

Auditor's  Opinion  Expresses Doubt About The Company's Ability To Continue As a
"Going Concern."

The independent auditor's report issued in connection with the audited financial
statements of the company for the period ended December 31, 2006, indicates that
due to  operating  losses  incurred  during  2006  and  prior  periods,  and the
resulting accumulated  stockholders' deficit and working capital deficit,  among
other factors, may cause the Company to be unable to continue as a going concern
for a reasonable  period of time.  If the Company is unable to fully develop its
business  model and raise  additional  capital,  the  Company  may have to cease
operations,  which would be  detrimental  to the value of the  Company's  common
stock.  The Company can make no  assurances  that its business  operations  will
develop and provide the Company with significant cash to continue operations.

There Has Been A Volatile  Public Market For The Company's  Common Stock And The
Price Of The Company's Stock May Be Subject To Fluctuations


We cannot assure  investors  that a liquid  transparent  trading  market for the
Company's  common stock will develop or be sustained.  Investors may not be able
to resell shares at any price. The market price of the Company's common stock is
likely to be  volatile  and could be  subject to  fluctuations  in  response  to
factors such as the following,  most of which are beyond the Company's  control,
including factors such as:

o    Operating  results that vary from the  expectations of securities  analysts
     and investors;

o    Changes in expectations as to the Company's future  financial  performance,
     including financial estimates by securities analysts

o    The  operations,  regulatory,  market  and other  risks  discussed  in this
     section;

o    Announcements  by the Company or its competitors of significant  contracts,
     acquisitions,   strategic   partnerships,   joint   ventures   or   capital
     commitments;

o    Announcements by third parties of significant claims or proceedings against
     the Company; and

o    Future sales of the Company's common stock.


In addition,  the market for our stock has from time to time experienced extreme
price and volume  fluctuations.  These broad market  fluctuations  may adversely
affect the market price of our common stock in the future.

Risks Relating To Low-Price Stocks.

Because  our stock is quoted on the NASD  Over The  Counter  ("OTC")  Electronic
Bulletin Board and subject to the Penny Stock Regulations,  an investor may find
it difficult to dispose of, or to obtain  accurate  quotations  as to the market
value of, our Company's  securities.  The  regulations  governing  low-priced or
penny stocks  could limit the ability of  broker-dealers  to sell the  Company's
securities and thus the ability of the purchasers and shareholders to sell their
securities in the secondary market.



                                       6
<PAGE>

Limited Market Due To Penny Stock

The Company's stock differs from many stocks, in that it is a "penny stock." The
Securities  and  Exchange  Commission  has adopted a number of rules to regulate
"penny  stocks."  These rules  include,  but are not limited to,  Rules  3a5l-l,
15g-1,  15g-2,  15g-3,  15g-4,  15g-5,  15g-6 and 15g-7 under the Securities and
Exchange Act of 1934, as amended.  Because our  securities  probably  constitute
"penny stock"  within the meaning of the rules,  the rules would apply to us and
our securities.  The rules may further affect the ability of owners of our stock
to sell their securities in any market that may develop for them. There may be a
limited   market  for  penny   stocks,   due  to  the   regulatory   burdens  on
broker-dealers.  The market among dealers may not be active.  Investors in penny
stock  often are  unable to sell  stock  back to the  dealer  that sold them the
stock. The mark-ups or commissions  charged by the broker-dealers may be greater
than any profit a seller may make.  Because of large dealer  spreads,  investors
may be unable to sell the stock immediately back to the dealer at the same price
the dealer sold the stock to the  investor.  In some  cases,  the stock may fall
quickly in value.  Investors  may be unable to reap any profit  from any sale of
the  stock,  if they  can sell it at all.  Stockholders  should  be aware  that,
according to the Securities and Exchange  Commission  Release No. 34- 29093, the
market for penny stocks has suffered in recent years from  patterns of fraud and
abuse.  These patterns include:  - Control of the market for the security by one
or a few broker-  dealers that are often  related to the  promoter or issuer;  -
Manipulation of prices through  prearranged  matching of purchases and sales and
false and misleading  press releases;  - "Boiler room" practices  involving high
pressure sales tactics and unrealistic price projections by inexperienced  sales
persons;  -  Excessive  and  undisclosed  bid-ask  differentials  and markups by
selling broker- dealers;  and - The wholesale  dumping of the same securities by
promoters and broker-  dealers after prices have been  manipulated  to a desired
level,  along with the  inevitable  collapse  of those  prices  with  consequent
investor losses. Furthermore, the "penny stock" designation may adversely affect
the  development  of any public market for the Company's  shares of common stock
or, if such a market develops, its continuation.  Broker-dealers are required to
personally  determine  whether an  investment  in "penny  stock" is suitable for
customers.  Penny  stocks  are  securities  (i) with a price of less  than  five
dollars per share; (ii) that are not traded on a "recognized" national exchange;
(iii)  whose  prices  are not quoted on the NASDAQ  automated  quotation  system
(NASDAQ-listed  stocks must still meet  requirement  (i)  above);  or (iv) of an
issuer with net tangible  assets less than $2,000,000 (if the issuer has been in
continuous  operation for at least three years) or $5,000,000  (if in continuous
operation for less than three years),  or with average  annual  revenues of less
than $6,000,000 for the last three years. Section 15(g) of the Exchange Act, and
Rule 15g-2 of the Commission require  broker-dealers  dealing in penny stocks to
provide potential investors with a document disclosing the risks of penny stocks
and to obtain a manually signed and dated written receipt of the document before
effecting any transaction in a penny stock for the investor's account. Potential
investors  in the  Company's  common  stock are  urged to  obtain  and read such
disclosure  carefully before  purchasing any shares that are deemed to be "penny
stock." Rule 15g-9 of the Commission requires broker- dealers in penny stocks to
approve the  account of any  investor  for  transactions  in such stocks  before
selling  any  penny  stock  to  that  investor.   This  procedure  requires  the
broker-dealer to (i) obtain from the investor information  concerning his or her
financial  situation,  investment  experience  and investment  objectives;  (ii)
reasonably  determine,  based on that  information,  that  transactions in penny
stocks are  suitable  for the  investor  and that the  investor  has  sufficient
knowledge and experience as to be reasonably  capable of evaluating the risks of
penny stock  transactions;  (iii) provide the investor with a written  statement
setting forth the basis on which the  broker-dealer  made the  determination  in
(ii) above;  and (iv) receive a signed and dated copy of such statement from the
investor,  confirming  that it  accurately  reflects  the  investor's  financial
situation,  investment  experience and investment  objectives.  Compliance  with
these requirements may make it more difficult for the Company's  stockholders to
resell their shares to third parties or to otherwise dispose of them.

Future Capital Needs Could Result In Dilution To Investors; Additional Financing
Could Be Unavailable Or Have Unfavorable Terms

The Company's future capital requirements will depend on many factors, including
cash flow from  operations,  general  state of the economy,  available  mortgage
pools,  competing market  developments,  and the Company's ability to market its
proposed products  successfully.  It will be necessary to raise additional funds
through  equity  or debt  financings.  Any  equity  financings  could  result in
dilution to our Company's then-existing stockholders.  Sources of debt financing
may result in higher interest expense.  Any financing,  if available,  may be on
terms  unfavorable  to the  Company.  If adequate  funds are not  obtained,  the
Company may be required to reduce or curtail operations.

No Assurance of Success or Profitability.

There is no assurance that the Company or MAC will generate revenues or profits,
or that the market price of the Company's  outstanding  shares will be increased
by the business combination with MAC.

Limited Operating History

Both MACC and MAC have a limited operating history and our financial health will
be subject to all the risks  inherent  in the  establishment  of a new  business
enterprise.  The likelihood of success of the Company and MAC must be considered
in the light of the problems, expenses, difficulties,  complications, and delays
frequently  encountered  in  connection  with the  startup  and  growth of a new
business, and the competitive  environment in which we will operate. Our success
is dependent upon the successful financing and development of our business plan.
No assurance of success is offered. Unanticipated problems, expenses, and delays
are  frequently  encountered  in  establishing  a new business and marketing and
developing  products.   These  include,  but  are  not  limited  to,  financing,




                                       7
<PAGE>

competition,  the  need  to  develop  customers  and  market  expertise,  market
conditions,  sales,  marketing and governmental  regulation.  The failure of the
Company to meet any of these conditions  would have a materially  adverse effect
upon the Company and may force the Company to reduce or curtail  operations.  No
assurance  can be  given  that  the  Company  or MAC  can or will  ever  operate
profitably.

Reports Filed with the SEC

The  Company  is a  reporting  company.  The public may read and copy the Annual
Report (Form 10-KSB) and any other  materials  filed by the Company at the SEC's
Public  Reference Room at 450 Fifth Street N.W.,  Washington,  D.C.  20549.  The
public may obtain  information on the operation of the Public  Reference Room by
call the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains
reports,  proxy and  information  statements,  and other  information  regarding
issues at http://www.sec.gov.

Item 2 - Properties

The Company,  through MAC, MAC purchases  and manages  pools of distressed  real
estate  secured  mortgages and  promissory  notes.  The types of mortgage  pools
acquired include  non-performing,  charged-off,  sub-prime mortgages,  typically
between 90 days and two years  past due.  The liens are  secured by  residential
real  estate.  MAC  acquires  both  first and  second  mortgages  or liens.  MAC
typically  purchases these  mortgages at a discount to the mortgage  obligation.
Additionally,  when necessary, it will foreclose,  rehabilitate and, or sell the
mortgage or real  estate  securing  the  purchased  mortgages  and deed of trust
promissory  notes. A very small percentage of the acquired loans are subordinate
liens,  which bear risk of being reclassified as unsecured loans if the priority
lien-holder  forecloses on the real estate.  These pools of non-performing  real
estate   mortgages  and  notes  are  purchased  from  banks  and  other  lending
institutions.

After MAC purchases a loan pool, the process of debt resolution  commences.  MAC
works the loan portfolio with the purpose of changing the  non-performing  loans
into either  performing  loans or obtaining a deed to the underlying real estate
or  forecloses on the real estate.  MAC may resell a substantial  portion of its
re-performing  loans in various  sized loan pools and may  foreclose  on certain
real estate properties when portfolio loans continue in default.  As a result of
foreclosure  actions,  MAC will own real estate assets.  These properties may be
rehabilitated, held and ultimately sold.

MAC also enters into joint  venture  agreements  from time to time with  various
investors in the purchase of loan pools.

As of December 31, 2006, the Company owned a number of single-family real estate
properties  in various  parts of the country as a routine  course of it business
operations.  These  properties  may, from time to time, be rented or sold by the
Company.

Pursuant to a purchase contract executed in December 2005, the Company purchased
a 50% interest in a two-story office/warehouse building with 69,551 square feet,
and situated on 5.34 acres of land located at 999 Metro Media in Dallas,  Texas.
Pursuant to the terms of this agreement,  MAC is obligated for the entire amount
of this building's  monthly  mortgage  payment of $8,714 per month,  plus MAC is
responsible  for the  servicing,  maintenance,  and management of this property.
Additionally,  terms of the Company's  agreement with its investment partners in
this building  require the Company to distribute  essentially  all monthly lease
revenues to the investment partners. Pursuant to a lease agreement commencing on
May 19,  2006,  this  "Class B" office / warehouse  facility is now  essentially
fully leased through April 30, 2007, with monthly lease revenues of $17,500.  No
assurance can be provided that the property will be leased beyond April 30, 2007
or that if the property is leased  beyond  April 30, 2007,  that rentals will be
sufficient to cover mortgage and maintenance expenses.  The Company's investment
in this  partnership  is  accounted  for  based on the  consolidation  method as
described  in Note 2 to the  Financial  Statements  and  elsewhere  in this Form
10-KSB.

The Company currently leases a corporate office at 2614 Main St., Dallas, Texas,
75226.   This  is  the  principal   executive  office  of  Mortgage   Assistance
Corporation,  a Texas  corporation.  The annual  rent is  $33,540  and the lease
expires in September 2008.  Pursuant to a new office lease agreement executed on
March 30, 2007 and referenced  here as a subsequent  event,  the Company will be
moving effective May 1, 2007 to 1341 W. Mockingbird  Lane, Suite 1200 W, Dallas,
Texas 75247. A total of 17,563 rentable square feet is contracted for a total of
84 months. Annual rent payments are based on a set schedule commencing at a rate
of $10.25 per square foot for the first twelve  months of  occupancy  and for an
annual rent for the first twelve months of occupancy of $180,021.

Item 3 - Legal Proceedings
There are no material legal proceedings against the Company.

The  Company  is not  aware of any  material  legal  proceeding  to  which,  any
director,  officer,  partnership interest of the Company, or any owner of record
or  beneficial  owner of more than 5% of the Company  common stock is a party to
and which would be adverse to the Company.





                                       8
<PAGE>

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

The following two corporate actions were authorized by unanimous written consent
of the Board of Directors on September 28, 2006,  and  subsequently  approved by
written  consent of holders of 11,034,491  shares of common stock,  constituting
86.7% of the issued and outstanding shares entitled to vote on such actions: (A)
the adoption of the Company's 2006 Equity  Incentive Plan (the "Plan"),  and (B)
an amendment to the Company's Articles of Incorporation  authorizing the Company
to issue up to 3,000,000  shares of  preferred  stock (the  "Amendment").  On or
about October 16, 2006, an Information  Statement was mailed to all shareholders
of record as of September  28, 2006.  The terms of the Plan and the terms of the
Amendment  are  briefly  outlined  below  and are  documented  in  detail in the
Company's prior filings and elsewhere in this Form 10-KSB.

         Action One - Amendment to Articles of Incorporation To Authorize Shares
of Preferred Stock of the Company. The Amendment authorizes the Company to issue
up to 3,000,000 shares of Preferred Stock to be issued in one or more series as
may be established from time to time by resolution of the Board of Directors,
each consisting of such number of shares and having such distinctive designation
or title as shall be fixed by resolutions of the Board of Directors prior to the
issuance of any shares of such series. Each such class or series of Preferred
Stock shall have such voting powers, full or limited, or no voting powers, and
such preferences and relative, participating, optional or other special rights
and such qualifications, limitations or restrictions thereof, as shall be stated
in such resolutions of the Board of Directors providing for the issuance of such
series of Preferred Stock. The Board of Directors is authorized to increase or
decrease (but not below the number of shares of such class or series then
outstanding) the number of shares of any series subsequent to the issuance of
shares of that series.

Action Two - Approval of Equity Incentive Plan. The Equity Incentive Plan allows
the Company to grant stock options,  restricted stock and performance  awards to
officers,  directors,  key employees  and  consultants.  The Company's  board of
directors or committees  thereof will administer the Plan. Subject to adjustment
as provided  in the Plan,  the  maximum  aggregate  number of shares that may be
issued under the Plan is 4,250,000  shares of common stock,  provided,  however,
that (i) the aggregate  number of shares that may be issued as restricted  stock
may not exceed  1,062,500  and (ii) the  aggregate  number of shares that may be
issued under  statutory  stock options may not exceed  2,000,000,  and (iii) the
aggregate number of shares that may be issued under  non-statutory stock options
may not exceed  1,187,500.  Subject to adjustment  as provided in the Plan,  the
aggregate  number of shares that may be issued to any individual under the Plan,
whether issued under options or restricted  stock,  shall not exceed  1,000,000.
The Plan will continue in effect until terminated;  however,  no incentive stock
options or other  awards will be granted  under the Plan after 10 years from the
date the Company's stockholders approved the Plan.



PART II

Item 5 - Market for Common  Equity and  Related  Stockholder  Matters  and Small
Business Issuer Purchases of Equity Securities

Market Price of Common Stock:

There has not been an active market for the Company's securities. The Company's
Common Stock is quoted on the NASD OTC Bulletin Board.

A range of high and low  quotations  for each quarter for the  Company's  Common
Stock for fiscal  years  2005 and 2006 are listed  below.  The  information  was
obtained from the NASD OTC Electronic Bulletin Board (www.otcbb.com). The prices
reported may not be indicative of the value of the Common Stock or the existence
of an active trading market.  The Company does not know whether these quotations
reflect  inter-dealer  prices without retail  mark-up,  markdown or commissions.
These  quotations  may not  represent  actual  transactions.  During  2006,  the
Company's stock was quoted under the symbol MTGC.OB.

                                 2005                      2006
                         -----------------------------------------------
                           Low         High          Low           High
                         -------      ------       -------        ------

      First Quarter       $1.20        $1.80        $1.30          $2.50
      Second Quarter      $1.02        $3.15        $1.05          $1.85
      Third Quarter       $2.15        $3.20        $0.55          $1.55
      Fourth Quarter      $1.55        $3.25        $0.55          $1.01


Holders of Record:

The Company had approximately  1,357 holders of record of its common stock as of
December 31, 2006, holding 12,725,124 common shares issued and outstanding.



                                       9
<PAGE>
<TABLE>
<CAPTION>


The Transfer Agent is Continental Stock Transfer & Trust Company, 17 Battery
Place South, 8th Floor, New York, NY 10004, and their telephone number is (212)
509-4000.

Dividend Policy:

The Company has not  declared  any cash  dividends to the holders of its capital
stock and does not anticipate  declaring or paying  dividends in the foreseeable
future.  Further,  the terms of the Company's  Series A Preferred Stock prohibit
the Company  from  declaring or paying any  dividends  any shares of its capital
stock  unless (1) all  accrued  but unpaid  dividends  on the Series A Preferred
Stock have been,  or are  simultaneously  paid;  and (2) the holders of at least
fifty percent (50%) of the Series A Preferred Stock consent to such dividend.

Securities Authorized for Issuance under Equity Compensation Plans

The  following  table   summarizes  the  Company's  equity   compensation   plan
information  as of  December  31,  2006.  Information  is  included  for  equity
compensation plans not approved by the Company's security holders.

         Table 1.

         Equity Compensation Plan Information

         ------------------------------ -------------------------- ----------------------

         Plan Category                  Number of Securities to    Weighted-average       Number of Securities
                                        be issued upon exercise    Exercise price of      remaining available for
                                        of outstanding options,    outstanding options,   future issuance under
                                        warrants and rights        warrants, and rights   equity compensation
                                                                                          plans (excluding
                                                                                          securities reflected in
                                                                                          column (a)

                                                     (a)                   (b)                      (c)
         ------------------------------ -------------------------- ---------------------- -------------------------
         <S>                            <C>                        <C>                    <C>

         Equity Compensation
         Plans approved by
         security holders                        1,658,200                 $0.94                  2,591,800
         ------------------------------ -------------------------- ---------------------- ------------------------
         Equity Compensation
         Plans not approved by
         security holders                        1,263,916                 $0.36                          0
         ------------------------------ -------------------------- ---------------------- -------------------------
         Total                                   2,922,116                 $0.74                  2,591,800
         -------------------------------------------------------- ----------------------  -------------------------
</TABLE>


Equity Compensation Plan Grants Approved By Security Holders.

     (1) Under the  provisions  of the Plan,  and pursuant to Board of Directors
approval on November 28,  2006,  the Company  granted  statutory  options  (e.g.
incentive  stock  options)  for  223,400  shares of  common  stock,  to  various
employees in  consideration  for  employment  with and services  provided to the
Company.  These options were issued with an exercise  price of $0.85,  which was
the closing trading price per share on the date of the grant. These options were
100% fully vested and exercisable at the date of the grant, and may be exercised
at any time through November 28, 2011. A third-party  consultant  determined the
fair value of these options with a commercially available software product which
utilizes  a  proven  trinomial  lattice  valuation  methodology.  Based  on this
analysis,  the value of the options at grant was determined to be  approximately
$0.37.

