UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    Form 10-K

                                   (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, 2007

[]  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 Registrant as specified in its charter)

          Florida                                                 06-1413994
         ---------                                             ----------------
 (State or other jurisdiction                                   (IRS Employer
      of incorporation)                                         identification
                                                                    number)

         1341 W. Mockingbird Lane, Suite 1200 West, Dallas, Texas 75247
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (214) 670-0005

      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


Indicate by check mark if the  registrant is a well-known  seasoned  issuer,  as
defined in Rule 405 of the Securities Act. [ ] Yes [X] No

Indicate  by  check  mark if the  registrant  is not  required  to file  reports
pursuant to Section 13 or 15(d) of the Exchange Act. [ ] Yes [X] No

Indicate by check mark whether the registrant 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 [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form  10-K.  [X]  Indicate  by check  mark  whether  the  registrant  is a large
accelerated  filer, an accelerated  filer, a non-accelerated  filer or a smaller
reporting   company.   See  the  definitions  of  "accelerated   filer,"  "large
accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange
Act. (Check one):

Large accelerated filer |_|                   Non-accelerated filer     |_|
Accelerated filer       |_|                   Smaller reporting company [X]

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, 2007 was $3,925,235.

The aggregate market value of voting common equity held by  non-affiliates as of
June 29,  2007 was  approximately  $726,972.  As of April 11,  2008,  there were
14,071,024 shares of Common Stock issued and outstanding.



<PAGE>



                     MORTGAGE ASSISTANCE CENTER CORPORATION

                                Index to Contents


                                                                     Page Number

     Part I

     Item 1       Business.................................................3
     Item 1A      Risk Factors..............................................
     Item 1B      Unresolved Staff Comments.................................
     Item 2       Properties................................................
     Item 3       Legal Proceedings........................................8
     Item 4       Submission of Matters to a Vote of Security Holders......9

     Part II

     Item 5       Market for Registrant's Common Equity, Related Stockholders
                  Matters and Issuer Purchases of Equity Securities............9
     Item 6       Selected Financial Data.......................................
     Item 7       Management's Discussion and Analysis of Financial Condition
                  and Results of Operations...................................12
     Item 7A      Quantitative and Qualitative Disclosures About Market Risk....
     Item 8       Financial Statements and Supplemental Data.................F-1
     Item 9       Changes in and Disagreements with Accountants
                  on Accounting and Financial Disclosures.....................17
     Item 9A(T)   Controls and Procedures.....................................17
     Item 9B      Other Information...........................................17

     Part III

     Item 10       Directors, Executive Officers and Corporate Governance.....18
     Item 11       Executive Compensation.....................................20
     Item 12       Security Ownership of Certain Beneficial Owners and
                   Management and Related Stockholder Matters.................23
     Item 13       Certain Relationships and Related Transactions, and
                   Director Independence......................................23
     Item 14       Principal Accountant Fees and Services.....................24

     Part IV

     Item 15       Exhibits, Financial Statement Schedules....................24

     Signatures...............................................................25






<PAGE>



                  CAUTION REGARDING FORWARD-LOOKING INFORMATION

From  time to time,  certain  information  provided  by the  Company,  including
written  or  oral   statements   made  by  its   representatives,   may  contain
forward-looking information as defined in Section 21E of the Securities Exchange
Act of 1934.  Forward-looking  statements include  statements  concerning plans,
objectives,  goals,  strategies,  future events or  performance  and  underlying
assumptions and other statements,  which are other than statements of historical
facts.  Certain  statements  in this Form 10-K are  forward-looking  statements.
Words  such  as  "expects",   "believes",   "anticipates",   "may",   "intends",
"projects",  "estimates"  and  similar  expressions  are  intended  to  identify
forward-looking statements. The Company's expectations,  beliefs and projections
are expressed in good faith and are believed by the Company to have a reasonable
basis,  including  without  limitation,  management's  examination of historical
operating  trends,  and data  contained in the Company's  records and other data
available  from third parties;  but there can be no assurance that  management's
expectation,   beliefs  or  projections   will  be  achieved  or   accomplished.
Forward-looking  statements  are subject to risks and  uncertainties  that could
cause actual results to differ  materially from those projected.  Such risks and
uncertainties  include,  but are not  limited  to,  limited  operating  history,
historical  operating losses and the uncertainty of the Company's  profitability
in the future,  the need to raise additional  capital to sustain  operations and
implement  its future  business  plan,  and other factors that may be beyond the
Company's control.  These factors include changes in regulations or legislation,
adverse  determination  with respect to litigation  or other claims,  ability to
recruit and retain  employees,  availability  of  mortgage  note  portfolios  at
acceptable prices, and increases in operating costs.

Given these uncertainties, readers of this Form 10-K 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 - Business

History

Mortgage Assistance Center Corporation,  a Florida corporation (the "Company" or
"MACC"),  was  organized  in 1976,  under  the name  Knight  Airlines,  Inc.  In
September 1995,  pursuant to a plan of  reorganization,  the Company was renamed
Safe Alternatives Corporation of America.
In January  2005,  the Company  changed its name to Mortgage  Assistance  Center
Corporation,  and through a series of  corporate  reorganizations  completed  in
August 2005, the Company acquired Mortgage  Assistance  Corporation  ("MAC"),  a
Texas corporation. MAC is now a wholly owned subsidiary of MACC.

Business

The Company 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  mortgage  notes are secured by real estate,  are typically 90
days to 2 years  past due at the time of  purchase,  and in many cases have been
foreclosed  upon. 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 and to the current market value of the underlying
real estate.  This business model enables MAC to provide assistance to borrowers



                                       3
<PAGE>

and 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 though four 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;  (c)
foreclosing  or obtaining a  deed-in-lieu  of  foreclosure  on  properties  that
continue  to be  non-performing;  or (d)  purchasing  real  estate that has gone
through the  foreclosure  process  and then  either  renting or selling the real
estate. The Company believes that current and future market conditions signal an
increasing  rate of  foreclosures on residential  properties.  Accordingly,  the
Company anticipates increased business opportunities from this segment.

Additionally,  MAC  generates  revenue  via fees  charged to manage and  service
mortgage  notes for its joint  ventures  and other  investors.  When the Company
acquires a loan or pool of loans,  the  process of  resolution  begins  with the
borrower,  changing the status of  non-performing  loans into either  performing
loans or foreclosing on the real estate. The Company may resell a portion of its
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  financed the acquisition of its loan pools through
various  profit  participation  entities  directly with investors and by issuing
promissory  notes to  individuals  and  investment  entities.  In addition,  the
Company has historically  sustained  recurring losses from operations and had an
accumulated stockholders' deficit as of December 31, 2007.