     (2) Under the  provisions  of the Plan,  and pursuant to Board of Directors
approval on November 28, 2006, the Company granted  non-statutory  options (e.g.
non-qualified  stock  options)  for  834,800  shares of common  stock to various
individuals in consideration  for prior employment and / or consulting  services
provided to the Company.  These  options  were issued with an exercise  price of
$0.85,  which was the closing  trading price per share on the date of the grant.
These options were 100% fully vested and  exercisable  at the date of the grant,
and may be  exercised at any time  through  November  28,  2011.  A  third-party
consultant  determined  the  fair  value of these  options  with a  commercially
available  software product which utilizes a proven trinomial  lattice valuation
methodology.  Based on this  analysis,  the  value of the  options  at grant was
determined to be approximately $0.38.

     (3) In  connection  with  three-year  employment  agreements  entered  into
between  the Company  and two of its  principal  officers  and  stockholders  on
November 30, 2006, the officers were granted incentive stock options for 600,000
shares of common stock under the Plan. One third of such incentive stock options
will become exercisable upon each successive  anniversary date of the employment
agreements,  provided  that  the  Company  employs  the  officers  on each  such
anniversary  date. A third-party  consultant  determined the fair value of these
options with a commercially  available  software product which utilizes a proven
trinomial lattice valuation  methodology.  Based on this analysis,  the value of
the options at grant was determined to be approximately $0.45.


                                       10
<PAGE>

Equity Compensation Plans Not Approved By Security Holders.

     (1) Mortgage  Assistance Center Corporation signed a Letter Agreement dated
November 29, 2006,  with Michael  Caolo & Associates,  Attorneys and  Counselors
("Caolo") as a  non-exclusive  legal and business  advisor and consultant in the
position  of General  Counsel for MACC.  In  addition  to the cash  compensation
stipulated  in the Letter  Agreement and disclosed in the Notes to the Financial
Statements  contained  in this Form  10-KSB,  Caolo was  granted  equity in MACC
("Equity Fee") in the form of a five year common stock purchase warrant for four
hundred  sixty-seven  thousand  (467,000)  shares of common stock of MACC for no
additional consideration other than an exercise price of fair market value to be
paid by Caolo  whenever such common stock  purchase  warrant is  exercised.  The
Letter Agreement establishes that this common stock purchase warrant for 467,000
shares  of  common  stock of MACC is  partially  being  made in lieu of and as a
replacement for that certain  previous common stock purchase warrant for 317,000
shares of common stock of Mortgage  Assistance  Corporation  which was,  through
mutual mistake,  erroneously set forth in the previous Agreement dated September
1, 2005, between Michael Caolo & Associates and Mortgage Assistance Corporation,
the subsidiary,  instead of MACC, the parent corporation, which was the intended
proper  party.  These  warrants  were issued at an  exercise  price of $0.39 per
share,  subject to adjustment in  accordance  with the terms of the warrants.  A
third-party  consultant  determined  the  fair  value of  these  options  with a
commercially  available  software  product  which  utilizes  a proven  trinomial
lattice  valuation  methodology.  The value of the warrants was determined to be
$0.62 per warrant share. These warrants expire on November 30, 2011.

     (2) On November 27, 2006, the Company executed a Letter Agreement to retain
Parkwood Advisors, L.L.C. ("Parkwood") as a non-exclusive financial and business
advisor to MACC. In addition to the cash  compensation  stipulated in the Letter
Agreement and disclosed in the Notes to the  Financial  Statements  contained in
this Form 10-KSB, Parkwood was granted equity in MACC ("Equity Fee") in the form
of a five year common  stock  purchase  warrant for one hundred  fifty  thousand
(150,000) shares of common stock of for no additional  consideration  other than
an exercise  price of fair market  value to be paid by  Parkwood  whenever  such
common stock purchase  warrant is exercised.  The Letter  Agreement  establishes
that this common stock  purchase  warrant for 150,000  shares of common stock of
MACC is partially  being made in lieu of and as a  replacement  for that certain
previous  common stock  purchase  warrant for 100,000  shares of common stock of
Mortgage  Assistance  Center  Corporation  which was set  forth in the  previous
Letter Agreement dated May 5, 2006, between Parkwood Advisors,  LLC and Mortgage
Assistance Center  Corporation.  These warrants were issued at an exercise price
of $0.39 per share,  subject to adjustment  in accordance  with the terms of the
warrants.  A third-party  consultant  determined the fair value of these options
with a commercially available software product which utilizes a proven trinomial
lattice  valuation  methodology.  The value of the warrants was determined to be
$0.62 per warrant share. These warrants expire on November 30, 2011.

     (3) At December  31,  2006,  the Company had an  obligation  to a financial
consultant  pursuant  to a June 19,  2006  Consulting  Agreement  for an  equity
compensation  fee of $106,106,  representing  five percent (5%) of the amount of
monies loaned to the Company by lenders  procured by the consultant.  The equity
compensation  fee is to be converted  to a share basis  according to the closing
trading price per share on the date each  individual  funding tranche closes and
paid in the form of five-year common stock purchase warrants of the Company with
an aggregate fair market value equivalent to the equity compensation fee earned.
This  calculation  converts  the  equity  compensation  fee to a total of 96,916
warrant  shares,  with an  exercise  price  of $.10  per  share.  A  third-party
consultant  determined  the  fair  value of these  options  with a  commercially
available  software product which utilizes a proven trinomial  lattice valuation
methodology.  The value of the warrants was  determined  to be $0.99 per warrant
share These warrants expire on December 31, 2011.

     (4) On November 30, 2006,  the Company  issued two,  ten-year  common stock
purchase warrants for seventy five thousand (75,000) shares of common stock each
to William G. Payne and to Rod Cain Jones in conjunction with their  appointment
to the Company's  board of directors.  These  warrants have an exercise price of
$.39 per share,  which price may be adjusted with the terms of the  warrants.  A
third-party  consultant  determined  the  fair  value of  these  options  with a
commercially  available  software  product  which  utilizes  a proven  trinomial
lattice  valuation  methodology.  The value of the warrants was determined to be
$0.62 per warrant share. These warrants expire November 30, 2016.

Recent Sales of Unregistered Securities:

     On June 23,  2005,  the Company  adopted a Legal  Services  Plan.  The Plan
reserved 400,000 shares and was registered on a Form S-8 registration  statement
filed on June 23, 2005. The Company's Board of Directors  administered the Plan.
A total of 400,000 shares were issued  including:  (a.) 300,000 shares issued to
Mary F. Seymour,  Attorney at Law; and (b.) 100,000  shares issued to Gregory M.
Wilson,  Attorney at Law, both  issuances were made in  consideration  for legal
services  provided to the Company during 2005. These advisors are not engaged to
provide any additional services in the future.

Small Business Issuer Purchases of Equity Securities:
----------------------------------------------------

Not Applicable


                                       11
<PAGE>

Item 6 - Management's Discussion and Analysis or Plan of Operation

The following  discussion and analysis  should be read in  conjunction  with the
Consolidated  Financial  Statements  and  Notes  thereto,  and  other  financial
information  included  elsewhere  in this  Form  10-KSB.  This  report  contains
forward-looking statements that involve risks and uncertainties.  Actual results
in future periods may differ  materially from those expressed or implied in such
forward-looking  statements as a result of a number of factors,  including,  but
not  limited  to, the risks  discussed  under the  heading  "Risk  Factors"  and
elsewhere in this Form 10-KSB.

Business Overview:

On  May  10,  2005,  Mortgage  Assistance  Center  Corporation  ("MACC"  or  the
"Company")  entered  into  a  Business   Combination   Agreement  with  Mortgage
Assistance  Corporation ("MAC"), a Texas corporation.  MAC became a wholly owned
subsidiary  of MACC upon  completion  of the  acquisition  of all MAC  shares in
August 2005. MACC buys, sells and manages  distressed  single-family real estate
and non-performing mortgages secured by single-family residential real estate in
the secondary market in the United States through its subsidiary, MAC.

MAC  purchases  non-performing,  charged-off,  sub-prime  first and second  lien
mortgages. These mortgages are secured by real estate, and are typically 90 days
to 2 years past due at the time of purchase.  These  mortgages  are purchased in
pools or portfolios of assets from major lending  institutions  and usually at a
substantial discount to the outstanding  principal balance.  This business model
enables MAC to provide  assistance  to  borrowers  and to provide  liquidity  to
lenders  that need to remove  non-performing  loans from their books in order to
restore  their  lending  power  or  comply  with   government   rules  regarding
non-performing loans.

The Company generates revenue through three primary  activities  including:  (a)
immediate  resale of its mortgage notes to other investors;  (b)  rehabilitating
the note to performing status and reselling it to a secondary investor;  and (c)
foreclosing  or obtaining a  deed-in-lieu  of  foreclosure  on  properties  that
continue to be  non-performing  and either  renting or selling the real  estate.
Historically,  the proportion of the Company's revenue generating activities has
been heavily  weighted  toward the immediate  resale of mortgage  notes to other
investors.  Over time and with increased  capitalization,  the Company's expects
its revenue mix will include  more  instances  of  reforming  notes,  collecting
"short-sale"  payments where the owner-occupant  successfully pays off the note,
and foreclosure  activity.  The Company  believes that current and future market
conditions signal an increasing rate of foreclosures of residential  properties.
Accordingly,  the Company anticipates increased business opportunities from this
segment.

Secondarily,  MAC generates additional revenue via servicing fees charged to its
various partnerships through which MAC maintains an equity ownership position in
a commonly owned note pool.  After the Company acquires a loan or pool of loans,
the process of resolution  begins with the borrower,  changing the status of the
non-performing  loans into either  performing  loans or  foreclosing on the real
estate.  The  Company  may  resell  a  portion  of its  re-performing  loans  in
various-sized  loan pools. The Company may foreclose on certain  properties when
loans held in its portfolio continue to be in default.  As a result, the Company
will be  engaged  in owning  single-family  dwellings  and  possibly  other real
estate. Such foreclosed real estate may be held,  rehabilitated where necessary,
and  sold.  The  Company  has  historically   sustained  recurring  losses  from
operations and had an accumulated  stockholders'  deficit and a working  capital
deficiency as of December 31, 2006. These circumstances  create substantial risk
regarding the Company's ability to continue as a going concern and are discussed
in this section and elsewhere in this Form 10-KSB.

Liquidity and Capital Resources:

As of December 31, 2006,  the Company  lists cash on hand in banks of $1,205,120
up from the $598,978  reported as of the calendar year ended  December 31, 2005.
This reflects the impact of the net proceeds  remaining on hand at year end from
the Series A Preferred  Stock financing  transaction  discussed in detail in the
Notes to the  Financial  Statements  and  elsewhere in this Form  10-KSB.  Total
assets of $9,553,085 are recorded as of December 31, 2006,  which is an increase
of $5,813,170  in total assets over the calendar  year ended  December 31, 2005.
This  increase  reflects  the  purchase of  additional  pools of mortgage  notes
acquired through ongoing  operations  during the year as well as the impact of a
change in accounting  presentation based on the consolidation method rather than
the equity  method  that the  Company  had used  previously.  According  to this
methodology the consolidated financial statements include 100% of the assets and
liabilities directly owned by the Company and 100% of the assets and liabilities
of six unincorporated  investment  entities in which the Company maintains a 50%
ownership position.  The rationale and generally accepted accounting  principles
for this change are discussed in detail in the Notes to the Financial Statements
and elsewhere in this Form 10-KSB.

Of the total assets of MACC, the portion  consisting of portfolio  assets (which
includes  purchased  sub-prime  and  non-performing  mortgage  notes  and  other
foreclosed property which the Company subsequently reforms or resells) is listed
at the total actual  acquisition  cost basis,  plus accrued  servicing costs and
payments,  if any, of $6,798,509 net of an impairment  reserve of $253,508 as of
December 31, 2006. This represents an increase in portfolio assets of $5,090,456
from  calendar  year  2005.  On a fully  consolidated  basis,  if  MACC's  total
portfolio  assets were to be stated at an  estimated  fair  market  value of the
underlying properties,  the Company anticipates that these properties would have
an estimated fair market value of approximately $18,800,000.



                                       12
<PAGE>

As a function of its ongoing  operations,  the Company acquired various pools of
mortgage  notes from various  sources  throughout the year.  These  acquisitions
included  both  mortgage  notes and  properties  on a real  estate  owned  basis
("REOs")  acquired for the Company's own portfolio as well as mortgage notes and
REOs acquired  directly by the Company's  various  investment  partnerships  for
their respective  portfolios.  In total, these combined acquisitions during 2006
included a total of 602  mortgage  notes or REOs.  The total  aggregate  initial
acquisition costs, including closing costs and administrative fees, for mortgage
notes and REOs acquired during the year were approximately $6,761,896.

Based on current market conditions and anticipated future market conditions, the
Company  expects  an  increasing  number of large  pools of  mortgage  notes and
foreclosed  properties  to become  available  for purchase over the next several
years. The Company's ability to participate at a meaningful level in this market
is dependent on adequate capitalization.

In addition to the Company's  portfolio assets  maintained for sale, the Company
also lists  fixed  assets  including  land,  building  improvements,  and office
furniture  and  equipment  of  $1,351,601  net of  accumulated  depreciation  of
$73,468.

As of December 31, 2006,  the Company  reports total  liabilities of $10,231,234
including total current liabilities of $2,235,563; long-term debt of $2,529,128;
and minority interests in investment partnerships of $5,466,543.  The $5,466,543
in minority  interests  reflects the cash  investments  made by  individuals  or
third-party  entities into various joint  ventures,  single-purpose  entities or
profits   participation   agreements  that  the  Company  actively  manages  and
materially   participates  in.  The  accounting  treatment  for  these  minority
interests  is  discussed  in  greater  detail  in the  Notes  to  the  Financial
Statements and elsewhere throughout this Form 10-KSB.

Included in the current  liabilities of $2,235,563 are two non-interest  bearing
loans  from  minority  interest  partners  in one of  the  Company's  investment
partnerships.  First,  $1,480,136 of the total  current notes payable  amount is
attributed to MAP/MAC,  L.L.C.  Principal from this note is to be repaid through
the  distribution  of net proceeds  derived from the sale of mortgage  notes and
properties owned by this entity. This note does not have a set maturity date and
the Company  anticipates  that the  principal  will be repaid over time  through
normal  operations.  Second,  an  additional  $42,179 of the total current notes
payable  amount is attributed to a similarly  structured  profits  participation
agreement  with an  individual  investor who will be repaid from the proceeds of
sales of the underlying  jointly-owned  assets when and if these are sold.  This
note is due during 2007.

The Company records a current liability for accrued stock-based  compensation of
$95,947 reflecting the portion of earned but un-issued stock-based  compensation
as of December  31,  2006.  Other  current  liabilities  as of December 31, 2006
include  $241,301 in accounts  payable to trade vendors and others;  $182,532 in
accrued fees and wages; and $169,068 in other accrued liabilities.

Long-term  debt  consists  of notes  payable  to  individuals  and  others,  and
mortgages  payable.  The long-term notes payable include promissory notes issued
for the  purpose  of  acquiring  pools  of  non-performing  mortgage  notes  and
properties.  Historically, the Company has financed the purchase of its mortgage
notes and properties through two primary means:  first,  through the issuance of
debt to individuals or small investment partnerships; and second, by forming and
materially  participating in various  investment  partnerships.  Pursuant to the
terms of the Company's Series A preferred stock financing  transaction described
in the Notes to the Financial  Statements and elsewhere in this Form 10-KSB, the
Company  successfully  completed the  restructuring  or  elimination  of certain
promissory notes and other short-term loans with current or past-due maturities.
The result of this  restructuring of the Company's prior promissory notes is the
remaining  balance as of December 31, 2006,  of  $1,492,768  in long-term  notes
payable.  These notes have various  maturity dates, the earliest of which occurs
in  October  2008.  A  detailed  schedule  of these  long-term  notes  and their
respective terms is provided in the Notes to the Financial Statements section of
this Form 10-KSB.  As further  described in Note 8 in the Financial  Statements,
the Company  reports  total  mortgages  payable of $1,060,760  which  includes a
long-term portion  consisting of $990,412 for the remaining mortgage balance due
on the Metro Media property;  a $70,348  mortgage  balance due for an individual
residential  property the Company  currently  owns and intends to sell;  plus, a
current portion of mortgages payable of $24,400.

The equity  section of the balance sheet shows the effect of the recent Series A
preferred  stock  financing,  with  1,500,000  shares  of  Series A  convertible
preferred  stock (par value $0.001) issued and  outstanding  corresponding  to a
preferred  capital  stock  entry  of  $1,500.  The  Company  also has a total of
12,725,124  shares of common stock (par value $0.001) issued and  outstanding as
of  December  31,  2006,  with a  corresponding  common  capital  stock entry of
$12,726; and additional paid-in capital of $2,481,413.  As of December 31, 2006,
and as a result of the continued  operating  losses the Company shows a retained
earnings  deficit of ($3,518,248)  and a total  stockholders'  equity deficit of
($678,149)  bringing total liabilities and stockholders'  equity into balance at
$9,553,085.

Management's Plans to Raise Capital:

The continued operation of the Company will be largely influenced by its ability
to raise capital for the  acquisition of mortgage  pools and to provide  working
capital to fund  operating  expenses of the Company prior to the point where the
Company can achieve consistent  earnings  performance.  As a fundamental part of
the Company's financing strategy,  the Company entered into a Series A Preferred
Stock and Common Stock Warrant  Purchase  Agreement  ("Purchase  Agreement")  on
November 30, 2006 with W.C. Payne  Investments,  L.L.C. and FAX/MACC,  L.P. (the
"Investors") pursuant to which the Company sold to Investors 1,500,000 shares of
the Company's Series A Preferred Stock at a price of $1.00 per share, as well as
warrants  to  purchase  4,556,694  shares of the  Company's  common  stock at an



                                       13
<PAGE>

exercise  price of $0.01 per  warrant  share.  Under  the terms of the  Purchase
Agreement, the Investors purchased 1,500,000 of the preferred shares on November
30, 2006, with an additional 1,500,000 preferred shares to be purchased in three
increments of 500,000,  conditioned  on the  satisfaction  of certain  financial
benchmarks  set  forth in the  Purchase  Agreement  on March  31,  June 30,  and
September  30,  2007.  Holders of the  preferred  stock are  entitled to receive
cumulative cash dividends,  out of any assets legally available,  at the rate of
10% per annum (of the  original  per share  issue  price of $1.00)  per share of
preferred  stock,  accrued and compounded on a quarterly  basis.  Such dividends
will have  preference  over any  payment or  declaration  of a dividend or other
distribution  on the Company's  common stock.  As of April 13, 2007, the Company
had received an  additional  $358,333  toward the first of the three  additional
tranches of $500,000 in preferred stock  financing  contemplated by the November
30, 2006  financing  transaction.  The Company  anticipates  that an  additional
$141,667 will be funded in the near future to complete the first full subsequent
tranche of $500,000 in preferred stock financing under this agreement.

Subsequent  to closing  the Series A  financing  transaction,  the  Company  has
continued  to  explore  opportunities  to  secure  additional  sources  of  debt
financing as a means of more cost effectively  acquiring pools of mortgage notes
and  foreclosed  properties.  The Company  anticipates  that it will continue to
depend on external financing in the foreseeable future, and it cannot be assured
that  adequate  financing  will be  available at all or at terms  acceptable  to
management.  These  conditions  are described in more detail in this section and
elsewhere throughout this Form 10-KSB and previous filings.