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.  MAC seeks profit opportunities in many areas of this
industry,  but  currently  focuses its  business  in lower value  non-performing
mortgage pools. MAC is principally  purchasing  non-performing  mortgages in the
$200,000 or less range as management  believes that this segment of the industry
generates a higher profit margin. Competitors in this industry include financial
institutions, hedge funds, individual investors, as well as other privately held
and public companies,  many of which may be better capitalized than MAC, and may
have superior business relationships to suppliers of asset portfolios and better
sales channels to sell product. Typically, large amounts of cash are required to
facilitate  the  purchase of  non-performing  mortgage  pools and the  Company's
ability to compete in this market has  historically  been  limited by this large
cash requirement.

Employees

As of December 31, 2007, the Company had 32 employees.

Item 1A - 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



                                       4
<PAGE>

The Company has sought to identify  what it believes to be the most  significant
risks to its business as discussed in "Risk Factors"  below,  but cannot predict
whether or not or to what extent any 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 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
implementation of the Company's  business model.  While the Company has invested
significant  financial  resources over the last year to upgrade its  operational
infrastructure,  the Company will continue to: incur costs to develop, introduce
and enhance its products; establish business relationships;  acquire and develop
products that will complement each other; and improve its technological support.
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 a period of time as it continues to improve 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

On November 30, 2006,  the Company  entered into a Series A Preferred  Stock and
Common Stock Warrant  Purchase  Agreement  ("Series A 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
9,111,387 shares of the Company's common stock at an exercise price of $0.01 per
warrant share. Under the terms of the Series A Purchase Agreement, the Investors
would also purchase an additional  1,500,000  preferred shares, in increments of
500,000,  conditioned on the  satisfaction of certain  financial  benchmarks set
forth in the Purchase Agreement.

During April 2007,  despite not achieving its  benchmarks for the first quarter,
the Company received the first of the three  subsequent  tranches of $500,000 in
cash as  contemplated by the November 30, 2006 financing  transaction.  However,
the Company did not achieve its benchmarks for the subsequent  periods,  and the
Investors  advised the Company that they did not intend to fund further tranches
under the Purchase Agreement.

In August 2007,  after  discussions  with the Investors,  the Company received a
proposal from the Investors  with respect to an equity  investment of $1,000,000
in exchange for the issuance of  267,347,556  new shares of common stock,  which
would represent  approximately 95% of the outstanding shares of our common stock
(the  "Transaction").  Effective  September  2007,  the Company  entered into an
agreement with the Investors with respect to the Transaction.  The agreement was
structured  as an amendment  to the  Purchase  Agreement  described  above.  The
Investors  advanced the $1,000,000  purchase price for the 267,347,556 shares of
common stock in two separate tranches of $500,000,  one of which was paid to the
Company in August,  2007,  prior to the entry by the  parties of the  definitive
agreement, and the second of which was paid to the Company in October, 2007. The



                                       5
<PAGE>

issuance  of the  shares to the  Investors  is subject  to an  amendment  to the
Company's Articles of Incorporation increasing the Company's authorized shares.

The  Company  continues  to  require  additional  operating  capital in order to
sustain operations.  Without such additional capital,  there can be no assurance
that the Company can continue to operate as a going concern.

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, they 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  consolidated
audited  financial  statements of the Company for the period ended  December 31,
2007,  indicates that operating  losses  incurred during 2007 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 for the Company's stock has from time
to time experienced  extreme price and volume  fluctuations  (See Item 5 of this
Form 10-K), and the market price of the Company's common stock could continue to
be volatile  due to  factors,  most of which are beyond the  Company's  control,
including but not limited to, 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



                                       6
<PAGE>

     o    Future sales of the Company's common stock.


Risks Relating To Penny Stocks

Because  the  Company's  stock is quoted on the NASD Over The  Counter  Bulletin
Board ("OTCBB") 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, the 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.

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 the  Company's  securities  probably
constitute  "penny stock" within the meaning of the rules, the rules would apply
to the Company and its  securities.  The rules may further affect the ability of
owners of the stock to sell securities in any market that may develop. There may
be a limited or no 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 realize.  In some cases, the stock may fall quickly
in value. Investors may be unable to reap any profit from any sale of the stock.
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



                                       7
<PAGE>

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,  the general state of the economy, available mortgage
pools,  competing market  developments,  and the Company's ability to market its
products  successfully.  It will be necessary to raise  additional funds through
equity and/or debt financings. Any equity financings could result in dilution to
the Company's  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.

The  Company's  market  share in the  non-performing  mortgage  industry  is not
significant. Maintaining or increasing the Company's market share will depend on
its ability to develop and maintain a niche in which there is an adequate supply
of notes and real estate that can be profitably  acquired and remarketed.  There
is no assurance that the Company will generate revenues or profits.

Reports Filed with the SEC

The Company is a public  reporting  company and files periodic  reports with the
Securities and Exchange  Commission in compliance with the rules and regulations
of the Securities Exchange Act of 1934. The public may read and copy this Annual
Report on Form 10-K (and previous  Annual  Reports filed on 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 1B - Unresolved Staff comments

As  a  smaller  reporting  company,   MACC  is  not  required  to  provide  this
information.

Item 2 - Properties

MACC,  through  its 50% equity  interest  in a joint  venture,  owns a two-story
office/warehouse building with 69,551 square feet situated on 5.34 acres of land
located  at 999  Metro  Media in  Dallas,  Texas.  Pursuant  to the terms of the
purchase agreement, the joint venture is obligated for the entire amount of this
building's  monthly  mortgage  payment of $8,714 per month. The joint venture is
also solely responsible for the servicing,  maintenance,  and management of this
property.  Pursuant to a lease  agreement  that  expires  April 30,  2008,  this
office/warehouse  facility is currently  being leased for $17,500 per month.  No
assurance  can be provided  that the  property  will be leased  beyond April 30,
2008, or that if the property is leased  beyond April 30, 2008,  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-K.

The Company's  principal  executive offices are located at 1341 West Mockingbird
Lane, Dallas,  Texas 75247. The lease is for approximately 17,563 square feet at
this location pursuant to a lease agreement that expires March 2014. The current
monthly  rental  under this lease is $15,002 and the rental  escalates  over the



                                       8
<PAGE>

term of the lease to $21,954 per month for the final twelve months,  for a total
of approximately $1,629,000 over the lease term.

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.

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

On August 8, 2007,  the Board of Directors  received a written  consent from the
holders of 7,413,333 shares of our common stock  authorizing an amendment to the
Articles of  Incorporation  that  increases the  authorized  number of shares of
common  stock  that the  Company  is  permitted  to  issue  from  50,000,000  to
500,000,000 (the "Amendment").  The 7,413,333 shares represented by this written
consent constituted  approximately 58% of the then issued and outstanding shares
entitled to vote on the  Amendment,  which vote is sufficient  under Florida law
and the Articles of Incorporation to approve the Amendment.  The Company has not
yet filed the Amendment with the State of Florida but,  pending the filing of an
Information  Statement  pursuant to the  Securities  Exchange  Act,  the Company
intends to file the Amendment with the State of Florida.

PART II

Item 5 - Market for registrant's  Common Equity, and Related Stockholder Matters
and 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  2006 and 2007 are listed  below.  The  information  was
obtained from the NASD OTC 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 and 2007,
the Company's stock was quoted under the symbol MTGC.OB.




                                   2006                      2007
                           -----------------------------------------------
                             Low         High          Low           High
                           -------      ------       -------        ------

        First Quarter       $1.30        $2.50        $0.64          $1.01
        Second Quarter      $1.05        $1.85        $0.25          $0.75
        Third Quarter       $0.55        $1.55        $0.16          $0.45
        Fourth Quarter      $0.55        $1.01        $0.06          $0.21



                                       9
<PAGE>
<TABLE>
<CAPTION>

Holders of Record:


The Company had approximately  1,347 holders of record of its common stock as of
December 31, 2007, holding 14,071,024 common shares issued and outstanding.

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,  2007.  Information  is  included  for  equity
compensation plans not approved by the Company's security holders.



         Equity Compensation Plan Information

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

         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)
         ------------------------------ -------------------------- ---------------------- -----------------------
         Equity Compensation
         Plans approved by
         security holders                        3,182,800                 $0.83                  1,068,000
         ------------------------------ -------------------------- ---------------------- -----------------------
         Equity Compensation
         Plans not approved by
         security holders                        1,143,891                 $0.57                  N/A
         ------------------------------ -------------------------- ---------------------- -----------------------
         Total                                   4,325,891                 $0.76                  N/A
         -------------------------------------------------------- ---------------------- -------------------------

</TABLE>










                                       10
<PAGE>

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 248,000 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,  unless sooner  terminated  pursuant to the Plan. Of
         these  options,  options  for  16,000  shares had been  terminated  and
         options for 232,000 shares were  outstanding as of December 31, 2007. A
         third-party  consultant determined the fair value of these options with
         a  commercially  available  software  product  that  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,  unless  sooner  terminated
         pursuant to the Plan.  As of December 31, 2007,  all of these  options,
         options had been terminated.  A third-party  consultant  determined the
         fair value of these  options  with a  commercially  available  software
         product that 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  that  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.
         These officers were terminated by the Company and, as a result, options
         for 300,000 shares were terminated and the remaining options,  of which
         only 100,000 are vested,  will be terminated on April 30, 2008,  unless
         exercised before then.

4)       In connection with a retention agreement reached with a key employee on
         January 26, 2007, the employee was granted 50,000 restricted shares and
         50,000  incentive  stock  options.  Under the  terms of the  agreement,
         one-third of the shares will become  exercisable  upon each  subsequent
         anniversary date of the agreement provided that the Company employs the
         individual on each such  anniversary  date. The incentive stock options
         were issued at an  exercise  price of $0.64 per share which was the per
         share price at the close of trading on January 26. The option value was
         determined to be $0.34 per share.

5)       In connection  with the employment  agreement  entered into between the
         Company and Mr. Ron Johnson on  February 9, 2007,  the Company  granted
         incentive  options for 1,000,000 shares of common stock under the Plan.
         One third of such options became exercisable upon the full execution of
         the  employment  agreement,  and the  remaining  two thirds will become
         exercisable  in two equal  installments  on each of the  subsequent two
         anniversary  dates  of the  employment  agreement,  provided  that  Mr.
         Johnson is  employed by the Company on each such  anniversary  date.  A
         third-party  consultant determined the fair value of these options with
         a  commercially  available  software  product  that  utilizes  a proven



                                       11
<PAGE>

         trinomial lattice valuation  methodology.  Based on this analysis,  the
         value of the options at grant was determined to be approximately $0.37.

6)       In connection  with the employment  agreement  entered into between the
         Company and Mr. Richard  Coleman on March 1, 2007, the Company  granted
         Mr. Coleman  options for 750,000 shares of common stock under the Plan.
         One third of such options became exercisable upon the full execution of
         the  employment  agreement,  and the  remaining  two thirds will become
         exercisable  in two equal  installments  on each of the  subsequent two
         anniversary  dates  of the  employment  agreement,  provided  that  Mr.
         Coleman  is  employed  by the  Company  on  such  anniversary  date.  A
         third-party  consultant determined the fair value of these options with
         a  commercially  available  software  product  that  utilizes  a proven
         trinomial lattice valuation  methodology.  Based on this analysis,  the
         value of the options at grant was determined to be approximately $0.51.
         Mr.  Coleman  resigned  from the Company on February 4, 2008,  and as a
         result, unvested options for 500,000 shares were terminated.

























                                       12
<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-K,
         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.  This  warrant  was  originally  issued  at an
         exercise price of $0.39 per share,  subject to adjustment in accordance
         with the terms of the warrants. This warrant was subsequently cancelled
         and reissued on May 7, 2007 at an exercise price of $0.65 which was the
         actual  price per  share at the  close of  trading  on May 7,  2007.  A
         third-party  consultant determined the fair value of these options with
         a  commercially  available  software  product  that  utilizes  a proven
         trinomial lattice valuation methodology.  The value of the warrants was
         determined  to be $0.29  per  warrant  share on the date of the  grant.
         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-K, 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. This warrant was originally issued at an exercise price of
         $0.39 per share,  subject to adjustment in accordance with the terms of
         the warrants.  This warrant was subsequently  cancelled and reissued on
         May 7, 2007 at an exercise  price of $0.65  which was the actual  price
         per  share at the  close  of  trading  on May 7,  2007.  A  third-party
         consultant   determined   the  fair  value  of  these  options  with  a
         commercially   available   software  product  that  utilizes  a  proven
         trinomial lattice valuation methodology.  The value of the warrants was
         determined  to be $0.29 per warrant  share.  These  warrants  expire on
         November 30, 2011.

3)       At December 31,  2007,  the Company had a  cumulative  obligation  to a
         financial  consultant pursuant to a June 19, 2006 Consulting  Agreement
         for an equity  compensation fee of $308,133,  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  585,096  warrant  shares.  Pursuant  to this  agreement,  the
         consultant was issued a common stock purchase  warrant on June 11, 2007
         for 157,866  warrant shares at an exercise price of $0.40 which was the



                                       13
<PAGE>

         actual   per  share   price  at  the  close  of  trading  on  June  11.
         Subsequently,  the  consultant  was issued a second warrant for 219,025
         shares on June 29, 2007 at an exercise  price of $0.43.  A  third-party
         consultant   determined   the  fair  value  of  these  options  with  a
         commercially   available   software  product  that  utilizes  a  proven
         trinomial lattice valuation methodology.  The value of the warrants was
         determined  to be $0.18 and $0.19,  respectively,  per  warrant  share.
         These warrants expire five years from the date of grant. As of December
         31, 2007 the Company had an obligation to issue another warrant to this
         consultant for a total of 208,205 shares of common stock.