Previously,  on October 20,  2005,  the Company  executed  two  agreements  with
Mercatus & Partners,  L.P.  providing  for the  purchase of a combined  total of
1,532,568  shares of Common Stock  (currently  held in escrow by the  investment
banking firm of Brown Brothers  Harriman) and the combined gross proceeds to the
Company of $2,000,000 through a complex overseas transaction  involving a number
of European  banking  institutions.  This agreement is subject to and contingent
upon a substantial  number of conditions beyond the control of the Company,  and
as of the date of this  filing,  the Company has  received no funding from these
agreements.  Consequently,  the Company considers these  transactions to be void
for  reasons  of the  non-performance  of  Mercatus  &  Partners,  L.P.  and the
Company's legal counsel has initiated the termination of these agreements.

Results of Operations:

Revenues

For the year ended  December  31, 2006,  the Company  recorded  gross  operating
revenues  of  $2,784,104.  This  includes  total  sales of  portfolio  assets of
$2,054,114;  servicing  fees and  commissions  from  affiliates  and  others  of
$210,635; rental income of $134,550; and other miscellaneous income of $384,805.
The Company  reports net  operating  revenue by deducting  the cost of portfolio
assets sold from gross operating revenues. For the year ended December 31, 2006,
the Company lists $1,282,259 in net operating  revenues.  This compares to gross
operating  revenues for the year ended  December 31, 2005, of $2,526,963 and net
operating revenues of $1,040,794.

Operating Expenses

The Company records  $3,115,764 in total  operating  expenses for the year ended
December 31, 2006.  Total  salaries,  wages and contract  labor expenses for the
calendar year 2006 were $1,313,373 compared to $752,322 recorded during calendar
year 2005.  This  increase  is driven  primarily  by the  non-cash  compensation
expense  recognized  by the  Company for  various  grants of options  awarded to
employees and  contractors  under the  Company's  Equity  Incentive  Plan and as
disclosed in the Notes to the  Financial  Statements  and elsewhere in this Form
10-KSB.  Going forward the Company  anticipates  the need to hire additional key
sales  and  staff  resources  drive  growth  and  increase  capabilities.  Other
miscellaneous  operating expenses include  depreciation and amortization expense
of $43,181, and a charge for bad debts expense of $182,443.

Other selling,  general and administrative  expenses for the year ended December
31, 2006, were $1,576,767 compared to $725,085 for the year prior. This increase
is driven  primarily  by the non-cash  compensation  expense  recognized  by the
Company  for various  grants of warrants  issued to  advisors,  consultants  and
Directors as disclosed in the Notes to the Financial Statements and elsewhere in
this Form  10-KSB.  This  increased  SG&A  expense  also  reflects the impact of
additional  transaction-related  costs incurred pursuant the Series A financing;
scaling of the normal and customary SG&A expense;  plus the non-salary component
of continued  investment in the  infrastructure  development  projects described
below.

Build-out of infrastructure  and capabilities to facilitate  substantial  growth
and profitability. Beginning in 2005 and continuing throughout 2006, the Company
concentrated  on  building  a scalable  enterprise  to  achieve  efficiency  and
profitability as the Company  anticipates  increased growth made possible by the
Series A financing  closed during the fourth calendar quarter of 2006. Two major
internal  infrastructure  build-out  projects were  continued  during 2006. As a
result  of  these  infrastructure  upgrades,  the  Company  is now  able to more
efficiently  service a much larger volume of mortgages than was previously being
serviced. These projects include the following:

1. The Affiliate Network.  The Company has recruited and cultivated a nationwide
network of individual and boutique  investors that serve as an important part of
MACC's ability to quickly resell its notes,  note pools,  and owned real estate.
At present the Company  maintains a network of approximately  2,500 investors in
approximately 37 states.  Going forward,  the Company will continue to build and



                                       14
<PAGE>

maintain  this  valuable  resource,  and will  increasingly  provide  additional
services on a for-fee  basis to  Affiliate  Network  investors  thereby  further
extending the Company's revenue model.

2. The Interlink Loan Servicing System ("ILS"). Beginning in 2005 and continuing
throughout 2006, the Company implemented an industry leading enterprise software
platform  that will  substantially  improve  MACC's  administrative  efficiency,
create automated workflow through to the financial  accounting  system,  provide
real-time access to inventory,  support  management's data requests and internal
reporting  needs,  and enhance  the  Company's  ability to comply with  external
reporting and regulatory requirements. The Company has adapted the ILS system to
support MACC's specific requirements.  ILS is considered to be fully scalable to
increased  numbers  of  transactions   with  little  additional   infrastructure
investment required beyond normal and customary maintenance and upgrades.

In  spite  of  demonstrating  substantial  growth  and  diversification  in  the
Company's  lines of revenue,  the Company  recorded  an  operating  loss for the
calendar year ended December 31, 2006, of ($1,833,505)  compared to an operating
loss of ($662,011) for the calendar year ended December 31, 2005.

Other Income and Expense

The  Company  reports  $131,739  in  interest  and other  income  and a total of
($398,642)  in  interest  expense  for a net total  other  income and expense of
($266,903) for the year ended December 31, 2006.

Net Loss

The Company records a loss before minority  interests of ($2,100,408) and netted
against losses of the minority interests in subsidiaries net earnings of $90,233
the Company realized a net loss of ($2,010,175)  during 2006. This compares to a
net  loss of  ($1,508,073)  during  the  year  ended  December  31,  2005.  On a
weighted-average  basis of the number of shares of common stock  outstanding for
the year, this equals a net loss per share of ($0.16) during 2006, compared to a
net loss per share of ($0.12) during 2005.

Cash Flows:

During the twelve  months ended  December 31, 2006,  the Company  lists net cash
used by operating activities of ($6,260,343). This includes the net loss for the
year of  ($2,010,175)  plus total  adjustments of  ($4,250,168) to reconcile net
loss to net cash  provided by or (used by) operating  activities.  This includes
the  following  uses of cash from  operating  activities:  increase in portfolio
assets, ($5,090,456), losses in minority interests in subsidiaries' net earnings
of ($90,233);  increase in prepaid expenses and other assets of ($161,310);  and
an  increase  in  accounts  payable  to trades and  others of  ($225,888).  This
includes the following sources of cash from operating activities:  depreciation,
$43,181; decrease in accounts receivable from related parties, $58,995; increase
in non-cash  stock-based  compensation,  $992,182;  increase in accrued fees and
wages, $168,857; and an increase in other accrued liabilities of $54,504.

During this period, the company reports net cash used by investing activities of
($57,438)  which was the result of various  purchases of property and  equipment
for use in operating the business.

During the twelve  months ended  December 31, 2006,  the Company  lists net cash
provided by financing  activities  of  $6,923,923.  This  includes the following
sources of cash from financing activities: the net proceeds from the issuance of
preferred stock in the amount of $1,413,015;  the proceeds from issuance of debt
to  individuals  and  others in the  amount  of  $1,793,000;  and total  capital
contributions from minority interests of $5,101,546. This includes the following
uses of cash from financing  activities:  repayments of debt to individuals  and
others,   ($1,075,997);   distributions  to  minority   interests,   ($236,223);
repayments of mortgage  loans,  ($10,844);  and net repayments to a stockholder,
($60,574).

The sources and uses of cash from operating,  investing and financing activities
result in a net  increase in cash of $606,142  for the year ended  December  31,
2006, and results in total cash at the end of the year of $1,205,120.

Critical Accounting Policies and Estimates:

Management's  discussion  and analysis of results of  operations  and  financial
condition are based on the Company's consolidated financial statements that have
been prepared in accordance with accounting principles generally accepted in the
U.S. The preparation of these financial statements requires that management make
estimates  and  assumptions  that  affect the  amounts  reported  for  revenues,
expenses, assets, liabilities and other related disclosures.  Actual results may
or may not differ from these  estimates.  These key accounting  policies include
revenue recognition,  income taxes,  insurance,  stock options, and valuation of
long-lived assets.


                                       15
<PAGE>

Revenue Recognition:

The Company  recognizes revenue from real estate and mortgage product sales when
title and risk passes to the buyer and when the conditions to the sales contract
are satisfied.  Provisions for certain sales  incentives,  trade  promotions and
discounts to customers are accounted for as reductions in  determining  sales in
the same period the related sales are recorded.

Long-Lived and Intangible Assets:

The  Company  assesses  changes in  economic  conditions  and makes  assumptions
regarding  estimated  future cash flows in evaluating the value of the Company's
inventory of notes,  real estate,  fixed assets,  goodwill and other non-current
assets.  As these  assumptions and estimates may change over time, it may or may
not be necessary for the Company to record impairment  charges.  Under Generally
Accepted  Accounting  Principles,  the value of portfolio  assets on the balance
sheet is recorded based on actual  acquisition  costs, not the face value of the
unpaid  principle  balance  of the  mortgage  notes  receivable  or value of the
underlying  real  estate.  If assets are deemed  impaired,  those assets will be
discounted  to the net  realizable  value.  Since the Company's  business  model
consists of buying  non-performing  assets at a substantial discount to the face
value of the existing  mortgage note or property,  the acquisition cost basis of
the Company's portfolio assets has the effect of substantially  understating the
estimated  true  market  value of the  assets  when sold at retail or  wholesale
values.

Insurance:

The Company carries  directors' and officers'  insurance in addition to standard
liability  and  casualty  insurance  for the Company and its  offices.  Property
hazard  insurance on other real estate is carried on properties that the Company
deems  significant,  but is not carried on certain low value properties where it
is uneconomic to do so.

Balance Sheet Arrangements:


Not applicable.

Stock Options:

In October 2006, the stockholders of the Company adopted the Mortgage Assistance
Center  Corporation  2006 Equity  Incentive Plan (the "Plan"),  which allows the
Company to grant  stock  options,  restricted  stock and  performance  awards to
officers,  directors,  key employees  and  consultants.  The Company's  board of
directors or committees  thereof will administer the Plan. Subject to adjustment
as provided  in the Plan,  the  maximum  aggregate  number of shares that may be
issued under the Plan is 4,250,000  shares of common stock,  provided,  however,
that (i) the aggregate  number of shares that may be issued as restricted  stock
may not exceed  1,062,500  and (ii) the  aggregate  number of shares that may be
issued under  statutory  stock options may not exceed  2,000,000,  and (iii) the
aggregate number of shares that may be issued under  non-statutory stock options
may not exceed  1,187,500.  Subject to adjustment  as provided in the Plan,  the
aggregate  number of shares that may be issued to any individual under the Plan,
whether issued under options or restricted  stock,  shall not exceed  1,000,000.
The Plan will continue in effect until terminated;  however,  no incentive stock
options or other  awards will be granted  under the Plan after 10 years from the
date the Company's stockholders approved the Plan.

The per share exercise price for shares to be issued pursuant of the exercise of
an option will be determined by the Board;  however, each option will be granted
at an exercise  price equal to no less than the fair market  value of a share on
the date of grant,  except that the case of an incentive stock option granted to
an employee who, at the time the option is granted,  owns stock  possessing more
than 10 percent of the total  combined  voting  power of all classes of stock of
the Company or any Parent or Subsidiary,  each  incentive  stock option shall be
granted at an exercise price equal to no less than 110% of the fair market value
of a share on the date of grant.



Employee Benefit Plans:

The Company has no retirement or pension  plans at this time.  Benefits  include
health  insurance,  sick pay,  and paid  vacation  as  outlined  in the  Company
Employee's Manual.

Forward Looking Statements:

The Company has included  forward-looking  statements  in this report.  For this
purpose,  any  statements  contained in this report that are not  statements  of
historical fact may be deemed to be forward looking statements. Without limiting
the foregoing, words such as "may", "will", "expect",  "believe",  "anticipate",
"estimate",  "plan" or "continue" or the negative or other variations thereof or
comparable  terminology  are  intended to identify  forward-looking  statements.
These statements by their nature involve  substantial  risks and  uncertainties,
and actual  results  may differ  materially  depending  on a variety of factors.
Factors that might cause  forward-looking  statements to differ  materially from
actual  results  include,  among other  things,  overall  economic  and business
conditions,  demand  for the  Company's  products,  competitive  factors  in the



                                       16
<PAGE>
industries in which we compete or intend to compete,  and other uncertainties of
the Company's future acquisition plans.

Quantitative and Qualitative Disclosures about Market Risk:

The  Company  does  not  issue  or  invest  in  financial  instruments  or their
derivatives for trading or speculative  purposes.  The operations of the Company
are conducted  primarily in the United States,  and, are not subject to material
foreign  currency  exchange risk.  Although the Company has outstanding debt and
related  interest  expense,  market risk of interest rate exposure in the United
States is currently not material.

Item 7 - Financial Statements

The required financial statements begin at Page F-1 of this document.

Item 8 -  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure

     There were no disagreements  related to accounting principles or practices,
financial statement disclosure, internal controls or auditing scope or procedure
during the past two fiscal  years and  interim  periods,  including  the interim
period up through the date the relationship ended.

Item 8A - Disclosure Controls and Procedures

(a)  Evaluation of Disclosure Controls and Procedures.

As of the end of the reporting  period,  December 31, 2006, the Company  carried
out an evaluation,  under the supervision of and with the  participation  of the
management, including the Company's Chairman and Chief Executive Officer and the
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's  disclosure  controls and procedures pursuant to Rule 13a-15(e) of the
Securities  Exchange Act of 1934 (the "Exchange Act"), which disclosure controls
and procedures are designed to insure that information  required to be disclosed
by a company in the reports  that it files under the  Exchange  Act is recorded,
processed, summarized and reported within required time periods specified by the
SEC's  rules and  forms.  Based upon that  evaluation,  the  Chairman  and Chief
Executive  Officer and the Chief Financial  Officer concluded that the Company's
disclosure  controls and  procedures  are  effective in timely  alerting them to
material  information  relating  to the  Company  required to be included in the
Company's period SEC filings.

(b)  Changes in Disclosure Controls and Procedures.

Subsequent  to the date of such  evaluation  as  described in  subparagraph  (a)
above, there were no changes in the Company's disclosure controls and procedures
or other  factors that could  significantly  adversely  affect  these  controls,
including any  corrective  action with regard to  significant  deficiencies  and
material weaknesses.

(c)  Limitations.

The  Company's  management,  including  the Chief  Executive  Officer  and Chief
Financial Officer, does not expect that the disclosure controls will prevent all
errors or all instances of fraud. A control system,  no matter how well designed
and operated,  can provide only  reasonable,  not absolute,  assurance  that the
control system's objectives will be met. Further, the design of a control system
must reflect the fact that there are resource  constraints,  and the benefits of
controls  must be  considered  relative to their costs.  Because of the inherent
limitations  in all control  systems,  no  evaluation  of  controls  can provide
absolute  assurance  that all control  issues and  instances  of fraud,  if any,
within the Company have been detected.  These inherent  limitations  include the
realities that judgments in  decision-making  can be faulty, and that breakdowns
can occur because of simple error or mistake.  Controls can also be circumvented
by the individual acts of some persons,  by collusion of two or more people,  or
by management override of the controls.  The design of any system of controls is
based in part upon certain  assumptions  about the  likelihood of future events,
and any design may not succeed in achieving its stated goals under all potential
future conditions.  Over time, controls may become inadequate because of changes
in conditions  or  deterioration  in the degree of  compliance  with policies or
procedures.  Because of the  inherent  limitation  of a  cost-effective  control
system, misstatements due to error or fraud may occur and not be detected.

8B. Other Information.

Not applicable.



                                       17
<PAGE>

PART III

Item  9  -  Directors,   Executive  Officers,  Promoters  and  Control  Persons;
Compliance with Section 16(a) of the Securities Exchange Act of 1934

The Officers and Directors of MACC during 2006 were as follows:

Name                   Age    Position and Tenure

Dale J. Hensel         37     President, CEO, CFO, Chief Accounting Officer, and
                              Director (Appointed March 19, 2004)

Dan Barnett            48     Vice President, COO (Appointed March 19, 2004)
                              Director (Appointed November 30, 2006)

William G. Payne       41     Director (Appointed November 30, 2006)

Rod Jones              41     Director (Appointed November 30, 2006)


The Officers and Directors of MAC, the Company's wholly owned subsidiary, during
2006 were as follows:

Name                   Age    Position and Tenure

Dale Hensel            37     President, CEO, Director

Dan Barnett            48     V.P., COO, Director

Michelle Taylor        61     Executive V.P. / Corporate Development

Sandra Valiquette      66     CFO

William G. Payne       41     Director

Rod Jones              41     Director



Dale Hensel, President, CEO, Director.

Dale J. Hensel was  nominated  to serve as sole  Director  and  President by the
former board of directors on March 5, 2004.  The former  directors  and officers
resigned  their  director  and officer  positions  March 5, 2004 and Mr.  Hensel
consented  to the  nomination  on March  19,  2004.  In  1999,  Mr.  Hensel  was
self-employed as a real estate investor of multi-family residential property. In
May of 1999, he became President of Meadow Wind, LLC, the co-owner of a 400 unit
apartment  complex in Dallas,  Texas.  In February 2000, he sold his interest in
Meadow  Wind,  LLC and was  appointed  President  and  member  of the  board  of
directors of Remington-Hall Capital Corporation, a financially troubled publicly
traded  corporation.  His principal role was to implement corporate clean-up and
reorganization  efforts.  In  October  2000,  he  resigned  his  positions  with
Remington-Hall.  In February 2001, he formed H&L International Investments, Inc.
The  company's   principal   business   operations   involved  the  acquisition,
rehabilitation  and sale of  distressed  single-family  properties in the Dallas
area.  In  October  2001,  he was  asked  once  again  to act  as  president  of
Remington-Hall  and he consented.  In September 2002, he once again resigned and
the company subsequently filed for bankruptcy  protection.  In February of 2002,
he  and  others  formed  Note,  Inc.,  which  conducted   business  as  Banker's
Assistance.  Its principal corporate business was the purchase of non-performing
real estate  secured  promissory  notes.  He left the company in April 2003.  In
April 2003, he formed Mortgage Assistance Corporation,  a company devoted to the
development of purchase of non-performing  real estate secured  promissory notes
and real  property  investment.  Pursuant to the  appointment  of Ron Johnson as
President  and CEO on February 9, 2007,  and as  described  below,  and in other
previous filings made by the Company,  Mr. Hensel will now serve in the capacity
of Senior Vice President.

Dan Barnett, Senior Vice President, Secretary, Treasurer, Director.

Mr.  Barnett  has 22 years  experience  with Exxon  Mobil with  responsibilities
ranging from engineering to General Manager.  Most recently,  he served as North
American Planning Advisor in 2000. He also was founder and owner of various real
estate  services and investment  companies and holds a Texas Real Estate Brokers
license.  In 2003, he founded Mortgage Solution Partners,  which was acquired by
Mortgage Assistance Corporation in 2004.



                                       18
<PAGE>

Michelle Taylor, Executive Vice President and Corporate Development.

Ms. Taylor is one of the three founders of Mortgage  Assistance  Corporation and
has  historically  played a key role in the  development of the business  model,
corporate  structure  and ongoing  operations  of the company.  Her prior duties
included developing the affiliate program and affiliate  educational  materials.
She previously directed all relationships with key capital investors, investment
bankers and joint venture partners.  Prior to co-founding MAC in 2003,  Michelle
was the owner of Taylor  Brokerage Co., and also a national  marketing and sales
development  company. In these roles she served as a consultant with diversified
industries including medical, foodservice, and manufacturing organizations.  She
provided market  research,  managed  national sales forces in fifty states,  and
developed key account sales for companies  such as 7-11,  Starbucks and Cinemark
Theaters.  Clients  included:  Morningstar  Industries,  makers of International
Delight,  Farberware,  Inc.,  Grindmaster Corp. and Dean Foods. In addition, she
directed global sales for Estill Medical,  makers of Thermal Angel.  Pursuant to
the terms of a  consulting  contract  executed by the Company and Ms.  Taylor on
January 1, 2007,  Ms.  Taylor's  role was  redefined  to a part-time  consulting
arrangement and she is no longer serving as an officer of the company.

Sandra Valiquette, Chief Financial Officer.

Ms.  Valiquette was formerly the Senior Financial  person in multiple  financial
institution industry companies. Her experience is in both the insurance industry
and the  savings & loan  industry.  She was  responsible  for all aspects of her
company's financial management,  including accounting, finance, risk management,
information technology and Human Resources.  Under Ms. Valiquette's guidance and
leadership  of several  start-up  companies,  the  companies  eventually  became
multi-million  dollar entities.  At Summit Global Partners of Dallas,  Texas she
guided the first 12  acquisitions  of 450 employees and the  integration  of the
infrastructure, which is vital in the company's marketplace. Ms. Valiquette is a
graduate of Texas Wesleyan  University in Fort Worth, Texas where she majored in
accounting and business. She is a licensed Texas CPA.

William G. Payne, Director.

Pursuant to the Series A preferred stock financing transacted as of November 30,
2006, Mr. Payne was appointed the Company's Board of Directors. Mr. Payne is the
former  managing  partner  of FAX,  LP a  private  investment  firm that led the
financing  transaction  with the Company and that has completed over $60 million
in investments.  From 2002 - 2005 Mr. Payne served as the co-founding partner of
Bluffview Capital, LP, a boutique investment bank focused on capital raising and
merger and acquisition  advisory services.  From 1993 - 2001 Mr. Payne served as
Director - Corporate  Finance with Credit Suisse First Boston - Donaldson Lufkin
& Jenrette,  a global  investment  banking firm. Mr. Payne earned the Masters of
Business  Administration  degree,  graduating  with  distinction,  from the J.L.
Kellogg  Graduate School of Management at  Northwestern  University in Evanston,
IL.

Rod Jones, Director.

Prior  to  founding  Cain  Capital  in  1997,  Mr.  Jones  was  a  partner  in a
Dallas-based family office where he primarily focused on alternative investments
and private equity  investing.  Before joining the family office,  Mr. Jones was
part of the private  client  group at the Dallas  office of  Donaldson  Lufkin &
Jenrette,  a global investment banking and financial  management  company. He is
currently  on the Board of  Directors  at  Parkland  Hospital  and Blue Wing,  a
freight  forwarding  company.  Mr.  Jones  earned a Bachelor of Arts degree from
Southern  Methodist  University and earned a Masters in Business  Administration
degree from the University of Texas.


Executive Officer Additions Subsequent to December 31, 2006

Recognizing  the unique market  forces  currently  shaping the mortgage  finance
industry, the Company determined that it was in all shareholders' best interests
to install additional senior level corporate leadership as a means to ensure the
growth,  profitability and stability of the Company. Two senior level hires have
now been added to the Company and are described below.

Ron Johnson, President, CEO, Director.

On February 9, 2007,  Ron Johnson was appointed to the roles of President,  CEO.
Mr. Johnson was also elected to serve as a member and Executive  Chairman of the
Board  of  Directors  of the  Company.  Mr.  Johnson  has  extensive  management
experience.  From June 2006 through  February  2007, he served as an independent
management  consultant.  From  November  2004 until June 2006,  Mr.  Johnson was
President  and CEO of Minyard Food Stores,  a Texas based grocery chain and from
September 2002 until August 2004, Mr. Johnson served as Chief Executive  Officer
of ICM, LLC, a floor care management  company servicing retail stores in over 30
states.  From March 2001 until  August 2002,  Mr.  Johnson was an advisor to the
Board of Directors of Sutton Place Gourmet.

Richard ("Rick") Coleman, Senior Vice President, Finance.

On March 1,  2007,  Richard  ("Rick")  Coleman  was  appointed  as  Senior  Vice
President,  Finance.  From June 2005 through  February  2007,  he was engaged in
various financial,  accounting and management  consulting projects.  From August



                                       19
<PAGE>
<TABLE>
<CAPTION>

2002  through  May  2005,  he was  President  and  Chief  Financial  Officer  of
Industrial Cleaning Management,  LLC, following fifteen years serving in various
management financial and accounting positions in the retail industry.

Compliance With Section 16(a) of The Exchange Act

Compliance  with Section  16(a) of the  Securities  Exchange Act of 1934 Section
16(a) of the  Securities  Exchange Act of 1934 requires the Company's  directors
and  executive  officers,  and  persons  who own more than 10% of the  Company's
Common  Stock,  to file with the  Securities  and  Exchange  Commission  initial
reports of beneficial  ownership and reports of changes in beneficial  ownership
of  Common  Stock of the  Company.  Officers,  directors  and  greater  than 10%
shareholders  are required by the Securities and Exchange  Commission to furnish
the Company with copies of all section 16(a) reports they file. The Company only
has notice of one Form 3 filing by Mr.  Johnson and has not been  provided  with
copies of any forms by any other  officers,  directors or 10%  shareholders  and
assumes that the forms were not filed.

CODE OF ETHICAL CONDUCT.

On May 13, 2004, the Board of Directors adopted a policy of ethical conduct that
applies to all employees and directors,  including the chief executive  officer,
chief financial  officer,  chief accounting  officer or controller,  and persons
performing similar functions.

The Company  believes the adoption of this Code of Ethical Conduct is consistent
with the requirements of the Sarbanes-Oxley Act of 2002.

The Code of Ethical Conduct is designed to deter wrongdoing and to promote:

|X|  Honest and ethical  conduct,  including  the ethical  handling of actual or
     apparent   conflicts  of  interest   between   personal  and   professional
     relationships;

|X|  Full, fair, accurate,  timely and understandable  disclosure in reports and
     documents that we file or submit to the Securities & Exchange  omission and
     in other public communications made by us;

|X|  Compliance with applicable governmental laws, rules and regulations,

|X|  The  prompt  internal   reporting  to  an  appropriate  person  or  persons
     identified in the code of violations of our Code of Ethical Conduct; and

|X|  Accountability for adherence to the Code.

Item 10 - Executive Compensation

The  following  table  discloses  the  total  compensation  for  each of the MAC
officers and directors during 2005 and 2006.  Additional  narrative  disclosures
follow, along with a summary of each individual's professional background.




Summary of Executive Compensation For The Last Two Fiscal Years


Qualified Deterred

------------------------------------------------------------------------------------------------------------------------------------
Name & Principal     Year             Total        Bonus   Stock     Option   Non-Equity  Change in Pension  All Other       Total
 Position                              Base         ($)    Awards   Awards  Incentive       Value and Non-   Compensation
                                     Salary                 ($)       ($)      Plan       Qualified Deterred
                                       ($)                                   Compensation     Compensation
                                                                                               Earnings

------------------------------------------------------------------------------------------------------------------------------------
<S>                 <C>              <C>           <C>      <C>      <C>      <C>             <C>            <C>           <C>



Dale Hensel           2005           56,000         -         -       --           -             -          -              $ 56,000
                                                                                                                           --------

Dan Barnett           2005           53,466         -         -       --           -             -          -              $ 53,466
                                                                                                                           --------

Michelle Taylor (i)   2005           58,121         -         -       --           -             -          -              $ 58,121
                                                                                                                           --------

Sandra Valiquette     2005           57,940         -         -       --           -             -          -              $ 57,940
                                                                                                                           --------

                                                                                                                           --------

Dale Hensel           2006           88,250         -         -    300,0      00   -             -          -              $388,250
                                                                                                                           --------

Dan Barnett           2006           88,250         -         -    300,0      00   -             -          -              $388,250
                                                                                                                           --------

Michelle Taylor       2006           87,284         -         -    750,0      00   -             -          -               $837,28
                                                                                                                            -------

Sandra Valiquette     2006           60,053         -         -    140,0      00   -             -          -               $200,05


</TABLE>


 Note:

(i) In addition to the employee  compensation  listed for Michelle Taylor during
2005,  Taylor  also  received  $22,220 in  consulting  fees in 2005 prior to her
full-time employment with the Company.


                                       20
<PAGE>
<TABLE>
<CAPTION>

Executive Compensation - Narrative Disclosures


(1)  On November 30,  2006,  the Company  executed  employment  agreements  with
     principal officers Dale Hensel and Dan Barnett. The terms and conditions of
     the agreements are identical in all material  respects.  The agreements are
     effective beginning at the date of execution, through the remainder of 2006
     and  then for a period  of three  years  commencing  on  January  1,  2007.
     Compensation  for each officer  includes:  total gross base salary for each
     officer of $135,000  annually;  a cash incentive  bonus program worth up to
     50% of the  annual  base pay  amount  and which is  entirely  dependent  on
     meeting the established  performance  targets of the Company and which must
     be  approved  by the Board of  Directors;  and a grant to each  officer  of
     statutory  options for 300,000  common  shares under the  Company's  Equity
     Incentive Plan.


Executive Compensation: Outstanding Equity Awards at Fiscal Year-End


                   -------------------------------------------------------------
                          Option Awards
                   -------------------------------------------------------------

                   Number of Securities
                  Underlying Unexercised                    Equity Incentive
                        Options                                Plan Awards
--------------------------------------------------------------------------------

       Name         Number (#)       Numberb(#)    Number of     Number of
                    Exercisable    Unexercisable   Securities    Securities
                                                   Underlying    Underlying
                                                   Earned, but   Unexercised
                                                   Unexercised   Unearned
                                                   Options (#)   Options(#)
--------------------------------------------------------------------------------



Dale Hensel                   -               -              -        300,000
Dan Barnett                   -               -              -        300,000
Michelle Taylor               -               -        750,000              -
Sandra Valiquette             -               -        140,000              -





 -------------------------------------------------------------------------------
                                Stock Awards
 -------------------------------------------------------------------------------


                                                                                   Equity Incentive Plan Awards:
<S>                                                                                <C>

---------------------------------------------------------------------------------------------------------------------
                                               Number of        Market Value of   Number of          Market or Payout
       Name                                    Shares or        Shares or Units   Unearned Shares    Value of
                      Option      Option       Units of Stock   of Stock That     or Units or Other  Unearned Shares,
                      Exercise   Expiration    That Have Not    Have Not Vested   Rights That Have   Units or Other
                      Price ($)    Date        Vested (#)            ($)          Not Vested (#)     Rights That Have
                                                                                                     Not Vested ($)
<CAPTION>

---------------------------------------------------------------------------------------------------------------------
<S>                  <C>       <C>             <C>              <C>               <C>                <C>


Dale Hensel          $ 1.11   11/30/2011              -              -                 -                  -
Dan Barnett          $ 1.11   11/30/2011              -              -                 -                  -
Michelle Taylor      $ 0.85   11/28/2011              -              -                 -                  -
Sandra Valiquette    $ 0.85   11/28/2011              -              -                 -                  -
</TABLE>


Outstanding Equity Awards - Narrative Disclosures

(1)  Incentive stock options issued to principal officers Hensel and Barnet were
     issued at 110% of fair  market  value on the date of the grant  pursuant to
     the terms of the Company's  Equity  Incentive Plan for holders of more that
     10% of the voting stock of the company.  One third of such incentive  stock
     options will become  exercisable  upon each successive  anniversary date of
     the employment  agreements,  provided that the Company employs the officers
     on each such anniversary  date. A commercially  available  software product
     utilizing a proven trinomial lattice valuation  methodology  determined the
     fair  value of these  options.  Based on this  analysis,  the  value of the
     options at grant was  determined to be  approximately  $0.45.  All non-cash
     compensation  expense for this issuance will occur in future years pursuant
     to vesting.

(2)  Non-qualified  stock  options were issued on November 28, 2006, to Michelle
     Taylor for 750,000  shares of common stock.  These options were issued with
     an exercise price of $0.85,  which was the closing  trading price per share
     on the  date of the  grant.  These  options  were  100%  fully  vested  and
     exercisable  at the date of the  grant,  and may be  exercised  at any time
     through  November 28,  2011.  A  commercially  available  software  product
     utilizing a proven trinomial lattice valuation  methodology  determined the
     fair  value of these  options.  Based on this  analysis,  the  value of the
     options at grant was  determined to be  approximately  $0.38.  Allowing for
     potential future forfeitures,  a non-cash compensation expense was recorded
     for 2006.

(3)  Statutory  stock  options  were  issued on  November  28,  2006,  to Sandra
     Valliquette  for 140,000 shares of common stock.  These options were issued
     with an exercise  price of $0.85,  which was the closing  trading price per
     share on the date of the grant.  These  options  were 100% fully vested and
     exercisable  at the date of the  grant,  and may be  exercised  at any time
     through  November 28,  2011.  A  commercially  available  software  product
     utilizing a proven trinomial lattice valuation  methodology  determined the
     fair  value of these  options.  Based on this  analysis,  the  value of the
     options at grant was  determined to be  approximately  $0.37.  Allowing for
     potential future forfeitures,  a non-cash compensation expense was recorded
     for 2006.

Total ($)

                                       21
<PAGE>
<TABLE>
<CAPTION>



Summary of Director Compensation For The Last Fiscal Year

------------------------------------------------------------------------------------------------------------------------------------
   Name                          Fees Earned  Stock    Option   Non-Equity       Change in Pension   All Other       Total ($)
                                 Or Paid in   Awards   Awards  Incentive Plan    Value and Non-      Compensation
                                 Cash ($)      ($)      ($)    Compensation ($)  Qualified Deterred
                                                                                 Compensation
                                                                                 Earnings ($)
------------------------------------------------------------------------------------------------------------------------------------
<S>                            <C>           <C>       <C>      <C>              <C>                 <C>             <C>

Dale Hensel                           -        -           -           -               -                  -              $ -
Dan Barnett                           -        -           -           -               -                  -              $ -
William G. Payne                      -        -      46,506           -               -                  -         $ 46,506
Rod Jones                             -        -      46,506           -               -                  -         $ 46,506


</TABLE>


Director Compensation - Narrative Disclosures

(1)  On November 30, 2006, the Company issued 150,000  warrants (75,000 each) to
     William G. Payne and Rod Cain Jones in conjunction  with their  appointment
     to the Company's Board of Directors.  These warrants have an exercise price
     of $.39 per  share,  which  price  may be  adjusted  with the  terms of the
     warrants.  The Company ascribed a value of $0.62 per warrant share to these
     warrants using previously noted trinomial  lattice  valuation model.  These
     warrants  expire  November 30, 2016.  No other  Directors  received  equity
     compensation.


Employment Agreements

During 2006 the Company executed  employment  agreements with principal officers
Dale Hensel and Dan Barnett.  Terms and conditions of these agreements have been
disclosed in this Form 10-KSB,  in the Notes to the Financial  Statements and in
the  Company's  Form 8-K filed on  December  6, 2006.  The  Company  executed an
employment  agreement  with  Ron  Johnson  on  February  9,  2007,  and note the
agreement here as a subsequent  event.  Terms and conditions of these agreements
have been disclosed in the Company's Form 8-K filed on February 15, 2007.

Limitation of Liability and Indemnification Matters

The  Company's  By-Laws  provide  for the  indemnification,  to the full  extent
allowed by Florida law, of its directors, Officers, employees and agents who are
or were a party, or are threatened to be made a party to any threatened, pending
or completed  legal action,  suit or proceeding by reason of the fact that he or
she is or was serving a director,  Officer,  employee or agent of the Company or
is or was serving in such capacity at another  entity at the Company's  request.
The extent,  amount and eligibility for such indemnification are determined by a
majority vote of a quorum of disinterested directors, or by a majority vote of a
quorum of disinterested shareholders.

Section  607.0850 of the Florida  Business  Corporation  Act  empowers a Florida
corporation to indemnify any person who is a party to any proceeding (other than
an  action by or in the  right of such  corporation)  by reason of the fact that
such  person  is  or  was  a  director,  Officer,  employee  or  agent  of  such
corporation,  or is or was  serving  at the  request  of such  corporation  as a
director,  officer,  employee  or agent of another  corporation  or  enterprise,
provided that he acted in good faith and in a manner he  reasonably  believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal  action or  proceeding,  had no reasonable  cause to believe his
conduct was unlawful.  A Florida  corporation  may indemnify any person who is a
party to any  proceeding  by or in the right of the  corporation  under the same
conditions,  except  that  no  indemnification  is  permitted  without  judicial
approval if the officer or director is adjudged to be liable in the  proceeding.
Where an officer, director,  employee or agent of a corporation is successful on
the merits or  otherwise  in the defense of any action  referred  to above,  the
corporation  must  indemnify  him against the  expenses  that are  actually  and
reasonably incurred in connection therewith.

Insofar as indemnification  for liabilities arising under the Securities Act may
be  permitted to  directors,  officers  and  controlling  persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the  Commission  such  indemnification  is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.

The  Company is not aware of any  claims,  whether  possible  or  asserted,  for
indemnification.

Item 11 - Security Ownership of Certain Beneficial Owners and Management

The  following  table shows as of December 31, 2006,  the shares of Common Stock
beneficially owned by all of the persons who served as the directors or officers
of the Company during 2006 as well as the principal  shareholders  (greater than
5%) of the Company  individually  and, as to the directors  and  officers,  as a
group.



                                       22
<PAGE>

The number of shares  beneficially  owned by each person or entity is determined
under rules of the Securities and Exchange  Commission,  and the  information is
not necessarily  indicative of beneficial ownership for any other purpose. Under
such rules,  beneficial ownership includes any shares as to which the person has
the sole or shared  voting power or  investment  power and also any shares which
the  person  has the right to  acquire  as of a date  within  60 days  after the
relevant date through the exercise of any stock option or other right.

The Company's  ownership includes 12,725,124 shares issued and outstanding as of
December 31, 2006.  Collectively,  the  Directors and Officers with a beneficial
ownership greater than 5%, control 86.7% of the Company.  The share ownership in
the table and footnotes below has been  reclassified  after giving effect to the
reverse split.

         Table 1: Beneficial Ownership Greater Than 5%

                                                             Percent of Class
    Name and Address (1)          Number of Shares          Beneficially Owned
    ----------------             ----------------          ------------------

    Dale J. Hensel(2)               5,031,058                     45.59%

    Dan Barnett                     4,967,058                     45.01%

    Michelle Taylor                 1,036,375                      9.39%

    All Directors and
    Officers as a Group            11,034,491                    100.00%


          (1)  Unless otherwise indicated,  the business address for each person
               listed is: 2614 Main Street, Dallas, Texas 75226.

          (2)  Dale Hensel's stock holdings include shares beneficially owned by
               Hensel under a family limited  partnership  entity,  Leberknight,
               FLP which holds 3,840,000 common shares (34.79%).

Changes In Control.

None

Item 12 - Certain Relationships and Related Transactions

During  the years  ended  December  31,  2006 and 2005,  MAC  engaged in certain
transactions  with  one  of its  principal  officers  and  with  two  affiliated
entities,  Abovo  Corporation  and  Vision  Ads,  Inc.  ("VA"),  (dba "Red Horse
Realty"),  owned by a MAC vice  president.  MAC had  charged  VA, a real  estate
management firm, for usage of office space,  personnel and other  administrative
costs through 2005, and had recorded an account receivable of $50,945 from VA at
December 31, 2005. At December 31, 2006,  management  determined that the amount
owed by VA,  amounting  to $58,481,  would be forgiven in lieu of the  officer's
uncompensated   service  to  the  Company   prior  to  2005  and  certain  other
considerations.   Abovo  Corporation   engages  in  the  purchase  and  sale  of
residential  real  estate,  and  often  carries  the notes  receivable  with its
purchasers.  In 2004, MAC began servicing Abovo Corporation's real estate loans.
MAC recognized  $8,406 and $9,148 of servicing fees from Abovo  Corporation  for
the years ended December 31, 2006 and 2005, respectively.