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 were originally issued at an exercise price of $.39 per share.
         These warrants were subsequently  cancelled and reissued on May 7, 2007
         at an exercise  price of $0.65 which was the actual  price per share at
         the  close  of  trading  on  May  7,  2007.  A  third-party  consultant
         determined  the  fair  value  of  these  options  with  a  commercially
         available  software  product that utilizes a proven  trinomial  lattice
         valuation  methodology.  The value of the warrants was determined to be
         $0.29 per warrant share. These warrants expire November 30, 2016.

Recent Sales of Unregistered Securities:

In addition  to the  issuances  of options  described  above  under  "Securities
Authorized for Issuance under Equity Compensation Plans," the Company has issued
the following securities without registration under the Securities Act of 1933:

Legal Services Plan
-------------------

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.

Series A Preferred Stock and Common Stock Warrants
--------------------------------------------------

On November 30, 2006, the Company, along with W.C. Payne Investments,  L.L.C and
FAX/MACC, L.P. (collectively,  the "Investors" entered into a Series A Preferred
Stock and  Common  Stock  Warrant  Purchase  Agreement  (the  "Series A Purchase
Agreement"), 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 $.01 per warrant share (the  "Warrants").  Under the terms of
the Series A Purchase Agreement, the Investors purchased 1,500,000 of the Shares
on November 30, 2006, with the additional  1,500,000 Shares to be purchased,  in
increments of 500,000,  conditioned upon the satisfaction of certain  benchmarks
by March 31, June 30, and  September  30, 2007.  The Company did not achieve its
benchmarks for the period ended March 31, 2007;  however,  the Investors  waived
the benchmarks for this period and, during April 2007, the Company  received the
first of the three  subsequent  tranches of $500,000 in cash in exchange  for an
additional  500,000 shares of Series A Stock,  as  contemplated  by the Series A
Purchase Agreement.

Funding Commitment
------------------

On August 10, 2007,  in  connection  with a $300,000  bridge  loan,  the Company
granted  to the  lender of the  bridge  loan the right to  receive a warrant  to
purchase  37,522,464  shares of our common stock at an exercise  price per share
equal to the closing price of a share of the common stock on the day immediately



                                       14
<PAGE>

preceding  the date  warrant  is issued.  The  Company  also  agreed to issue an
additional  warrant  providing  the lender  with the  opportunity  to receive an
additional  56,283696  shares of common stock.  This second  warrant will become
exercisable  with  respect  to  3,752,246  shares  of  common  stock  for  every
$2,000,000 in financing provided to the Company by the lender or his affiliates,
if and when requested by the Company;  provided that he or his  affiliates  have
such funds  available for such purpose.  Both these warrants will be issuable by
the  Company  upon  filing  of  an  amendment  to  the  Company's   Articles  of
Incorporation, increasing the number of shares that the Company is authorized to
issue.  The Company has obtained the consent of majority the shares  entitled to
vote on such amendment,  which under Florida law, is sufficient to authorize the
amendment.  The Company intends to file the amendment with the State of Florida,
pending the filing of an Information  Statement with the Securities and Exchange
Commission.

New Financing
-------------

The Company also did not achieve its benchmarks under the above described Series
A  Purchase  Agreement  for the  period  ended  June  30,  2007.  After  initial
discussions with the Investors, the Company was advised that the Investors would
not fund the second tranche of $500,000.  After additional  discussions with the
Investors,  the Company  received a new proposal from the Investors with respect
to  an  equity  investment  of  $1,000,000  in  exchange  for  the  issuance  of
267,347,556 new shares of common stock, which would represent  approximately 95%
of the  outstanding  shares of our common stock (the  "Transaction").  Effective
September  2007,  the Company  entered into an agreement with the Investors with
respect to the Transaction.  The agreement was structured as an amendment to the
Series A Purchase  Agreement.  The Investors  advanced the  $1,000,000  purchase
price for the  267,347,556  shares of common stock in two  separate  tranches of
$500,000,  one of which was paid to the  Company in August,  2007,  prior to the
entry by the parties of the  definitive  agreement,  and the second of which was
paid to the  Company  in  October,  2007.  The  issuance  of the  shares  to the
Investors is subject to the above described  amendment to the Company's Articles
of Incorporation.

Venture Funding
---------------

Effective  October 22, 2007, in  connection  with a joint venture by and between
MAC and HBK Fund MS LLC, the Company had issued a warrant to purchase  shares of
our common stock, that would,  when, if exercised in full, result in the warrant
holder  holding  33% of  the  outstanding  shares  of  common  stock  (the  "HBK
Warrant").  The HBK  Warrant  vests and  becomes  immediately  exercisable  with
respect to:

1)       Three and one-third  percent  (3.33%) of the shares of common stock for
         which the HBK Warrant is  exercisable  for each $2.5 million in venture
         funding  HBK  provides  pursuant  to the  venture  agreement,  up to an
         aggregate of $25,000,000 in funding; and

2)       Six and  two-thirds  percent  (6.67%) of the shares of common stock for
         which the HBK Warrant is  exercisable  for each $2.5 million in venture
         funding HBK provides pursuant to the venture  agreement,  subsequent to
         the first $25,000,000 in funding.

The number of shares of common  stock  issuable  on  exercise of the HBK warrant
automatically  adjusts  upward on the date of  consummation  of the  Transaction
(described under New Financing).

Bridge Financing
----------------

Effective  February 12, 2008, in connection with two promissory note agreements,
the Company granted to the lenders thereunder the right, exercisable at any time
after the earlier to occur of (a) a going private  transaction,  or (b) February
12, 2009,  to purchase an  aggregate of 25% of the capital  stock of the Company
for a nominal consideration.
Issuer Purchases of Equity Securities:

Not Applicable



                                       16
<PAGE>

Item 6.  Selected Financial Data

As a smaller reporting company, this information is not required.

Item 7 - Management's Discussion and Analysis and Results of Operations

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-K.  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  headings  "Caution  Regarding
Forward-Looking Information," "Risk Factors" and elsewhere in this Form 10-K.

Business Overview:

The Company 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  mortgage  notes are secured by real estate,  are typically 90
days to 2 years  past due at the time of  purchase,  and in many cases have been
foreclosed  upon. 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 and to the current market value of the underlying
real estate.  This business model enables MAC to provide assistance to borrowers
and 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 though four 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;  (c)
foreclosing  or obtaining a  deed-in-lieu  of  foreclosure  on  properties  that
continue  to be  non-performing;  or (d)  purchasing  real  estate that has gone
through the  foreclosure  process  and then  either  renting or selling the real
estate. The Company believes that current and future market conditions signal an
increasing  rate of  foreclosures on residential  properties.  Accordingly,  the
Company anticipates increased business opportunities from this segment.

Additionally,  MAC  generates  revenue  via fees  charged to manage and  service
mortgage  notes for its joint  ventures  and other  investors.  When the Company
acquires a loan or pool of loans,  the  process of  resolution  begins  with the
borrower,  changing the status of  non-performing  loans into either  performing
loans or foreclosing on the real estate. The Company may resell a portion of its
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  financed the acquisition of its loan pools through
various  profit  participation  entities  directly with investors and by issuing
promissory  notes to  individuals  and  investment  entities.  In addition,  the
Company has historically  sustained  recurring losses from operations and had an
accumulated  stockholders'  deficit as of December 31, 2007. 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-K.



                                       17
<PAGE>

Liquidity and Capital Resources:

As of December  31,  2007,  the Company  lists cash on hand in banks of $616,288
down from the  $1,205,120  reported as of the calendar  year ended  December 31,
2006.  Total assets were $8,410,084 as of December 31, 2007, which is a decrease
of $1,143,001  from the year ended December 31, 2006. This decrease is primarily
due to the sale of pools of  mortgage  notes  sold  through  ongoing  operations
during the year,  and the fact that the assets of Dutch Fork Capital,  LLC, were
included as a consolidated entity in 2006.

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 $5,788,361 net of an impairment  reserve of $197,237 as of
December 31, 2007. This represents a decrease in portfolio  assets of $1,010,148
from  calendar  year  2006.  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 $10,230,641.

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 2007
included a total of 125  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  $3,699,869.  These
amounts  do  not  include  157  REO's  acquired  for  $7,596,067  applicable  to
unconsolidated entities.

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  $1,642,873,  net of  accumulated  depreciation  of
$148,038.

As of December 31, 2007, the Company  reported  total  liabilities of $8,337,971
including  total  current  liabilities  of  $4,856,274  and  long-term  debt  of
$3,481,697.  Minority  interests of $3,612,087 reflect 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-K.

Included in the current liabilities of $4,856,274 are $1,120,136 of non-interest
bearing loans from minority interest partners in one of the Company's investment
partnerships; a $1,000,000 advance from a principal shareholder as an advance on
the purchase of common stock in connection with the proposed recapitalization of
the Company;  and $1,518,375 of other principal  repayments of debt scheduled to
be repaid  during the next twelve  months.  Other  current  liabilities  include
$96,856 of accrued stock-based compensation which reflects the portion of earned
but  un-issued  stock-based  compensation  as of December 31, 2007;  $342,641 in
accounts payable to trade vendors and others; $74,911 in accrued fees and wages,
$262,838 in other accrued liabilities and $440,517 to be repaid to certain joint
venture partners.



                                       18
<PAGE>

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.  The balance as of
December  31,  2007,  of  $2,466,678  in  long-term  notes  payable have various
maturity  dates  beginning  in  September  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-K. As further described in Note 8
in the  Financial  Statements,  the  Company  reports the  long-term  portion of
mortgages  payable of $945,816  representing the mortgage balance due on the 999
Metromedia  property,  and a  $69,203  mortgage  balance  due for an  individual
residential property the Company currently owns and intends to sell.

The equity  section of the balance  sheet the  purchase of  additional  Series A
Preferred  Stock, the discount from the value of the preferred stock assigned to
the attached  warrants that is being  accreted back over the period in which the
preferred  stock can be  redeemed,  and the  exercise  of  warrants  to purchase
1,345,900  additional shares of common stock of the Company during the year. The
Company  has a total of  14,071,024  shares of common  stock (par value  $0.001)
issued and  outstanding  as of December 31, 2007,  with a  corresponding  common
capital stock entry of $14,071; and additional paid-in capital of $3,240,449. As
of December  31, 2007,  and as a result of the  continued  operating  losses the
Company  shows  a  retained   earnings  deficit  of  ($7,140,954)  and  a  total
stockholders'  equity deficit of  ($3,539,974)  bringing total  liabilities  and
stockholders' equity into balance at $8,410,084.

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.  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-K and previous filings.

Results of Operations:


Revenues

For the year ended  December  31, 2007,  the Company  recorded  gross  operating
revenue of $3,785,298,  an increase of $1,001,194, or 41%, compared to the gross
operating revenues of $2,784,104  reported for the year ended December 31, 2006.
This includes total sales of portfolio assets of $2,971,190; servicing fees from
affiliates  and  others  of  $189,872;  rental  income  of  $216,504;  and other
miscellaneous  income of $407,732.  The Company reports net operating revenue by
deducting the cost of portfolio assets sold from gross operating  revenues.  For
the year ended  December  31,  2007,  net  operating  revenues  were  $1,155,586
compared to net operating revenues of $1,282,259 for the year ended December 31,
2006.

Operating Expenses

The Company's total operating expenses for the year ended December 31, 2007 were
$4,574,162  compared to  $3,155,764  of total  operating  expenses in 2006.  The
increase was due to the  significant  investment  in the  infrastructure  of the
Company to support the increase  activity in portfolio  assets.  Total salaries,
wages and contract  labor  expenses for the calendar  year 2007 were  $2,323,665
compared  to  $1,313,373  in 2006.  This  increase  is driven  primarily  by the
non-cash  compensation  expense  recognized by the Company for various grants of



                                       19
<PAGE>

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-K.  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 $87,002, and a charge for bad debts expense of $196,465.

Other selling,  general and administrative  expenses for the year ended December
31,  2007 were  $1,967,030  compared  to  $1,576,767  for the year  prior.  This
increased  SG&A  expense  reflects  the  impact of  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  through 2007, the Company
has  concentrated  on building a scalable  enterprise to achieve  efficiency and
profitability as the Company  anticipates  increased growth.  Two major internal
infrastructure  build-out  projects were  continued  during 2007. 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 continued recruiting and cultivating
         its 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.  The Company  continued to invest in
         developing  this  valuable  resource by adding  additional  specialized
         staff and other  resources  including an online presence for owned real
         estate along with  additional  incentive  and fee based  services  that
         extend the Company's revenue model.
2)       Website  Technology.   During  2007  the  Company  added  REO  Listings
         Technology  to  its  website.   Adding  this  technology  is  part  our
         continuing  efforts to further develop the website,  which will further
         expand our sales channels.  Moving forward,  this technology will be an
         excellent tool as we acquire additional REO portfolios.

Despite  demonstrating  substantial growth and  diversification in the Company's
sources of revenue, the Company recorded an operating loss for the calendar year
ended  December  31, 2007,  of  ($3,418,576)  compared to an  operating  loss of
($1,833,505) for the year ended December 31, 2006.

Other Income and Expense

The Company had $10,976 in interest and other  income and a total of  ($426,618)
in interest  expense plus a loss on  retirement  of property of ($2,825) for net
total other  income and expense of  ($418,467)  for the year ended  December 31,
2007.