One of the Company's  principal  officers and stockholders made cash advances of
$60,574 to the  Company  under two  unsecured  loans,  bearing  interest at 18%,
during 2005, and additional loans of $15,512 in 2006 at an interest rate of 12%.
All outstanding  advances were repaid on November 30, 2006.  Interest expense on
these loans amounted to $18,021 and $2,675 for the years ended December 31, 2006
and 2005, respectively.

The Company's two newly appointed directors have indirect ownership interests in
50% of Dutch Fork Capital,  L.L.C., a 50%-owned  subsidiary of the Company.  The
Company is the  manager  of Dutch  Fork,  and as such is deemed to  control  the
entity



                                       23
<PAGE>




Item 13 - Exhibits

         Exhibits


         3(i)*      Certificate of Incorporation of the Company

         3(i).1+    Articles of Amendment filed November 16, 2004

         3(i).2**   Amendment to Articles of Incorporation increasing the number
                    of authorized  shares of the  Company's  common stock to one
                    hundred seventy-five million (175,000,000) shares at $0.0001
                    par value.

         3(i).3***  Amendment  to  Articles  of  Incorporation  authorizing  the
                    issuance of up to three million (3,000,000) preferred shares
                    at a $1.00 par value;  and  authorizing  the creation of the
                    Company's Equity Incentive Plan

         3(i).4++  Articles of Amendment filed January 17, 2005

         3(ii)*    By-Laws of the Company

         4*         Copy of specimen  certificate  representing shares of Common
                    Stock, $.0001 par value per share, of the Company

         10.1       Canyon Ferry Capital,  LLC - Company Agreement and Servicing
                    Agreement


         10.2       Dutch Fork  Capital,  LLC - Company  Agreement and Servicing
                    Agreement

         10.3****   Ron Johnson - Employment Contract

         20.1       Code of Ethical Conduct


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

         31.2       Chief Financial Officer - Section 302 Certification pursuant
                    to the Sarbanes-Oxley Act of 2002

         32.1       Chief Executive Officer - Section 906 Certification pursuant
                    to the Sarbanes-Oxley Act of 2002

         32.1       Chief Financial Officer - Section 906 Certification pursuant
                    to the Sarbanes-Oxley Act of 2002

         Key to Referenced Exhibits:

         +          Incorporated  by reference from report filed on November 23,
                    2004

         ++         Incorporated by reference from report on January 17, 2005

         *          Incorporated  by reference  from the Company's  Registration
                    Statement on Form 10-KSB filed December 31, 1996

         **         Incorporated by reference from the Company's Form 10-QSB for
                    the quarterly period ended June 30, 2001

         ***        Incorporated  by reference to the  Company's  Form 8-K filed
                    December 6, 2006

         ****       Incorporated  by reference to the  Company's  Form 8-K filed
                    February 15, 2007


Item 14 - Principal Accountant Fees and Services

The Company paid or accrued the  following  fees in each of the prior two fiscal
years to its principal  accountant,  Sutton,  Robinson  Freeman & Co., of Tulsa,
Oklahoma.

                                                  Year End           Year End
                                                  12-31-05           12-31-06
                                                  --------           --------

             (1)  Audit Fees                      $ 67,056           $  58,831
             (2)  Audit-related Fees                                      -0-
             (3)  Tax Fees                        $  3,808           $   5,070
             (4)  All other fees                  $  1,440                -0-

                  Total Fees                      $ 72,304           $  63,901


The Company has no formal audit committee. However, as defined in Sarbanes-Oxley
Act of 2002,  the entire  Board of  Directors  is the  Company's  de facto audit
committee.

Sutton, Robinson Freeman & Co. was engaged for the full year 2006. The Company's
principal accountant,  Sutton, Freeman & Robinson & Co. did not engage any other
persons or firms  other than the  principal  accountant's  full-time,  permanent
employees.


                                       24
<PAGE>


SIGNATURES

Pursuant to the  requirements  of Section 13 or 15(d) of the  Securities  Act of
1933,  the  registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                   MORTGAGE ASSISTANCE CENTER CORPORATION




Date: April 17, 2007               By:      /s/ Ron Johnson
                                      ------------------------------------------
                                        Ron Johnson,
                                        President and Chief Executive Officer



Date: April 17, 2007               By:      /s/ Dale Hensel
                                      ------------------------------------------
                                        Dale Hensel,
                                        Chief Financial Officer
                                        (principal accounting officer)


In accordance  with the  Securities  Exchange Act of 1934,  this Report has been
signed below by the  following  persons on behalf of the  Registrant  and in the
capacities and on the dates indicated.


Signature:                   Title:                                Date:
----------                   ------                                -----


/s/ Ron Johnson              President, Chief Executive           April 17, 2007
-------------------------    Officer and Director
Ron Johnson                  Director


/s/ Dale Hensel              Chief Financial Officer and          April 17, 2007
-------------------------    Director
Dale Hensel


/s/ Dan Barnett              Senior Vice President, Secretary,    April 17, 2007
-------------------------    Secretary, Treasurer and Director
Dan Barnett


/s/ William G. Payne         Director                             April 17, 2007
-------------------------
William G. Payne


/s/ Rod Cain Jones           Director                             April 17, 2007
-------------------------
Rod Cain Jones















                                       25
<PAGE>



                     MORTGAGE ASSISTANCE CENTER CORPORATION






                        CONSOLIDATED FINANCIAL STATEMENTS



                                       AND



                        REPORT OF INDEPENDENT REGISTERED
                             PUBLIC ACCOUNTING FIRM



                           DECEMBER 31, 2006 AND 2005











                                             SUTTON ROBINSON FREEMAN & CO., P.C.



                                      F-1
<PAGE>




                     Mortgage Assistance Center Corporation






                                Table of Contents




                                                                            Page

Report of Independent Registered Public Accounting Firm......................F-2

Financial Statements
     Consolidated Balance Sheets
          as of  December 31, 2006 and 2005..................................F-4

     Consolidated Statements of Operations and Comprehensive Loss
          for the years ended December 31, 2006 and 2005.....................F-6

     Consolidated Statements of Changes in Stockholders' Equity (Deficit)
         for the years ended December 31, 2006 and 2005......................F-8
     Consolidated Statements of Cash Flows
         for the years  ended December 31, 2006 and 2005.....................F-9

     Notes to Consolidated Financial Statements.............................F-11
















<PAGE>
             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Board of Directors and Stockholders
Mortgage Assistance Center Corporation
Dallas, Texas


We have  audited  the  accompanying  consolidated  balance  sheets  of  Mortgage
Assistance  Center  Corporation (a Florida  corporation) as of December 31, 2006
and 2005,  and the related  statements of  operations  and  comprehensive  loss,
changes in stockholders'  deficit and cash flows for the years then ended. These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
financial  statements  are free of  material  misstatement.  The  Company is not
required  to have,  nor were we engaged  to  perform,  an audit of its  internal
control over financial reporting.  Our audit included  consideration of internal
control over financial  reporting as a basis for designing audit procedures that
are  appropriate  in the  circumstances,  but not the purpose of  expressing  an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,   the  consolidated   financial  position  of  Mortgage
Assistance  Center  Corporation  as of  December  31,  2006  and  2005,  and the
consolidated  results of its operations,  changes in  stockholders'  deficit and
cash flows for the years then ended in conformity  with United States  generally
accepted accounting principles.


<PAGE>


                                       F-2

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will  continue as a going  concern.  The Company has  sustained
recurring losses from operations and had an accumulated stockholders' deficit at
December  31,  2006.  These  circumstances  create  substantial  doubt about the
Company's  ability to continue as a going  concern and are  discussed in Note 4.
Management's  plans in regard to these matters are also described in Note 4. The
financial  statements do not contain any adjustments  that might result from the
outcome of these uncertainties.


/s/Sutton Tobinson Freeman & Co., P.C.
Sutton Robinson Freeman & Co., P.C.
Certified Public Accountants

Tulsa, Oklahoma
March 30, 2007



                                      F-3
<PAGE>



                     Mortgage Assistance Center Corporation

                           Consolidated Balance Sheets
                           December 31, 2006 and 2005


                                 ASSETS                    2006       2005
                                                                    Restated)
                                                  --------------  --------------


     Current Assets:
Cash and cash equivalents                              $1,205,120   $  598,978
Portfolio assets, at cost (net of impairment reserve
   of $253,508 and $202,690 at December 31, 2006 and
   2005, respectively)                                  6,798,509    1,708,053
Accounts receivable-related parties                          --         58,995
Prepaid expenses                                          194,405       33,544
                                                       ----------   ----------

Total Current Assets                                    8,198,034    2,399,570

                                                       ----------   ----------
Property and Equipment, at cost:
Land                                                      699,600      699,600
Building and improvements                                 606,799      564,452
Office furniture and equipment                            118,670      103,579
                                                       ----------   ----------
                                                        1,425,069    1,367,631

Less accumulated depreciation                              73,468       30,286
                                                       ----------   ----------

Net Property and Equipment                              1,351,601    1,337,345

                                                       ----------   ----------
Investments and Other Assets:
Deposits                                                    3,450        3,000
                                                       ----------   ----------


Total Assets                                           $9,553,085   $3,739,915
                                                       ==========   ==========

The  accompanying  notes are an integral  part of these  consolidated  financial
statements




                                      F-4
<PAGE>



                     Mortgage Assistance Center Corporation
                           Consolidated Balance Sheets
                     Years Ended December 31, 2006 and 2005


LIABILITIES AND STOCKHOLDERS' EQUITY

                                                           2006           2005
                                                                      (Restated)
                                                       ------------   ----------
        Current Liabilities:
Notes payable-individuals and others                   $ 1,522,315   $ 1,794,288
Current portion of mortgages payable                        24,400        10,100
Accounts payable-trade                                      58,794       183,405
Accounts payable-other                                     182,507       289,784
Accrued fees and wages                                     182,532        13,675
Accrued stock-based  compensation                           95,947          --
Other accrued liabilities                                  169,068       215,551
                                                       -----------   -----------

Total Current Liabilities                                2,235,563     2,506,803

                                                       -----------   -----------
Long-term Debt:
Notes payable-individuals and others                     1,492,768       639,105
Note payable-stockholder                                      --          60,574
Mortgages payable, less current portion                  1,036,360     1,061,504

                                                       -----------   -----------

Total Long-Term Debt                                     2,529,128     1,761,183
                                                       -----------   -----------

Minority Interests                                       5,466,543       691,453
                                                       -----------   -----------

Total Liabilities                                       10,231,234     4,959,439
                                                       -----------   -----------


Stockholders' Equity  (Deficit):
Series A convertible preferred stock ($0.001 par
 value, 3,000,000 shares authorized, 1,500,000
 shares issued and outstanding, aggregate
 liquidation preference of $1,500,000)                      1,500           --
Common stock ($0.001 par value, 50,000,000
 shares authorized, 12,725,124 shares issued
 and outstanding)                                          12,726         12,726
Additional paid-in capital                              2,481,413        173,663
Retained earnings (deficit) after December 31, 2004    (3,518,248)   (1,508,073)
                                                      -----------    -----------
                                                       (1,022,609)   (1,321,684)
Subscriptions issuable                                    344,460        102,160
                                                      -----------    -----------
Total Stockholders' Equity (deficit)                     (678,149)   (1,219,524)
                                                      -----------    -----------

Total Liabilities and Stockholders' Equity            $ 9,553,085    $ 3,739,915
                                                      ===========    ===========

The  accompanying  notes are an integral  part of these  consolidated  financial
statements


                                      F-5
<PAGE>

                     Mortgage Assistance Center Corporation
          Consolidated Statements of Operations and Comprehensive Loss
                     Years Ended December 31, 2006 and 2005


                                                         2006           2005
                                                                   (Restated)
                                                  -----------    -----------
    Operating Revenues:
  Sales of portfolio assets                      $ 2,054,114    $ 2,498,494
  Servicing fees and comissions from
      affiliates and others                          210,635         12,868
  Rental Income                                      134,550           --
  Other                                              384,805         15,601
                                                 -----------    -----------

      Gross operating revenues                     2,784,104      2,526,963
  Cost of portfolio assets sold                    1,501,845      1,486,169
                                                 -----------    -----------

      Net operating revenues                       1,282,259      1,040,794
                                                 -----------    -----------


Operating Expenses:
  Salaries, wages and contract labor               1,313,373        752,322
  Selling, general and administrative expenses     1,576,767        725,085
  Depreciation and amortization                       43,181         19,153
  Bad debts                                          182,443        206,245
                                                 -----------    -----------

      Total operating expenses                     3,115,764      1,702,805
                                                 -----------    -----------


Operating loss                                    (1,833,505)      (662,011)
                                                 -----------    -----------


Other income (expense):
  Interest and other income                          131,739          1,497
  Interest expense                                  (398,642)      (192,144)
  Merger expense                                        --         (303,058)
  Other nonrecurring expenses                           --          (30,701)
                                                 -----------    -----------


      Total other income (expense)                  (266,903)      (524,406)
                                                 -----------    -----------


Loss before minority interests and
      income taxes                                (2,100,408)    (1,186,417)





The  accompanying  notes are an integral  part of these  consolidated  financial
statements


                                      F-6
<PAGE>


                     Mortgage Assistance Center Corporation
          Consolidated Statements of Operations and Comprehensive Loss
                     Years Ended December 31, 2006 and 2005

                                             2006           2005
                                                         (Restated)
                                       ------------    ------------

Loss before minority interests and
      and income taxes                 $ (2,100,408)   $ (1,186,417)

Minority interests                           90,233        (321,656)
                                       ------------    ------------
Loss before income taxes                 (2,010,175)     (1,508,073)

Income tax benefit (expense)                   --              --
                                       ------------    ------------
Net Loss                                 (2,010,175)     (1,508,073)

Other comprehensive income                     --              --
                                       ------------    ------------
Comprehensive Loss                     $ (2,010,175)   $ (1,508,073)
                                       ============    ============


Net loss per weighted-average
share of common stock outstanding,
calculated on Net Loss:
                       Basic           $      (0.16)   $      (0.12)
                                       ============    ============
                       Fully diluted                   $      (0.12)
                                                       ============
Weighted-average number of shares
of common stock outstanding:

                       Basic             12,725,124      12,678,323
                                       ============    ============
                       Fully diluted                     12,678,323
                                                       ============




The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                      F-7
<PAGE>
<TABLE>
<CAPTION>

                     Mortgage Assistance Center Corporation
             Statement of Changes in Stockholders' Equity (Deficit)
                     Years Ended December 31, 2006 and 2005

                                                         Series A                                  Additional
                                                        Preferred          Common Stock             paid-in       Accumulated
                                                                           ------------
                                                          Stock        Shares        Par Value      capital         deficit
                                                     ------------   ------------   ------------   ------------    ------------
<S>                                                  <C>            <C>            <C>            <C>             <C>

Balances at
     December 31, 2004                              $       --       12,625,124   $     12,626   $ 23,971,949    $(23,798,786)

Issuance of common stock
     for legal services                                     --          100,000            100            500            --

Stock issuable to fund partnership investment               --             --             --             --              --

Quasi-reorganization, effective December 31, 2004           --             --             --      (23,798,786)     23,798,786

Net loss for the year                                       --             --             --             --        (1,508,073)
                                                    ------------   ------------   ------------   ------------    ------------


Balances at
     December 31, 2005                                      --       12,725,124         12,726        173,663      (1,508,073)

Stock issuable to fund retirements of
     of notes payable                                       --             --             --             --              --

Issuance of preferred stock, net of related
     issuance costs of $86,985                             1,500           --             --        1,411,515            --

Stock-based compensation expense                            --             --             --          896,235            --

Net loss for the year                                       --             --             --             --        (2,010,175)
                                                    ------------   ------------   ------------   ------------    ------------


Balances at
     December 31, 2006                              $      1,500     12,725,124   $     12,726   $  2,481,413    $ (3,518,248)
                                                    ============   ============   ============   ============    ============

</TABLE>

                                                     Subscriptions

                                                       issuable         Total
                                                     ------------   ------------


Balances at
     December 31, 2004                              $      2,160   $    187,949

Issuance of common stock
     for legal services                                     --              600

Stock issuable to fund partnership investment            100,000        100,000

Quasi-reorganization, effective December 31, 2004           --             --

Net loss for the year                                       --       (1,508,073)
                                                    ------------   -------------


Balances at
     December 31, 2005                                   102,160     (1,219,524)

Stock issuable to fund retirements of
     of notes payable                                    242,300        242,300

Issuance of preferred stock, net of related
     issuance costs of $86,985                              --        1,413,015

Stock-based compensation expense                            --          896,235

Net loss for the year                                       --       (2,010,175)
                                                    ------------   -------------


Balances at
     December 31, 2006                              $    344,460   $   (678,149)
                                                    ============   =============

The  accompanying  notes are an integral  part of these  consolidated  financial
statements





                                      F-8
<PAGE>
<TABLE>
<CAPTION>



                     Mortgage Assistance Center Corporation
                      Consolidated Statements of Cash Flow
                           December 31, 2006 and 2005


                                                                                2006           2005
                                                                                              (Restated
                                                                             -----------    -----------
<S>                                                                          <C>            <C>

  Cash Flows From Operating Activities
Net loss                                                                     $(2,010,175)   $(1,508,073)
                                                                             -----------    -----------

Adjustments to reconcile net loss to net cash provided (used) by operating
activities:
Depreciation                                                                      43,181         19,153
Non-cash stock-based compensation                                                992,182           --
Professional fees paid with common stock                                            --              600
Merger expense                                                                      --          295,000
Minority interests in subsidiaries' net earnings (losses)                        (90,233)       321,656
Change in assets and liabilities:
(Increase) decrease in portfolio assets                                       (5,090,456)      (569,377)
(Increase) decrease in accounts receivable from related parties                   58,995        (55,010)
(Increase) decrease in prepaid expenses and other assets                        (161,310)         2,572
Increase (decrease) in accounts payable-trade                                   (118,611)      (194,217)
Increase (decrease) in accounts payable-other                                   (107,277)       200,000
Increase (decrease) in accrued fees and wages                                    168,857         13,675
Increase (decrease) in other accrued liabilities                                  54,504        203,726
                                                                             -----------    -----------


Total adjustments                                                             (4,250,168)       237,778
                                                                             -----------    -----------


               Net Cash Used by Operating Activities                          (6,260,343)    (1,270,295)
                                                                             -----------    -----------


Cash Flows From Investing Activities

Purchase of property and equipment                                               (57,438)      (309,279)
                                                                             -----------    -----------


                  Net Cash Used by Investing Activities                          (57,438)      (309,279)
                                                                             -----------    -----------

</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements

                                      F-9
<PAGE>
<TABLE>
<CAPTION>

                     Mortgage Assistance Center Corporation
                      Consolidated Statements of Cash Flow
                           December 31, 2006 and 2005


                                                                    2006          2005
                                                                               (Restated)
                                                               -----------    -----------
<S>                                                            <C>            <C>

   Cash Flows From Financing Activities
Net proceeds from issuance of preferred stock                  $ 1,413,015    $      --
Proceeds from issuance of common stock subscriptions                  --          100,000
Proceeds from issuance of debt to individuals and others         1,793,000      1,460,019
Repayments of debt to individuals and others                    (1,075,997)      (363,096)
Capital contributions from minority interests                    5,101,546        400,000
Distributions to minority interests                               (236,223)       (70,000)
Proceeds from mortgage loans                                          --             --
Repayments of mortgage loans                                       (10,844)          --
Net advances from (repayments to) stockholder                      (60,574)        60,574
                                                               -----------    -----------

Net Cash Provided by Financing Activities                        6,923,923      1,587,497
                                                               -----------    -----------

Net Increase (Decrease) in Cash                                    606,142          7,923

Cash at Beginning of Year                                          598,978        591,055
                                                               -----------    -----------

Cash at End of Year                                            $ 1,205,120    $   598,978
                                                               ===========    ===========

Supplemental Disclosures of Cash Flow Information

Cash Paid During the Year for:
Interest                                                       $   334,038    $   127,435
Income taxes                                                   $      --      $      --

Noncash investing and financing activities:
Real estate acquired via issuance of long-term mortgage debt   $      --      $ 1,000,000

</TABLE>



The  accompanying  notes are an integral  part of these  consolidated  financial
statements


                                      F-10
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005




Note 1 - Organization

     Mortgage   Assistance  Center   Corporation   (formerly  Safe  Alternatives
     Corporation  of America,  Inc.) (the  "Company" or "MACC") was organized in
     1976,  under the name Knight  Airlines,  Inc. In October 1978,  the Company
     completed  an  initial  public  offering  of its common  stock in  Florida,
     pursuant to an exemption from  registration  under Regulation A promulgated
     under the Securities Act of 1933, as amended. The Company ceased operations
     in April 1983 and was inactive  through  September  1995. In May 1994,  the
     name of the Company was changed to Portsmouth Corporation.