Net Loss

The  Company's  loss before  minority  interests of  ($3,837,042)  combined with
losses of the  minority  interests  in  subsidiaries  net  earnings of ($16,576)
resulted in a net loss of ($3,553,552)  during 2007. This compares to a net loss
of ($2,100,408)  during the year ended December 31, 2006. 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 ($0.27)  during 2007,  compared to a net loss per
share of ($0.16) during 2006.

Cash Flows:

During the twelve  months ended  December 31, 2007,  the Company  lists net cash
used by operating  activities both continuing and  discontinued of ($4,356,265).
This includes the net loss for the year of ($3,622,706)  plus total  adjustments



                                       20
<PAGE>

of  ($708,605)  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,  $1,495,924,  gains  in  minority
interests in subsidiaries' net earnings of $85,729; decrease in prepaid expenses
and other assets of  ($164,707);  and an increase in accounts  payable to trades
and  others of  $101,340.  This  includes  the  following  sources  of cash from
operating activities:  increase in depreciation,  $74,570;  increase in non-cash
stock-based  compensation,   $248,332;  decrease  in  accrued  fees  and  wages,
($107,621);  an increase in other accrued  liabilities  of $93,769.  The Company
also reported  income from  discontinued  operations of $300,066 from Dutch Fork
Capital, LLC.

During this period,  the Company reported net cash used by investing  activities
of  ($365,513)  which was the  result  of  various  purchases  of  property  and
equipment for use in operating the business.

During the twelve  months ended  December 31, 2007,  the Company  lists net cash
provided by financing  activities  of  $4,148,531.  This  includes the following
sources of cash from financing activities: the net proceeds from the issuance of
preferred stock in the amount of $500,000; the proceeds from issuance of debt to
individuals  and  others  in  the  amount  of  $2,866,678;   and  total  capital
contributions from minority interests of $2,015,802. This includes the following
uses of cash from financing  activities:  repayments of debt to individuals  and
others, ($801,072);  distributions to minority interests, $1,425,095; repayments
of mortgage loans, $21,241.

The sources and uses of cash from operating,  investing and financing activities
result in a net decrease in cash of ($588,832)  for the year ended  December 31,
2007, and results in total cash at the end of the year of $616,288.

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.

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.



                                       21
<PAGE>

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 uneconomical 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.


Item 7A - 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 8 - Financial Statements

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



                                       22
<PAGE>

Item 9 -  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 9A (T) - Disclosure Controls and Procedures

The  Company's  management,  including  the Chief  Executive  Officer  and Chief
Financial Officer, does not expect that disclosure controls or internal controls
over  financial  reporting  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.

Disclosure  Controls  and  Procedures.  As of the end of the  December  31, 2007
reporting period,  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,  management,  including the Chief Executive  Officer
and Chief Financial Officer,  believe that the Company's disclosure controls and
procedures  are designed to provide  reasonable  assurance  of  achieving  their
objectives and, based upon the  aforementioned  evaluation,  our Chief Executive
Officer and the Chief Financial Officer concluded that the Company's  disclosure
controls and procedures  were effective at that  reasonable  assurance  level in
timely alerting them to material information relating to the Company required to
be included in the Company's period SEC filings.

Changes in Internal Control Over Financial Reporting

During the fourth quarter of 2007, there was no change in the Company's internal
control over financial reporting that has materially affected,  or is reasonably
likely to materially  affect,  the  Company's  internal  control over  financial
reporting.

Management's Report on Internal Control Over Financial Reporting

The management of the Company is responsible  for  establishing  and maintaining
adequate  internal  control over  financial  reporting.  The Company's  internal
control over  financial  reporting is designed to provide  reasonable  assurance
regarding  the  reliability  of  financial  reporting  and  the  preparation  of
financial statements for external purposes in accordance with generally accepted
accounting principles.



                                       23
<PAGE>

Management conducted an evaluation of the effectiveness of the internal controls
over financial reporting based on the framework in Internal Control - Integrated
Framework  issued by the Committee of Sponsoring  Organizations  of the Treadway
Commission. Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to
financial  statement  preparation  and  presentation.  Also,  projections of any
evaluation  of  effectiveness  to future  periods  are  subject to the risk that
controls may become  inadequate  because of changes in  conditions,  or that the
degree of compliance with the policies or procedures may deteriorate.

Management  assessed the  effectiveness  of the Company's  internal control over
financial  reporting as of December 31, 2007.  Based on management's  assessment
and those criteria, management believes that the internal control over financial
reporting as of December 31, 2007 was not effective.

The Company had  ineffective  segregation  of duties  between its accounting and
check  signing  process.  This  control  deficiency  could  result  in  material
misstatements  to annual  or  interim  financial  statements  that  would not be
prevented or detected.

Remediation  to Address  Material  Weakness:  The Company  intends to  segregate
duties between signing checks and having access to the computer system.

Management's  internal  control  report was not  subject to  attestation  by the
Corporation's   independent   registered  public  accounting  firm  pursuant  to
temporary  rules of the  Securities  and  Exchange  Commission  that  permit the
Corporation to provide only management's report.

Item 9B - Other Information

Not applicable.

PART III

Item 10 - Directors, Executive Officers, and Corporate Governance

The following  table sets forth certain  information  regarding the officers and
directors of MACC and MAC:



      Name                       Age       Position and Tenure

      Ronald E. Johnson          58        Chairman, CEO, President and Director
                                           (Appointed February 9, 2007)

      Richard D. Coleman         53        CFO (Appointed March 1, 2007)

      William G. Payne           42        Director

      Rod Jones                  42        Director

      Dan Barnett                49        Director


Ronald E. Johnson, Chairman, CEO and President.
-----------------------------------------------



                                       24
<PAGE>

Mr. Johnson was appointed as the Company's Chairman, Chief Executive Officer and
President in February 2007.  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.  Mr. Johnson attended the University of South Carolina
and he also attended Francis Marion College.

Richard D. Coleman, CFO.
-----------------------

On March 1, 2007, Mr. Coleman was appointed as Senior Vice  President,  Finance,
and he was appointed as the Company's Chief Financial Officer in June 2007. From
June 2005 through February 2007, he was engaged in various financial, accounting
and management  consulting  projects.  From August 2002 through May 2005, he was
President and Chief Financial Officer of Industrial  Cleaning  Management,  LLC,
following fifteen years serving in various  financial and accounting  management
positions in the retail industry. Mr. Coleman is a graduate of the University of
Utah with a Bachelor of Science degree in Accounting.  Mr. Coleman resigned from
the Company on  February  4, 2008,  and under a  consulting  agreement  with the
Company, he continues to provide limited financial advisory services.

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.  Mr. Jones resigned as a director on March
17, 2008.

Dan Barnett, 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.

Meetings and Committees of the Board of Directors

Our business is managed under the direction of the Board of Directors. The Board
of  Directors  meets  on a  regularly  scheduled  basis  to  review  significant
developments  affecting us and to act on matters requiring approval of the Board



                                       25
<PAGE>

of Directors.  It also holds special  meetings when an important matter requires
attention or action by the Board of Directors between scheduled meetings. During
fiscal 2007,  the Board of Directors met two times.  The Board of Directors does
not have a standing audit, compensation, nominating or governance committee.

Audit Committee

The Company does not maintain a standing  Audit  Committee.  An audit  committee
typically reviews, acts on and reports to the board of directors with respect to
various  auditing and  accounting  matters,  including the  recommendations  and
performance of independent auditors,  the scope of the annual audits, fees to be
paid to the independent auditors,  and internal accounting and financial control
policies and procedures.  Certain stock exchanges currently require companies to
adopt a  formal  written  charter  that  establishes  an  audit  committee  that
specifies the scope of an audit  committee's  responsibilities  and the means by
which it  carries  out those  responsibilities.  In order to be listed on any of
these exchanges, the Company will be required to establish an audit committee.

The Company's  board of directors  does not have an "audit  committee  financial
expert," within the meaning of such phrase under  applicable  regulations of the
Securities and Exchange Commission, serving on its audit committee. The board of
directors  believes  that all  members of its audit  committee  are  financially
literate and  experienced in business  matters,  and that one or more members of
the  audit  committee  are  capable  of  (i)  understanding  generally  accepted
accounting  principles  ("GAAP") and financial  statements,  (ii)  assessing the
general  application  of GAAP  principles in connection  with our accounting for
estimates,  accruals and reserves,  (iii) analyzing and evaluating our financial
statements,   (iv)  understanding  our  internal  controls  and  procedures  for
financial  reporting;  and (v) understanding audit committee  functions,  all of
which are attributes of an audit committee financial expert.  However, the board
of  directors  believes  that  there is not any audit  committee  member who has
obtained  these  attributes  through  the  experience  specified  in  the  SEC's
definition  of "audit  committee  financial  expert."  Further,  like many small
companies,  it is difficult  for the Company to attract and retain board members
who qualify as "audit  committee  financial  experts," and competition for these
individuals is significant.  The board believes that its current audit committee
is able to  fulfill  its  role  under  SEC  regulations  despite  not  having  a
designated "audit committee financial expert."

Indebtedness of Directors and Executive Officers

None of our directors or officers or their  respective  associates or affiliates
is indebted to us.

Family Relationships

There are no family relationships among our directors or executive officers.

Compensation Committee

The Company  does not  maintain a standing  Compensation  Committee.  Due to the
Company's  small  size at this  point in time,  the Board of  Directors  has not
established  a  separate  compensation  committee.  All  members of the Board of
Directors (with the exception of any member about whom a particular compensation
decision is being made) participate in the compensation award process.

Nominating Committee

The Company does not maintain a standing Nominating  Committee and does not have
a Nominating Committee charter. Due to the Company's small size at this point in
time, the Board of Directors has not established a separate nominating committee
and feels that all directors  should have input into  nomination  decisions.  As



                                       26
<PAGE>

such,  all  members  of the  Board of  Directors  generally  participate  in the
director nomination  process.  Under the rules promulgated by the SEC, the Board
of Directors is, therefore,  treated as a "nominating  committee".  The Board of
Directors  will  consider  qualified   nominees   recommended  by  shareholders.
Shareholders   desiring  to  make  such   recommendations   should  submit  such
recommendations  to the  Corporate  Secretary,  c/o Mortgage  Assistance  Center
Corporation at 1341 W. Mockingbird Lane, Suite 1200 West,  Dallas,  Texas 75247.
The  Board  of  Directors  will  evaluate   candidates   properly   proposed  by
shareholders in the same manner as all other candidates.

The Board of Directors  has not  established  specific  minimum age,  education,
experience or skill requirements for potential directors. The Board of Directors
takes into account all factors they consider  appropriate  in  fulfilling  their
responsibilities to identify and recommend individuals as director nominees.

The Board of Directors may use multiple  sources for  identifying and evaluating
nominees for directors, including referrals from the Company's current directors
and management as well as input from third parties,  including  executive search
firms  retained by the Board of  Directors.  The Board of Directors  will obtain
background  information  about  candidates,  which may include  information from
directors' and officers' questionnaires and background and reference checks, and
will then  interview  qualified  candidates.  The Board of  Directors  will then
determine,  based on the background  information and the information obtained in
the interviews,  whether to recommend that a candidate be nominated to the Board
of Directors.  We strongly encourage and, from time to time actively survey, our
shareholders to recommend potential director candidates.

Shareholder Communications with the Company's Board of Directors

Any shareholder wishing to send written communications to the Company's Board of
Directors  may do so by  sending  them  in  care  of  Dennis  Downey,  Corporate
Secretary, at the Company's principal executive offices. All such communications
will be forwarded to the intended recipient(s).

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. On January 9, 2008, the Board of Directors adopted
an  amended  Code  of  Ethical  Conduct  which  identified  more   comprehensive
standards.  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:

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



                                       27
<PAGE>
<TABLE>
<CAPTION>

     o    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;

     o    Compliance with applicable governmental laws, rules and regulations,

     o    The prompt  internal  reporting  to an  appropriate  person or persons
          identified in the code of  violations  of our Code of Ethical  Conduct
          including  the   establishment   of  protection  for  employees  under
          "whistleblower" guidelines; and

     o    Accountability for adherence to the Code.

Item 11 - Executive Compensation

The  following  table sets  forth,  for our last  three  fiscal  years,  certain
information  concerning  the  compensation  paid  by the  Company  to our  Chief
Executive  Officer,  Chief  Financial  Officer  and our other most  highly  paid
executive  officers  who received in excess of $100,000 in  compensation  during
these periods

Except  as  described  below  under   "Employment   Contracts,"   there  are  no
compensatory  plans  or  arrangements,  with  respect  to any  of our  executive
officers,  which result or will result from the  resignation,  retirement or any
other  termination of such  individual's  employment with us or from a change in
control  of  the  Company  or a  change  in  the  individual's  responsibilities
following a change in control.




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

Ron Johnson, CEO, President     2007   $ 200,000    -        -      1,000,000     -              -            -       $ 1,200,000
Rick Coleman, CFO               2007   $ 175,000    -        -        750,000     -              -            -       $   925,000
Dale Hensel, CEO, CFO           2007   $ 135,000    -        -            -       -              -            -       $   135,000
                                2006   $  88,250    -        -        300,000     -              -            -       $   388,250
                                2005   $  56,000    -        -            -       -              -            -       $    56,000
Dan Barnett, EVP                2007   $ 135,000    -        -            -       -              -            -       $   135,000
                                2006   $  88,250    -        -        300,000     -              -            -       $   388,250
                                2005   $  53,466    -        -            -       -              -            -       $    53,466

</TABLE>



Mr.  Johnson was  appointed  as our Chief  Executive  Officer and  President  in
February 2007.