     On September 15, 1995,  pursuant to an Asset Purchase Agreement and Plan of
     Reorganization  between the Company and Safe  Alternatives  Corporation  of
     America,  Inc.,  a  Delaware  corporation  ("SAC-Delaware"),   the  Company
     purchased  all  of the  assets  of  SAC-Delaware,  and  assumed  all of the
     liabilities of SAC-Delaware. On March 4, 1996, the Company changed its name
     to Safe Alternatives Corporation of America, Inc. (a Florida corporation).

     On September 17, 2002, the Board of Directors of the Company agreed to sell
     all of the Company's assets to Environmental Alternatives,  Inc. ("EAI"), a
     privately held Vermont corporation, in exchange for EAI's assumption of and
     agreement to indemnify  and hold the Company  harmless  from paying any and
     all claims that could attach to the Company as of June 30, 2002.

     From  July 1,  2002 to May 2005 the  Company  had no  assets  or  operating
     activities.

     Pursuant to a Majority  Shareholder Consent, on May 14, 2004, the Company's
     Board of  Directors  authorized  a change in the  Company  name to Mortgage
     Assistance Center Corporation. The Company's Articles of Incorporation were
     amended on December 22, 2004 and became  effective  January 17,  2005.  The
     changes were made in connection with the requirements of a Letter of Intent
     executed between the Company and Mortgage Assistance Corporation ("MAC"), a
     Texas  corporation,  in which  re-organizational  steps were  undertaken to
     create a change in control of MACC  prior to the  completion  of a business
     combination agreement.

     Upon completion of a definitive  Business  Combination  Agreement in August
     2005,  MACC  acquired all of the issued and  outstanding  capital  stock of
     Mortgage  Assistance  Corporation.  MAC became a wholly owned subsidiary of
     MACC as described in Note 3.



                                      F-11
<PAGE>
                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005



Note 2- Summary of Significant Accounting Policies

         Description of Business:

     Through  MAC,  the  Company  operates  as  a  financial  services  company,
     acquiring and managing pools of distressed real estate-based mortgages. The
     types of  mortgage  pools  acquired  include  non-performing,  charged-off,
     sub-prime  mortgages,  typically between ninety days and two years past due
     and secured by residential real estate.  The Company acquires both priority
     ("first")   and   subordinate   ("second")   mortgage   loans  or  "liens".
     Approximately  1% of the loans acquired are subordinate  liens,  which bear
     the risk of being  reclassified  as an unsecured loan should the first lien
     holder  foreclose  on  the  property.   The  Company   primarily   acquires
     non-performing  first  lien loan pools of  varying  amounts  from banks and
     other lenders at a significant  discount from the loans'  outstanding legal
     principal amount, the total of the aggregate of expected future sales price
     and the total payments to be received from obligors.

     After the Company acquires the loans, the process of resolution begins with
     the borrower,  changing the status of the non-performing  loans into either
     performing loans or foreclosing on the real estate. The Company will resell
     a substantial  portion of its  re-performing  loans in  various-sized  loan
     pools. The Company will be required to foreclose on certain properties when
     loans held in its  portfolio  continue to be in default.  As a result,  the
     Company will be engaged in owning  single-  family  dwellings  and possibly
     other real estate. Such foreclosed real estate will be held,  rehabilitated
     where necessary, and sold.

     Principles of Consolidation and Basis of Presentation:

     The  accompanying  financial  statements are  consolidated  and include the
     financial statements of MACC, MAC, and M.A. Protect, Inc., its wholly owned
     subsidiaries,  and six  unincorporated  entities,  MAP/MAC,  L.L.C.,  Apple
     Canyon Capital,  L.L.C.,  Bluestone Capital,  L.L.C., Canyon Ferry Capital,
     L.L.C.,  Dutch  Fork  Capital,  L.L.C.  and  999  Metromedia  Venture.  All
     significant  intercompany  accounts  and  transactions  are  eliminated  in
     consolidation.

     The Company,  through its subsidiary,  MAC, has a 50% ownership interest in
     each of the six  unincorporated  joint  ventures  and  acts as the  general
     partner of each  venture  and  exercises  control  over each  venture.  The
     limited  partners  in each  of the  ventures  do not  have  either  (a) the
     substantive ability to dissolve the venture or otherwise remove the general
     partner without cause, or (b) substantive  participating  rights.  Based on
     these  factors,  MAC's  general  partner's  interest  in each of the  joint
     ventures meets the criteria for consolidation under the provisions



                                      F-12
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005



Note 2- Summary of Significant Accounting Policies (continued)

         Principles of Consolidation and Basis of Presentation: (continued)

     of Emerging Issues Task Force Issue No. 04-5, Determining Whether A General
     Partner, or the General Partners as a Group, Controls a Limited Partnership
     or Similar  Entity When the Limited  Partners  Have Certain  Rights  ("EITF
     Issue No.  04-5") and AICPA  Statement  of Position  78-9,  Accounting  for
     Investments in Real Estate ("SOP 78-9").

     The  consolidated  financial  statements  include  100% of the  assets  and
     liabilities  of  the  six  unincorporated   entities,  with  the  ownership
     interests  of  minority  investors  recorded  as  a  noncurrent  liability,
     "minority interests."

     Accounting Change:

     Effective January 1, 2006, the Company adopted the provisions of EITF Issue
     No. 04-5 and SOP 78-9 and began consolidating the accounts MAP/MAC,  L.L.C.
     and its other  50%-owned  joint  ventures.  Historically  the  Company  had
     accounted for its investments in such ventures under the equity method. The
     change was made to more  clearly  reflect  the  Company's  operations  as a
     financial services company, utilizing funding from third party investors to
     finance  the  purchase of mortgage  note  receivable  pools and real estate
     portfolios, either directly or through unincorporated ventures. As a result
     of the accounting change, all prior periods presented have been restated to
     reflect the  consolidation of the Company's  50%-owned joint ventures.  The
     accounting  change  did  not  have a  material  impact  on the  results  of
     operations of the Company.

     Portfolio Assets:

     Portfolio  assets  are  held for sale  and  reflected  in the  accompanying
     financial  statements  as  mortgage  note  receivable  pools or real estate
     portfolios.  The following is a description of each  classification and the
     related accounting policy accorded to each portfolio type:

     Mortgage Note Receivable Pools:

     Mortgage note receivable  pools consist  primarily of first lien distressed
     real estate based mortgages. The cost basis of loan pools acquired consists
     of  their  purchase  price  from  banks  or  other  sellers  plus  purchase
     commissions,  if any.  Loan pool costs are  allocated to  individual  loans
     based on the face  value of the  unpaid  principal  of the  loans and their
     performance status based on the note's expected


                                      F-13
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005



Note 2- Summary of Significant Accounting Policies (continued)

     Mortgage Note Receivable Pools: (continued)

     cash  flow.  Any  payments  of due  diligence  costs,  property  taxes,  or
     insurance  required are  capitalized  and included in the cost basis of the
     individual loans involved.

     Subsequent  to  acquisition,   the  adjusted  cost  of  the  mortgage  note
     receivable  pools is evaluated  for  impairment on a quarterly  basis.  The
     evaluation of  impairment  is  determined  based on the review of estimated
     future cash receipts, which represents the net realizable value of the note
     pool. Once it is determined that there is impairment, a valuation allowance
     is established for any impairment  identified through provisions charged to
     operations  in the period of the  impairment  is  identified.  The  Company
     determined  that an  impairment  allowance  of $253,508  and  $202,690  was
     required at December 31, 2006 and December 31, 2005, respectively.

     The Company  recognizes gain or loss upon the resale or other resolution of
     mortgage loans pools based upon the difference between the selling price of
     the loan pool and the cost basis of the  individual  loans  included in the
     pool being sold.  Collections of delinquent principal and interest payments
     are credited against the cost basis of the respective loan.

     The Company has adopted  Statement  of Position No.  03-3,  Accounting  for
     Certain Loans or Debt Securities  Acquired in a Transfer ("SOP 03-3").  SOP
     03-3 addresses  accounting for differences  between  contractual cash flows
     and  cash  flows  expected  to be  collected  from  an  investor's  initial
     investment  in loans or debt  securities  acquired  in a transfer  if those
     differences are attributable, at least in part, to credit quality. SOP 03-3
     was effective for all loans acquired after 2004; however,  all of the loans
     in the Company's  portfolio were accounted for in accordance with SOP 03-3,
     regardless of date acquired.

     Real Estate Portfolios:

     Real estate  portfolios  consist of real estate acquired by foreclosures of
     individual  mortgage notes  receivable.  Such portfolios are carried at the
     lower of cost or fair  value  less  estimated  costs  to sell.  The cost of
     foreclosed  real  estate  consists  of  original  loan costs plus any costs
     relating  to the  development  and  improvement  of the real estate for its
     intended use. The costs of foreclosure and any required refurbishment costs
     to bring the property to resalable  condition,  as well as any maintenance,
     taxes and insurance costs required during the holding period are


                                      F-14
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005



Note 2- Summary of Significant Accounting Policies (continued)


     Real Estate Portfolios: (continued)

     capitalized.  Income or loss is recognized upon the disposal of real estate
     at the date of closing,  based on the difference  between  selling  prices,
     less commissions, and capitalized costs. Rental income, net of expenses, on
     real  estate  portfolios  is  recognized  when  received.   Accounting  for
     portfolios  is on an individual  asset-by-asset  basis as opposed to a pool
     basis.

     Subsequent to acquisition,  the cost of real estate portfolios is evaluated
     for  impairment  on a quarterly  basis.  The  evaluation  of  impairment is
     determined based on the review of the estimated future cash receipts, which
     represents  the net  realizable  value  of the  real  estate  portfolio.  A
     valuation  allowance is established for any impairment  identified  through
     provisions   charged  to  operations  in  the  period  the   impairment  is
     identified. The Company determined that no allowance for impairment on real
     estate portfolios was required at December 31, 2006 and December 31, 2005.

     Cash and Cash Equivalents:

     The  Company  considers  all  highly  liquid  debt  or  equity  instruments
     purchased  with an original  maturity at the date of purchase of 90 days or
     less to be cash equivalents.

     Property and Equipment:

     Property  and  equipment  acquired are  recorded at cost.  Depreciation  of
     property  and   equipment   is   determined   by  the  straight   line  and
     double-declining  balance  methods  over  estimated  useful lives of thirty
     years for buildings and  improvements,  and ranging from two to seven years
     for office furniture and equipment.

     Upon sale,  retirement  or other  disposal of property and  equipment,  the
     related cost and  accumulated  depreciation  are removed from the accounts.
     All gains or losses arising from the sale,  retirement or other disposition
     of property or equipment are reflected in earnings.

     Maintenance,  repairs, renewals and betterments, in general, are charged to
     expense as incurred,  except that of major renewals and  betterments  which
     extend the life on an asset or increase the value thereof are capitalized.



                                      F-15
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005


Note 2- Summary of Significant Accounting Policies (continued)

     Share-Based Compensation:

     The Company  recognizes  expense for its share-based  compensation based on
     the fair value of the awards that are granted in accordance  with Statement
     of Financial Accounting Standards No. 123r,  Share-Based Payments. The fair
     value of common stock options or warrants is estimated at the date of grant
     by a third party consultant using a commercially available software product
     that employs a proven trinomial lattice valuation methodology. This product
     was developed for use in estimating  the fair value of common stock options
     and  warrants  that are fully  transferable,  and takes into  consideration
     several criteria, including volatility,  expected term, dividend yield, and
     risk-free  rate of  return.  It was the  Company's  determination  that the
     trinomial lattice valuation  methodology is the preferred and most accurate
     options valuation methodology  available.  Option valuation methods require
     the input of highly  subjective  assumptions,  including the expected stock
     price volatility. The measured compensation cost is recognized ratably over
     the vesting period of the related share-based compensation award.

     Income Taxes:

     The Company  accounts  for income  taxes based on  Statement  of  Financial
     Accounting Standards No. 109 ("SFAS No. 109"), Accounting for Income Taxes.
     SFAS  No.  109  requires  the   recognition  of  deferred  tax  assets  and
     liabilities  for the  future tax  consequences  attributable  to  temporary
     differences  between the financial  statement  carrying amounts of existing
     assets and  liabilities and their  respective tax bases. In addition,  SFAS
     No.  109  requires  the  recognition  of future tax  benefits,  such as net
     operating  loss carry  forwards,  to the extent  that  realization  of such
     benefits is more likely than not. The amount of deferred tax liabilities or
     assets is  calculated  by applying  the  provisions  on enacted tax laws to
     determine the amount of taxes payable or refundable  currently or in future
     years.

     Valuation  allowances are established,  when necessary,  to reduce deferred
     tax  assets  when it is more  likely  than not that all or a portion of the
     deferred tax asset will not be realized.

     Net Loss Per Common Share:

     The Company computes net income (loss) per share in accordance with SFAS No
     128,  Earnings per Share,  and SEC Staff  Accounting  Bulletin No. 98 ("SAB
     98").  Under the  provisions  of SFAS No. 128 and SAB 98,  basic net income
     (loss)  per  common  shares  is based on the  weighted-average  outstanding
     common shares.



                                      F-16
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005


Note 2- Summary of Significant Accounting Policies (continued)

     Diluted net income (loss) per common share is based on the weighted-average
     outstanding shares adjusted for the dilutive effect of warrants to purchase
     common stock and convertible debentures.  Due to the Company's losses, such
     potentially  dilutive  securities  are anti  dilutive  for the  year  ended
     December  31,  2006.  The  weighted  average  number of  potentially  fully
     dilutive shares was 19,333,934 for the year ended December 31, 2006.

Note 3 - Business Combination

     On May 14,  2004,  the  Company's  President,  at that time,  Dale  Hensel,
     executed a Letter of Intent with Mortgage Assistance Corporation ("MAC"), a
     Texas  corporation  controlled  by Mr.  Hensel,  whereby  MAC offered to be
     acquired by the Company.  Under the terms and  conditions  of the letter of
     intent the MACC board obtained a majority  shareholder consent in lieu of a
     special meeting according to the Florida Business  Corporation Statutes and
     approved the following actions:

          1.   The reverse split of the Company's common shares on a One for Two
               Hundred Fifty (1:250) basis;
          2.   The corporate name change from Safe  Alternatives  Corporation of
               America, Inc. to Mortgage Assistance Center Corporation;
          3.   The change in the  authorized  number of common stock shares from
               175,000,000 to 50,000,000 shares;
          4.   Authorized a business  combination  whereby the Company exchanged
               12,000,000 post reverse split common shares for all of the issued
               and outstanding common stock of MAC; and
          5.   Any such further  recommendations as may be considered reasonable
               and in the best interest of the shareholders.

     In May 2004, a majority shareholder action approved the reverse stock split
     and the reduction in the authorized number of common shares.

     On May 10, 2005, the Company entered into a Business Combination  Agreement
     to acquire  all of the issued and  outstanding  capital  stock of  Mortgage
     Assistance  Corporation,  a  Texas  corporation,  consisting  of  7,500,000
     shares, in exchange for twelve million  (12,000,000)  shares of MACC stock.
     The  Company  issued  1.6 MACC  shares  for each MAC  share  held by the 34
     shareholders  of  MAC in an  exempt  transaction  under  Section  4(2)  and
     Regulation  D Rule 506 of the  Securities  Act of  1933,  as  amended  (the
     "Securities  Act").  These shares are restricted  securities and may not be
     publicly  resold  absent  registration  with the  Securities  and  Exchange
     Commission  (SEC) or  exemption  from the  registration



                                      F-17
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005

     Note 3 - Business Combination (continued)

     requirements of the Securities Act. MAC became a wholly owned subsidiary of
     MACC upon MACC's complete acquisition of all the MAC shares.

     As of May 10, 2005,  MACC  received  6,896,556  MAC shares (92%) and caused
     11,034,491  of the  Company  shares to be issued to three  individuals  who
     comprise  a control  group  consisting  of Dale  Hensel,  Dan  Barnett  and
     Michelle Taylor.  Together they control 86.7% of the voting common stock of
     the Company.  Dale Hensel was the sole officer and director of the Company.
     Mr. Hensel was also the President and director of MAC. Mr.  Barnett was the
     Vice President and director of MAC. As of the date of the transaction,  Ms.
     Taylor was a contract  consultant of MAC.  Subsequently,  the remainders of
     the MAC shares were surrendered and 12,000,000  shares were issued for 100%
     of MAC.

     A conflict of interest existed in May 2004 when Mr. Hensel recommended that
     the Company acquire all of the issued and outstanding  capital stock of MAC
     because Mr.  Hensel was the Company  president  and  director  and also the
     president,  director and  shareholder of MAC. The decisions to acquire MAC,
     change the corporate  name,  implement the reverse split and capital change
     were actions over which Mr. Hensel had exercised  degrees of control and in
     which he had a financial  interest by virtue of being a shareholder of MAC.
     All of these transactions were disclosed to, authorized and approved by the
     written consent of the Company's  majority  shareholders  who held 75.9% of
     the voting stock.  At the time of voting,  Mr. Hensel was not a shareholder
     of the Company and did not vote for approval of these transactions.

     The number of shares  authorized  for issuance in the business  combination
     transaction  between MACC and the MAC shareholders  was negotiated  between
     Mr.  Hensel  and MAC  management  in a  transaction  with  management.  The
     management  of MACC and MAC shared a common  director  and  officer in Dale
     Hensel. The transaction did not represent an arms-length transaction.

     At the date of the merger,  MAC  expensed  $295,000 of legal fees and other
     costs  related  to  the  acquisition.   These  costs  had  previously  been
     capitalized  pending  successful  completion  of a  merger.  At that time a
     market value for MACC's common shares was difficult to ascertain because of
     the limited and illiquid market for the Company shares. There was no active
     market for MACC common stock at that time.

     The acquisition of MAC constituted an exchange of equity interests  between
     entities  under common  control and  resulted in a change in the  reporting
     entity.



                                      F-18
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005



Note 3 - Business Combination (continued)

     This type of transaction is not a business  combination  under Statement of
     Financial  Accounting  Standards  Number  141 and,  consequently,  has been
     accounted for in a manner similar to a pooling of interests  rather than as
     a  purchase.  Accordingly,  the equity  interests  that were  issued to MAC
     shareholders  in May 2005 in exchange  for the net assets of MAC were given
     effect  as of  January  1,  2005,  based on the net book  value of MAC on a
     historical  cost  basis.  The  results  of  operations  for the year  ended
     December 31, 2005  presents  the combined  results of MACC and MAC for that
     year.

Note 4 - Going Concern Uncertainty

     The accompanying financial statements have been prepared on a going concern
     basis,  which  contemplates the realization of assets and the settlement of
     liabilities and  commitments in the normal course of business.  As shown in
     the financial  statements,  the Company has incurred significant  operating
     losses in 2006 and prior years,  resulting in an accumulated  stockholders'
     deficit as of December 31, 2006. These factors,  among others, may indicate
     that the  Company  will be  unable to  continue  as a going  concern  for a
     reasonable  period of time.  The  financial  statements  do not include any
     adjustments  relating to the recoverability of assets and classification of
     liabilities  that  might be  necessary  should  the  Company  be  unable to
     continue as a going concern. The Company's  continuation as a going concern
     is dependent upon its ability to generate  sufficient cash flow to meet its
     obligations  on  a  timely  basis,  to  obtain   additional   financing  or
     refinancing as may be required, and ultimately to sustain profitability.

     The Company completed a $1,500,000 preferred stock financing transaction on
     November 30, 2006,  which required the Company to restructure  the majority
     on  its  existing   short-term  debt.  The  financing   agreement  contains
     provisions which could provide  additional  preferred stock financing up to
     $1,500,000 (See Note 13).

     The Company is actively  pursuing  alternative  financing plans to fund the
     Company's  requirements,  and those plans include,  but are not limited to,
     additional  equity  sales  or  debt  financing  under  appropriate   market
     conditions,  allegiances  or  partnership  agreements,  or  other  business
     transactions  which could  generate  adequate  funding  opportunities.  The
     Company continues to explore  opportunities to secure additional sources of
     debt  financing  as a means of more  cost  effectively  acquiring  pools of
     mortgage notes and foreclosed properties.



                                      F-19
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005


Note 4 - Going Concern Uncertainty (continued)

     While the Company is confident in its ability to secure additional  capital
     in the  future,  there  is no  guarantee  that  the  Company  will  receive
     sufficient  funding to sustain  operations or implement any future business
     plan steps.

Note 5 - Recent Accounting Pronouncements

     In May 2005, the Financial  Accounting  Standards Board issued Statement of
     Financial  Accounting  Standards  No.  154,  Accounting  Changes  and Error
     Corrections  (SFAS 154),  which  replaces  APB  Opinion No. 20,  Accounting
     Changes,  and FASB  Statement 3,  Reporting  Accounting  Changes in Interim
     Financial  Statements.  This  statement  changes the  requirements  for the
     accounting for and reporting of a change in accounting principle, including
     all voluntary changes in accounting principles.  It also applies to changes
     required by an accounting  pronouncement  in the unusual  instance that the
     pronouncement  does  not  include  specific  transition  provisions.   This
     statement requires voluntary changes in accounting principles be recognized
     retrospectively  to  prior  periods'  financial  statements,   rather  than
     recognition  in  the  net  income  of  the  current  period.  Retrospective
     application  requires  restatements of prior period financial statements as
     if that accounting  principle had always been used. This statement  carries
     forward, without change, the guidance contained in Opinion 20 for reporting
     the correction of an error in previously issued financial  statements and a
     change in accounting estimate.  The provisions of SFAS No. 154 is beginning
     January 1, 2006. It had no effect on the accompanying  financial statements
     .

     In March 2006, the Financial Accounting Standards Board issued Statement of
     Accounting  Standards No. 156, Accounting for Servicing of Financial Assets
     (SFAS 156),  which amends SFAS 140,  Accounting for Transfers and Servicing
     of Financial Assets and  Extinguishments of Liabilities.  SFAS 156 permits,
     but does not require, an entity to choose either the amortization method or
     the fair value  measurement  method for measuring  each class of separately
     recognized  servicing assets and servicing  liabilities.  The provisions of
     SFAS No. 156 are effective for fiscal years  beginning  after September 15,
     2006.  The  Company  does not  expect  the  adoption  of SFAS 156 to have a
     material effect on its financial statements and related disclosures.




                                      F-20
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005


Note 5 - Recent Accounting Pronouncements  (continued)

     In September 2006, the FASB issued SFAS No. 157, "Fair Value  Measurements"
     (SFAS  157).  SFAS 157  defines  fair value,  establishes  a framework  for
     measuring fair value, and expands disclosures about fair-value measurements
     required  under  other  accounting  pronouncements,  but  does  not  change
     existing  guidance  as to whether or not an  instrument  is carried at fair
     value.  SFAS 157 is  effective  for the  Company's  fiscal  year 2008.  The
     Company is currently evaluating the impact of adopting SFAS 157.

Note 6 - Portfolio Assets

     Portfolio  assets were  comprised of the following at December 31, 2006 and
     2005:


                                              2006         2005
                                              ----         ----


Mortgage note receivable pools            $2,125,852   $1,285,036
Real Estate portfolios                     4,729,647      314,192
Tax liens and other                          196,518      311,515
                                          ----------   ----------

     Total portfolio assets                7,052,017    1,910,743

Less valuation allowance for impairment      253,508      202,690
                                          ----------   ----------

     Net portfolio assets                 $6,798,509   $1,708,053
                                          ==========   ==========

     Certain portfolio assets are pledged to secure  non-recourse  notes payable
     to individuals and others (See Note 8).





                                      F-21
<PAGE>


                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005


Note 7 - Notes Payable

     At December 31, 2006 and 2005, notes payable to individuals and others were
     comprised of the following:


                                                             2006         2005
                                                            -------     -------
     Non-interest bearing loan payable to minority interest
partner in MAP/MAC, L.L.C., due upon demand              $1,480,136   $  514,136

Loans payable to One Source Mortgage Investments,
Inc., due interest only monthly or semiannually
 at 12%, maturing September-November 2008                   626,500         --

Loans payble to various individuals, due principal and
accrued interest at 12% at maturity in October-
November 2008                                               543,068      637,988

Loan payable to Kirtland Realty Group, L.P., due
interest only monthly at 14%, maturing November 2008        223,200      223,200

Loan payble to individual, due interest only
quarterly at 12%, maturing November 2008                    100,000       50,000

Loan payable to individual, due principal and
accrued interest at 3%, maturing January 2007                  --        200,000

Non-interest bearing loans payable to joint venture
partners, payable out of joint venture distributions         42,179      297,069

Loan payable to individual, due interest only
monthly, maturing March 2006                                   --        150,000

Loans payable to individuals, due interest only
quarterly at 10%, maturing January-August 2006                 --        136,000

Other                                                          --        225,000
                                                         ----------   ----------

   Total                                                  3,015,083    2,433,393

   Less portion due within one year                       1,522,315    1,794,288
                                                         ----------   ----------

                                                         $1,492,768   $  639,105
                                                         ==========   ==========


                                      F-22
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005


Note 7 - Notes Payable (continued)

     Certain real estate  mortgage note  receivable  pools secure the loans from
     individuals and others.

     In connection with the issuance of 1,500,000 shares of the Company's Series
     A Preferred  Stock (See Note 13), the Company  restructured  certain of its
     loans payable to individuals and others to long-term  obligations  maturing
     October-November  2008,  while  retiring  other loans with a portion of the
     proceeds from the preferred stock issuance.

     Principal  installments  due on notes payable to individuals and others are
     due $42,179 in 2007 and $1,492,768 in 2008, with the remaining  $1,480,136,
     consisting  of amounts  due to the  minority  interest  partner in MAP/MAC,
     L.L.C.,  payable  at an  undeterminable  future  date as  explained  in the
     following paragraphs.

     On September 30, 2004, Mortgage Assistance Corporation, a Texas corporation
     ("MAC") and  Mortgage  Acquisition  Partners,  L.L.C.,  a Missouri  limited
     liability company ("MAP," and collectively,  the "Parties")  jointly formed
     MAP/MAC,  L.L.C.,  ("MAP/MAC")  a Texas limited  liability  company for the
     express  purpose  of  purchasing,   servicing,  and  selling  nonperforming
     mortgage  notes and  properties.  Pursuant  to the  terms of the  operating
     agreement for this entity, MAP/MAC issued a Promissory Note to the minority
     interest  partner,  MAP for  $233,000.  The loan  payable  to the  minority
     interest  partner  in  the  MAP/MAC,  L.L.C.  joint  venture  consisted  of
     non-interest  bearing  advances used to purchase  mortgage loan portfolios.
     The Company's principal officers and stockholders have guaranteed repayment
     of fifty  percent  (50%) of the initial  loan  advances of  $233,000.  This
     initial  note was due and  payable  no later  than  thirty  (30) days after
     receipt of a written demand by the payee, MAP.

     Pursuant to the terms of the operating  agreement of this entity,  MAC will
     periodically  and  from  time  to  time  issue  distributable  cash  to MAP
     consisting of proceeds from the sale of mortgage notes and properties owned
     by  MAP/MAC,  net  of all  costs  and  fees  incurred  in the  acquisition,
     servicing  and sale of such  assets.  By  agreement  of the  Parties,  such
     distributable  cash may be  reinvested  by MAP back  into  MAP/MAC  for the
     purchase of additional  pools of mortgage  notes.  As of December 31, 2006,
     MAP has elected to reinvest  three profit  distribution  payments back into
     MAP/MAC for a total non-interest bearing loan payable amount of $1,480,136.
     Proceeds from these cash distribution payments  subsequently  reinvested in
     MAP/MAC were used for the acquisition of



                                      F-23
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005



Note 7 - Notes Payable (continued)

         additional mortgage notes, which are in the process of being serviced
         and sold. Pursuant to the terms of the MAP/MAC operating agreement, no
         interim payments of principal are due prior to the sale of the
         underlying assets. Upon sale of the underlying assets, MAC is obligated
         to repay the non-interest bearing note, from proceeds of the sale, and
         equally distribute remaining net profits, if any, to MAC and MAP
         individually.

         For all subsequent advances under this loan, including cash
distributions subsequently reinvested in MAP/MAC, and in the event MAP/MAC does
not fully repay and satisfy such advances with the proceeds from the sale or
other distribution of the related loan portfolios, MAC has guaranteed repayment
of fifty percent (50%) of the shortfall.

Note 8- Mortgages Payable

     At December 31, 2006 and 2005, the balance in this caption was comprised of
     the following:


                                              2006          2005
                                              ----          ----

  Installment note payable to Legacy
   Texas Bank, due $8,714  monthly
   beginning July 2006, interest at
   2.75% above the Federal  Home Loan
   Bank (FHLB) rate, maturing June 2016.$  990,412   $1,000,000

Other                                       70,348       71,604
                                        ----------   ----------
Total                                    1,060,760    1,071,604
Less Current portion                        24,400       10,100
                                        ----------   ----------

                                        $1,036,360   $1,061,504
                                        ==========   ==========


     The   mortgage   loan   payable  to  Legacy  Texas  Bank  (the  "Bank")  is
     collateralized  by certain  rental  real estate  located in Dallas,  Texas,
     which  comprises the Company's  land,  buildings  and  improvements  in the
     accompanying   consolidated   balance  sheets,  as  well  as  the  personal
     guarantees of two of the Company's principal officer and stockholders.  The
     interest rate on this loan is an adjustable



                                      F-24
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005




Note 8- Mortgages Payable (continued)

     rate which was fixed on June 1, 2006 and will be subsequently recalculated,
     adjusted and fixed by the Bank every three (3) years  thereafter.  From the
     inception of this loan  (December  2005) through June 1, 2006, the loan was
     payable interest only at 1% above a specified prime rate.

     Estimated principal  installments due on all mortgage loans for each of the
     five years subsequent to December 31, 2006 are as follows:

          2007                           $ 24,400
          2008                             26,400
          2009                             28,600
          2010                             31,500
          2011                             33,700


Note 9 - Minority Interests

     Minority interests on the Company's  consolidated  balance sheets represent
     the 50% ownership percentages of six subsidiaries,  MAP/MAC,  L.L.C., Apple
     Canyon Capital,  L.L. C., Bluestone Capital,  L.L.C., Canyon Ferry Capital,
     L.L.C., Dutch Fork Capital, L.L.C. and 999 Metromedia Venture, not owned by
     the Company.

     Changes to minority  interests  for the years ended  December  31, 2006 and
     2005, consisted of the following:

                                                      2006           2005
                                                      ----           ----


Balance, beginning of year                      $   691,453    $    39,797

Minority interests in net earnings (losses)
of subsidiaries                                     (90,233)       321,656

Capital contributions from minority interests     5,101,546        400,000

Distributions to minority interests                (236,223)       (70,000)
                                                -----------    -----------

Balance, end of year                            $ 5,466,543    $   691,453
                                                ===========    ===========

                                      F-25
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005


   Note 10 - Related Party Transactions

     During the years ended  December 31, 2006 and 2005,  MAC engaged in certain
     transactions  with one of its  principal  officers and with two  affiliated
     entities,  Abovo  Corporation and Vision Ads, Inc. ("VA"),  (dba "Red Horse
     Realty"), owned by a MAC vice president.

     MAC had  charged  VA, a real estate  management  firm,  for usage of office
     space,  personnel and other  administrative  costs  through  2005,  and had
     recorded an account  receivable of $50,945 from VA at December 31, 2005. At
     December  31,  2006,  management  determined  that the  amount  owed by VA,
     amounting  to  $58,481,   would  be  forgiven  in  lieu  of  the  officer's
     uncompensated  service  to the  Company  prior  to 2005 and  certain  other
     considerations.

     Abovo  Corporation  engages in the  purchase and sale of  residential  real
     estate,  and often carries the notes  receivable  with its  purchasers.  In
     2004,  MAC began  servicing  Abovo  Corporation's  real estate  loans.  MAC
     recognized  $8,406 and $9,148 of servicing fees from Abovo  Corporation for
     the years ended December 31, 2006 and 2005, respectively.

     One of the Company's principal officers and stockholders made cash advances
     of $60,574 to the Company under two unsecured  loans,  bearing  interest at
     18%,  during 2005, and  additional  loans of $15,512 in 2006 at an interest
     rate of 12%.  All  outstanding  advances  were repaid on November 30, 2006.
     Interest  expense on these  loans  amounted  to $18,021  and $2,675 for the
     years ended December 31, 2006 and 2005, respectively.

     MACC's two newly appointed  directors have indirect ownership  interests in
     50% of Dutch Fork Capital,  L.L.C., a 50%-owned  subsidiary of the Company.
     The Company is the manager of Dutch Fork,  and as such is deemed to control
     the entity.




                                      F-26
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005


Note 11 - Income Taxes

     The components of income tax (benefit) expense,  on continuing  operations,
     for the nine months ended December 31, 2006 and 2005, respectively,  are as
     follows:


                                   December 31,
                                   2006                         2005
                         -------------------------    -------------------------

         Federal:
           Current                            $ -                          $ -
           Deferred                             -                            -
                         -------------------------    -------------------------

                                                -                            -
                         -------------------------    -------------------------

           State:
           Current                              -                            -
           Deferred                             -                            -
                         -------------------------    -------------------------


          Total                               $ -                          $ -
                         =========================    =========================

The Company's  income tax expense for the years ended December 31, 2006 and
2005,  respectively,  differed  from  the  statutory  tax  rate of 34.0% as
follows:

                                                          2006          2005
                                                          ----          ----


     Statutory rate applied to income
    before income taxes                                $(332,800)   $(512,800)
Increase (decrease) in income taxes
   resulting from:
      State income taxes                                    --           --
      Other, including reserve for deferred tax
         asset and application of net operating loss
         loss carryforward                               332,800      512,800

                                                       ---------    ---------
Income tax expense                                     $    --      $
                                                       =========    =========

     Deferred tax assets and liabilities  consisted of the following at December
     31, 2006 and December 31, 2005.


                                            December 31,   December 31,
                                              2006            2005


                                           -----------   -------------
   Deferred tax assets
       Net operating loss carryforwards   $ 3,960,000    $ 3,222,000
       Less valuation allowance            (3,960,000)    (3,222,000)
                                          -----------    -----------

Net Deferred Tax Asset                    $      --      $      --
                                          ===========    ===========




                                      F-27
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005


Note 11 - Income Taxes (continued)

     As of December 31, 2006, the Company had a net operating loss  carryforward
     of  approximately  $11,600,000 to offset future taxable income.  Subject to
     current regulations, this carryforward will begin to expire in 2007. Due to
     the reverse acquisition  transaction with MAC in May 2005, the usage of the
     Company's net operating loss  carryforward  will be severely  limited.  The
     amount and  availability  of the net operating  loss  carryforwards  may be
     subject to  limitations  set forth by Section 338 of the  Internal  Revenue
     Code. Factors such as the number of shares ultimately issued within a three
     year  look-back  period;  whether  there is a deemed  more than 50  percent
     change  in  control;   the  applicable  long-term  tax  exempt  bond  rate;
     continuity of historical business; and subsequent income of the Company all
     enter into the annual  computation of allowable  annual  utilization of the
     carryforwards.

     A 100% valuation allowance has been established related to the deferred tax
     asset  resulting from the net operating loss  carryforward,  reflecting the
     uncertainty of the future realization of this asset.

Note 12 - Common Stock Transactions

     On May 14, 2004,  the  Stockholders  approved an amendment to the Company's
     Articles of  Incorporation,  which increased the par value of each share of
     common stock from $0.0001 per share to $0.001 per share and  decreased  the
     number of authorized  common shares from  175,000,000  shares to 50,000,000
     shares. The stockholders also approved a one-for-two  hundred fifty (1:250)
     reverse stock split.  Pursuant to  authorization by the Board of Directors,
     the reverse stock split became  effective for  stockholders of record as of
     November 22, 2004. Stock certificates  representing pre-split denominations
     could be  exchanged  for stock  certificates  representing  the  post-split
     denominations,  at the election of stockholders,  as mandatory  certificate
     exchange was not required.  Common stock and additional  paid-in capital at
     December 31, 2004 were restated to reflect this split. The number of common
     shares issued at December 31, 2004,  after giving effect to the split,  was
     determined  to be 664,007  (165,853,058  shares  issued  before the split),
     including 595 shares estimated to be issued to fractional stockholders.

     In connection with a Business Combination Agreement between the Company and
     MAC on May 10, 2005 (See Note 3), the Company issued 12,000,000 post- split
     shares  to the MAC  shareholders  in  exchange  for all of the  issued  and
     outstanding  shares  of  MAC.  As the  acquisition  of MAC  represented  an
     exchange of equity  interests  between  entities under common control,  the
     equity interests



                                      F-28
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005


Note 12 - Common Stock Transactions (continued)

     issued were recorded at approximately  $257,000,  representing the net book
     value of MAC on a historical  basis as of January 1, 2005, the beginning of
     the period in which the transaction occurred.

     On June 23, 2005, the Company issued  100,000  post-split  shares for legal
     services pursuant to a certain Legal Services Compensation Agreement.

Note 13 - Quasi-Reorganization

     Effective   January  1,  2006,  the  Company,   with  the  consent  of  its
     stockholders,  completed  a  quasi-reorganization,   whereby  the  retained
     deficit at December  31, 2004,  of  $23,798,786,  accumulated  prior to the
     merger of the Company with MAC, was eliminated  against  additional paid-in
     capital. The purpose of the quasi-reorganization is to more clearly reflect
     the stockholders'  equity accounts based upon the Company's  operations and
     activities as a financial  services company,  which commenced on January 1,
     2005.  The equity  section of the December 31, 2005 Balance  Sheet has been
     restated to reflect the quasi- reorganization.

Note 14 - Series A Preferred Stock Financing Agreement

     On November 30, 2006, the Company  entered into a Series A Preferred  Stock
     and Common Stock Warrant  Purchase  Agreement  ("Purchase  Agreement") with
     W.C.  Payne  Investments,  L.L.C.  and  FAX/MACC,  L.P.  (the  "Investors")
     pursuant to which the Company  sold to  Investors  1,500,000  shares of the
     Company's  Series A Preferred  Stock at a price of $1.00 per share, as well
     as warrants to purchase  4,556,694  shares of the Company's common stock at
     an  exercise  price of $0.01  per  warrant  share.  Under  the terms of the
     Purchase  Agreement,  the  Investors  purchased  1,500,000 of the preferred
     shares on November 30, 2006, with an additional  1,500,000 preferred shares
     to be  purchased  in  three  increments  of  500,000,  conditioned  on  the
     satisfaction  of certain  financial  benchmarks  set forth in the  Purchase
     Agreement on March 31, June 30, and September 30, 2007.

     Holders of the  preferred  stock are  entitled to receive  cumulative  cash
     dividends,  out of any  assets  legally  available,  at the rate of 10% per
     annum  (of the  original  per  share  issue  price of  $1.00)  per share of
     preferred  stock,  accrued  and  compounded  on  a  quarterly  basis.  Such
     dividends  will  have  preference  over any  payment  or  declaration  of a
     dividend or other distribution on the Company's common stock. The preferred
     stock is also subject to a mandatory conversion provision whereby, upon the
     determination that a holder of the preferred stock is a  "Non-Participating
     Holder", as defined in the Purchase Agreement, any preferred



                                      F-29
<PAGE>
                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005



Note 14 - Series A Preferred Stock Financing Agreement (continued)

     stock of such holder will be automatically  converted into shares of common
     stock on a 1:1 basis.

     Effective November 30, 2006, in connection with the Purchase Agreement, the
     Company entered into a Series A Preferred Stock Investors' Rights Agreement
     ("Investors'  Rights  Agreement")  with  the  Investors.  Pursuant  to  the
     Investors'  Rights  Agreement,  the Company  agreed to file a  registration
     statement  covering the resale of all issued shares of the Company's common
     stock and shares of common stock  issuable  upon  conversion or exercise of
     any  convertible  securities,  warrants,  or  options  that are held by the
     Investors to be effective within eighteen (18) months of the effective date
     of the Investors' Rights Agreement; and the Company also granted piggy-back
     registration  rights  with  respect to the  resale of any issued  shares of
     common  stock,  or shares of  common  stock  issuable  upon  conversion  or
     exercise of any  convertible  securities,  warrants or options  held by the
     Investors but not covered by the above-mentioned registration statement.

     The  Company  also  entered  into a  Stockholders'  Agreement  between  the
     Company,   the  Investors,   and  the  Company's  three  principal   common
     stockholders ("Stockholders") which provides, among other things:

          a)   The  Investors  and the  Company  will have first  offer  rights,
               providing  that,  with limited  exceptions,  should a Stockholder
               desire to transfer any of his shares, such Stockholder must first
               offer shares to the Investors and then to the Company.

          b)   The Investors are to be granted a co-sale right,  giving them the
               option to include  their  shares in any  proposed  sale of common
               stock that,  when  aggregated  with all other transfers of common
               stock,  represents at least ten percent (10%) of the  outstanding
               shares of the Company's common stock.

          c)   Any  Investor  or group of  Investors  desiring  to transfer to a
               third  party  substantially  all of the shares  and common  stock
               equivalent  shares  held by them,  which  shares of common  stock
               equivalent  shares represent at least fifty percent (50%) of each
               of  their  respective  classes  of the  Company's  stock,  hold a
               compelled sale right  providing that, in the case of such a sale,
               any non-selling  minority  stockholders  will, at the election of
               the selling  Investors,  be required to transfer  their shares to
               the  third-party  purchaser upon the same terms and conditions as
               the selling Investors.



                                      F-30
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005



Note 14 - Series A Preferred Stock Financing Agreement (continued)

          d)   All  Stockholders  and  Investors  are to be  granted  preemptive
               rights,  providing that, with limited exceptions,  if at any time
               the  Company  proposes  to issue and sell any common  stock,  the
               Company  must first offer such common  stock to each  Stockholder
               and Investor.

Note 15 - Incentive Plan

     In October  2006,  the  stockholders  of the Company  adopted the  Mortgage
     Assistance  Center  Corporation  2006 Equity  Incentive  Plan (the "Plan"),
     which  allows the  Company to grant  stock  options,  restricted  stock and
     performance awards to officers,  directors,  key employees and consultants.
     The Plan  will be  administered  by the  Company's  board of  directors  or
     committees  thereof.  Subject to  adjustment  as provided in the Plan,  the
     maximum  aggregate  number of shares  that may be issued  under the Plan is
     4,250,000 shares of common stock, provided, however, that (i) the aggregate
     number of shares  that may be issued  as  restricted  stock may not  exceed
     1,062,500 and (ii) the aggregate  number of shares that may be issued under
     statutory stock options may not exceed  2,000,000,  and (iii) the aggregate
     number of shares that may be issued under  non-statutory  stock options may
     not exceed  1,187,500.  Subject to adjustment as provided in the Plan,  the
     aggregate  number of shares that may be issued to any individual  under the
     Plan,  whether issued under options or restricted  stock,  shall not exceed
     1,000,000.  The Plan will continue in effect until terminated;  however, no
     incentive  stock  options or other  awards  will be granted  under the Plan
     after 10 years  from the  date  the  Plan  was  approved  by the  Company's
     stockholders.

     The per share  exercise  price for  shares  to be  issued  pursuant  of the
     exercise of an option will be determined by the Board; however, each option
     will be granted at an exercise  price equal to no less than the fair market
     value of a share on the date of grant, except that the case of an incentive
     stock option granted to an employee who, at the time the option is granted,
     owns stock  possessing  more than 10 percent of the total  combined  voting
     power of all classes of stock of the  Company or any Parent or  Subsidiary,
     each incentive  stock option shall be granted at an exercise price equal to
     no less than 110% of the fair market value of a share on the date of grant.

     Under  the  provisions  of the Plan,  and  pursuant  to Board of  Directors
     approval on November 28, 2006, the Company granted  statutory options (e.g.
     incentive  stock  options  for  223,400  shares of common  stock to various
     employees in consideration for employment with and services provided to the
     Company.  These  options were issued with an exercise  price of $0.85 which
     was the  closing  trading  price per share on the date of the grant.  These
     options were 100% fully vested and



                                      F-31
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005

Note 15 - Incentive Plan (continued)

     exercisable  at the date of the  grant,  and may be  exercised  at any time
     through  November 28, 2011.  The fair value of these options was determined
     by a commercially  available  software product utilizing a proven trinomial
     lattice  valuation  methodology.  Based on this analysis,  the value of the
     options at grant was  determined to be  approximately  $0.37.  Allowing for
     potential future forfeitures,  a non-cash  compensation  expense of $83,571
     was recorded for 2006.

     Under  the  provisions  of the Plan,  and  pursuant  to Board of  Directors
     approval on November 28, 2006, the Company  granted  non-statutory  options
     (e.g.  non- qualified  stock options) for 834,800 shares of common stock to
     various  individuals  in  consideration  for  prior  employment  and  /  or
     consulting services provided to the Company. These options were issued with
     an exercise price of $0.85 which was the closing trading price per share on
     the date of the grant. These options were 100% fully vested and exercisable
     at the date of the grant, and may be exercised at any time through November
     28, 2011.  The fair value of these options was determined by a commercially
     available  software product  utilizing a proven trinomial lattice valuation
     methodology.  Based on this analysis, the value of the options at grant was
     determined  to  be  approximately  $0.38.  Allowing  for  potential  future
     forfeitures,  a non-cash  compensation expense of $318,466 was recorded for
     2006.

     In connection  with three year employment  agreements  entered into between
     the Company and two of its principal  officers and stockholders on November
     30, 2006,  the officers  were granted  incentive  stock options for 600,000
     shares of common stock under the Plan.  One third of such  incentive  stock
     options will become  exercisable  upon each successive  anniversary date of
     the employment  agreements,  provided that the officers are employed by the
     Company on each such anniversary  date. The fair value of these options was
     determined by a commercially  available software product utilizing a proven
     trinomial lattice valuation methodology.  Based on this analysis, the value
     of the  options at grant was  determined  to be  approximately  $0.45.  All
     non-cash  compensation expense for this issuance will occur in future years
     pursuant to vesting.

Note 16 - Common Stock Warrants

     On November 30, 2006, the Company  entered into a Series A Preferred  Stock
     and  Common  Stock  Warrant  Purchase  Agreement  (See Note  13),  in which
     warrants to purchase  4,556,694  shares of the Company's common stock at an
     exercise price of $.01 per share were issued to the Investors. The warrants
     may be exercised at any time through  November 30, 2016.  The fair value of
     these warrants was determined by a commercially  available software product
     utilizing a proven


                                      F-32
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005


Note 16 - Common Stock Warrants (continued)

     trinomial lattice valuation methodology.  Based on this analysis, the value
     of the warrants at grant was determined to be $1.00 per warrant  share.  In
     addition to the above warrants,  the Company issued "Back-End  Warrants" to
     the Investors to purchase 2,700,262 shares of the Company's Common stock at
     an exercise price of $0.01 per share.  However,  the Back-End  warrants are
     only  exercisable  to the extent that the Company fails to achieve  certain
     financial benchmarks as of December 31, 2007.

     In addition to the warrants  described  above,  the Company  issued 150,000
     warrants to the  Investors  in  connection  with their  appointment  to the
     Company's board of directors. These warrants have an exercise price of $.39
     per share, which price may be adjusted with the terms of the warrants.  The
     Company ascribed a value of $0.62 per warrant share to these warrants using
     previously noted trinomial lattice  valuation model.  These warrants expire
     November 30, 2016.

     The Company also issued warrant  certificates  for 467,000 shares of common
     stock to its legal counsel and for 150,000  shares to a financial  advisor,
     both at an  exercise  price of $0.39 per share,  subject to  adjustment  in
     accordance  with the  terms  of the  warrants.  The  Company  valued  these
     warrants at $0.62 per warrant share using the trinomial  lattice  valuation
     methodology  and recorded a non-cash  compensation  expense of $382,585 for
     2006. These warrants expire on November 30, 2011.

     At  December  31,  2006,  the  Company  had an  obligation  to a  financial
     consultant  pursuant to a June 19, 2006 Consulting  Agreement for an equity
     compensation fee of $106,106,  representing five percent (5%) of the amount
     of monies loaned to the Company by lenders procured by the consultant.  The
     equity  compensation  fee is to be converted to a share basis  according to
     the closing  trading  price per share on the date each  individual  funding
     tranche  closes and paid in the form of  five-year  common  stock  purchase
     warrants of the Company with an aggregate  fair market value  equivalent to
     the equity  compensation fee earned.  The warrants when issued will have an
     exercise  price  of $.10  per  share.  The  warrant  certificates  for this
     obligation have not yet been issued.

Note 17- Share-Based Compensation

     At December 31, 2006,  the Company had granted stock options for a total of
     1,658,200  shares of common stock under its 2006 Equity  Incentive Plan and
     had also granted common stock purchase  warrants for 8,053,956  shares (See
     Notes 15 and 16). All  outstanding  options and warrants were granted on or
     after November 28, 2006. Any previous  agreements  with  employees,  former
     employees or


                                      F-33
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005


      Note 17- Share-Based Compensation (continued)

     consultants  were  cancelled.  The  total  compensation  cost that has been
     charged  against  income for all such  options  and  warrants  granted  was
     $992,182 for the year ended December 31, 2006. The share-based compensation
     expense  increased  the basic  loss per  share by $0.08 for the year  ended
     December  31, 2006.  The result  reflects no related tax benefit due to the
     Company's  full  valuation  allowance  on its  deferred  tax assets.  As of
     December 31, 2006,  there was $294,652 of  compensation  expense related to
     non-vested  share awards that is expected to be recognized over a period of
     three years.

     All of the options and warrants granted,  with the exception of the options
     for  600,000  shares  under  employment  agreement  with two  officers  and
     principal stockholders, were fully vested at the grant date.

     A summary of stock options and warrants outstanding at December 31, 2006 is
     as follows:

                                                Weighted-Average
              Option and        Range of          Remaining     Weighted-Average
            Warrant Shares   Exercise Prices  Contractual Life    Exercise Price
            --------------   ---------------  ----------------    --------------

Outstanding   9,712,156      $ .01-1.11        8.8 years          $   .20

Exercisable   6,411,894      $ .01-.85         8.7 years          $   .20



     The total aggregate intrinsic value of options and warrants outstanding and
     options and warrants  exercisable as of December 31, 2006 was approximately
     $7,700,000 and $5,453,000, respectively.

     The lattice (trinomial)  option-pricing model was used to estimate the fair
     value of options and warrants at grant date in 2006.  The  weighted-average
     grant  date fair  value of  options  and  warrants  granted in 2006 and the
     significant  assumptions  used in determining  the underlying fair value of
     each option or warrant grant, on the date of the grant were as follows:



                                      F-34
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005


     Note 17- Share-Based Compensation (continued)

         Weighted-average grant date
         fair value of options and warrants
         granted                                  $0.87

         Assumptions:
         Risk-free rate of return                 5.0%
         Expected life                           5 years
         Weighted-average volatility              91.7%
         Expected dividend yield                  0.0%


     The  risk-free  rate of return  is  estimated  based on the yield  curve of
     Constant  Maturity  Treasury  ("CMTs") as  published  by the U.S.  Treasury
     Department. These rates are projected over a range of future maturity dates
     based  on the  closing  market  bid  yields  on  actively  traded  Treasury
     securities in the over-the-counter market.

     The Company's  assumed  dividend yield of zero is based on the fact that it
     has never  paid cash  dividends  and has no present  intention  to pay cash
     dividends.

     Since adoption of SFAS 123(R) on January 1, 2006, the expected  share-price
     volatility  assumption  used by the  Company  has been  based on a blend of
     implied  volatility  in  conjunction  with  calculations  of the  Company's
     historical  volatility  as determined  by various  mathematical  models for
     calculating  volatility.  These values are then  adjusted  over a five-year
     period  coinciding  with  the  anticipated  life of the  options.  Based on
     counsel  provided by a third-party  consultant,  the Company  believes this
     methodology will result in the best estimate of expected volatility.

     The  lattice   option-pricing   model  also  allows   assumptions  for  the
     sub-optimal  exercise of vested shares prior to the full expiration term of
     the option.  The Company's  assumption for this parameter has been based on
     published  research which  establishes the sub-optimal  exercise event as a
     multiple of the exercise price of vested shares.



                                      F-35
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005

Note 18 - Commitments

         Consulting Contracts:

     The  Company  had  contracted  with RJ Falkner & Company,  Inc.  to provide
     consulting  services in regard to preparation of a Research  Profile on the
     Company,   distribution  of  such  reports,   identification  of  potential
     institutional  investors and other matters  related to investor  relations.
     The  contract  was for twelve  months,  and was to continue  monthly  after
     January 15, 2006 unless  cancelled by either party.  Under the terms of the
     contract,  RJ Falkner & Company,  Inc. was to be compensated $3,000 monthly
     and issued 50,000 shares of MACC common stock.  MACC had agreed to register
     these  shares  with the SEC upon the  registration  of any other  shares or
     within twenty-four months, whichever occurred first. This contract has been
     terminated  and the parties are engaged in a current  legal  proceeding  to
     achieve a  resolution.  The  potential  amount of any likely  settlement or
     legal remedy is not anticipated to be a materially significant amount.

     Mortgage  Assistance  Center  Corporation  signed a Letter  Agreement dated
     November 29, 2006 with Michael Caolo & Associates, Attorneys and Counselors
     ("Caolo") as a non-exclusive  legal and business  advisor and consultant in
     the  position  of  General  Counsel  for MACC  from the date of the  Letter
     Agreement  through the  calendar  year 2007 to provide  legal and  business
     advice,  counsel and services in connection  with the  coordination  of all
     legal  matters of MACC,  including  coordination  with  special  securities
     counsel for S. E. C. reporting requirements,  and including but not limited
     to possible private placements, mergers, consolidations, recapitalizations,
     acquisitions  or  purchases  of  assets  or equity  interests,  or  similar
     transactions.  The Letter  Agreement  can be  automatically  renewed  after
     December  2007 on the same basis unless either party  provides  thirty days
     prior  written  notice of  termination  to the other  party.  For  services
     rendered,  MACC  agreed to pay Caolo a  monthly  retainer  fee of $6000 per
     month during the term of this agreement.  In  consideration  for the effort
     expended,  the quality services rendered,  the results achieved and the new
     resources developed for MACC, Caolo is entitled to additional  compensation
     of equity in MACC  ("Equity  Fee") in the form of a five year common  stock
     purchase warrant for four hundred sixty-seven  thousand (467,000) shares of
     common stock of MACC for no additional consideration other than an exercise
     price of fair market value to be paid by Caolo  whenever  such common stock
     purchase warrant is exercised.  The Letter Agreement  establishes that this
     common stock purchase warrant for 467,000 shares of common stock of MACC is
     partially  being  made in lieu of and as a  replacement  for  that  certain
     previous  common stock purchase  warrant for 317,000 shares of common stock
     of MAC which was,  through  mutual  mistake,  erroneously  set forth in the


                                      F-36
<PAGE>
                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                           December 31, 2006 and 2005


Note 18 - Commitments (continued)

         Consulting Contracts: (continued)

     previous  Agreement  dated  September  1,  2005,  between  Michael  Caolo &
     Associates   and  MAC,  the   subsidiary,   instead  of  MACC,  the  parent
     corporation, which was the intended proper party.

     On November 27,  2006,  the Company  executed a Letter  Agreement to retain
     Parkwood  Advisors,  L.L.C.  ("Parkwood") as a non-exclusive  financial and
     business  advisor to MACC.  Scope of the consulting  services  contemplated
     under this agreement  include providing counsel and services to support the
     turnaround  leadership of MACC;  capitalization and financing;  use of cash
     and use of investment  proceeds;  business plan and financial  projections;
     SEC filings; and other special projects related to supporting the growth of
     the business  including  M&A,  compliance,  and internal  business  process
     improvements  as  mutually  agreed.  This  Agreement   established  a  term
     commencing on December 1, 2006,  through  December 31, 2007,  unless either
     party provides thirty days prior written notice of termination to the other
     party.  For services  rendered MACC will pay Parkwood a monthly retainer of
     three thousand dollars ($3000) per month. In  consideration  for the effort
     expended, the quality services rendered and the results achieved,  Parkwood
     shall be entitled to  additional  compensation  of equity in MACC  ("Equity
     Fee") in the form of a five year  common  stock  purchase  warrant  for one
     hundred  fifty  thousand  (150,000)  shares  of  common  stock  of  for  no
     additional  consideration other than an exercise price of fair market value
     to be paid by Parkwood  whenever  such  common  stock  purchase  warrant is
     exercised. The Letter Agreement establishes that this common stock purchase
     warrant for 150,000 shares of common stock of MACC is partially  being made
     in lieu of and as a  replacement  for that  certain  previous  common stock
     purchase warrant for 100,000 shares of common stock of Mortgage  Assistance
     Center  Corporation  which was set forth in the previous  Letter  Agreement
     dated May 5, 2006, between Parkwood Advisors, LLC and MACC.





                                      F-37
<PAGE>