Mr. Coleman was appointed as our Chief Financial Officer in March 2007.

Mr. Hensel was removed as Chief Executive  Officer and Chief  Financial  Officer
with the appointment of Messrs Johnson and Coleman, respectively.

Dan Barnett served as our Executive Vice President until December 10, 2007.



Outstanding Equity Awards - Narrative Disclosures

1)       Incentive stock options issued to principal officers Hensel and Barnett
         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



                                       28
<PAGE>

         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. Mr. Hensel's employment agreement
         was  terminated by the Company on January 31, 2008,  and Mr.  Barnett's
         agreement  was  terminated  by the Company on December 10,  2007.  As a
         consequence  of these  terminations,  Mr.  Barnett's  options have been
         terminated and Mr. Hensel's options,  of which only 100,000 are vested,
         will  terminate on April 30, 2008,  unless  exercised  before then. All
         non-cash  compensation  expense for this  issuance will occur in future
         years pursuant to vesting.



2)       Incentive  stock  options  issued to Messrs.  Johnson and Coleman  were
         issued  market value on the date of the grant  pursuant to the terms of
         the Company's  Equity  Incentive Plan. One third of such options became
         exercisable  upon the full execution of the employment  agreement,  and
         the  remaining  two  thirds  will  become   exercisable  in  two  equal
         installments  on each of the  subsequent two  anniversary  dates of the
         employment  agreement,  provided  that such  officer is employed by the
         Company  on  each  such  anniversary  date.  A  third-party  consultant
         determined  the  fair  value  of  these  options  with  a  commercially
         available  software  product that 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.



Employment Agreements

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. Mr. Hensel's  employment  agreement was terminated by the
Company on January 31, 2008, and Mr.  Barnett's  agreement was terminated by the
Company on December 10, 2007.

Effective  as of  February  9, 2007,  the  Company  entered  into an  employment
agreement with Ron Johnson,  pursuant to which, Mr. Johnson became our Chairman,
Chief Executive  Officer and President.  Under the terms of this agreement,  Mr.
Johnson  will  receive an annual  base salary of two  hundred  thousand  dollars
($200,000)  and a cash bonus equal to fifty  percent  (50%) of his base  salary,
contingent upon the Company's  meeting or exceeding the annual  financial budget
projection  for any fiscal  year as  approved  by the Board,  in addition to any
bonuses or incentive  compensation  granted by the Board in its sole discretion.
The  employment  agreement has a term of two (2) years,  commencing  February 9,
2007,  and  automatically  renews  for  successive  one-year  periods as of each
successive  anniversary  date.  Either party may terminate the agreement upon 90
days' prior written notice,  however, should the Company terminate the agreement
without  good cause,  Mr.  Johnson is entitled to receive all  compensation  and
benefits  provided under the agreement for the remainder of the calendar year in
which the termination  occurs and for the succeeding  calendar year. Mr. Johnson
was also  granted  incentive  options  for a total of  1,000,000  shares  of the
Company's common stock under the Company's stock option plan. One third of these
incentive  options  became  exercisable  upon the full  execution of the Johnson
Employment  Agreement.  Of the  remaining  two  thirds,  one  half  will  become
exercisable on each of the subsequent  two successive  anniversary  dates of the
employment agreement.

Effective March 1, 2007, the Company  entered into an employment  agreement with
Richard  Coleman,  pursuant  to which Mr.  Coleman  became  the Chief  Financial
Officer.  The terms of Mr. Coleman's agreement are essentially the same as those



                                       29
<PAGE>
<TABLE>
<CAPTION>

in Mr.  Johnson's  agreement,  except that Mr.  Coleman's  annual  salary is one
hundred  seventy five thousand  dollars  ($175,000)  and the  incentive  options
granted  were for a total of 750,000  shares  under the  Company's  stock option
plan. Mr. Coleman  resigned from his employment  with the Company on February 4,
2008.

--------------------------------------------------------------------------------
                                  Option Awards
--------------------------------------------------------------------------------
                   Number of Securities
                  Underlying Unexercised           Equity Incentive Plan
                       Options                            Awards
--------------------------------------------------------------------------------
       Name        Number (#)     Number(#)      Number of       Number of
                  Exercisable   Unexercisable    Securities      Securities
                                                 Underlying      Underlying
                                                 Earned, but     Unexercised
                                                 Unexercised     Unearned
                                                 Options (#)     Options (#)
--------------------------------------------------------------------------------
Dale Hensel           -              -                -            100,000
--------------------------------------------------------------------------------
Dan Barnett           -              -                -            100,000
--------------------------------------------------------------------------------
Ron Johnson           -              -             333,334         666,666
--------------------------------------------------------------------------------
Rick Coleman          -              -             250,000         500,000
--------------------------------------------------------------------------------



----------------------------------------------------------------------------------------------------
                                  Stock Awards
----------------------------------------------------------------------------------------------------
                              Equity Incentive Plan
----------------------------------------------------------------------------------------------------
<S>             <C>        <C>          <C>             <C>             <C>           <C>

       Name     Option      Option      Number of       Market Value    Number of     Market or
                Exercise  Expiration    Shares or       of Shares or    Unearned      Payout Value
                Price($)    Date        Units of        Unit of         Shares or     of Unearned
                                        Stock That      Stock That      Units or      Shares or
                                        Have Not        Have Not        Other Rights  Units or Other
                                        Vested (#)      Vested          That Have     Rights That
                                                                        Not Vested    Have Not
                                                                           (#)        Vested ($)
----------------------------------------------------------------------------------------------------
Dale Hensel     $1.11     11/30/2011         -              -              -                -
----------------------------------------------------------------------------------------------------
Dan Barnett     $1.11     11/30/2011         -              -              -                -
----------------------------------------------------------------------------------------------------
Ron Johnson      0.65       2/9/2012         -              -              -                -
----------------------------------------------------------------------------------------------------
Rick Coleman     0.90       3/1/2012         -              -              -                -
----------------------------------------------------------------------------------------------------
</TABLE>

Director Compensation

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.


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



                                       30
<PAGE>

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 12 - Security  Ownership of Certain  Beneficial  Owners and  Management and
related stockholder matters

The  following  table shows as of December 31, 2007,  the shares of Common Stock
beneficially owned by all of the persons who served as the directors or officers
of the Company during 2007 as well as the principal  shareholders  (greater than
5%) of the Company  individually  and, as to the directors  and  officers,  as a
group.

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 14,071,024 shares issued and outstanding as of
December 31, 2007.  Collectively,  the  Directors and Officers with a beneficial
ownership  greater than 5%, control 88% 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%
-------------------------------------- ------------------- ---------------------



                                       31
<PAGE>


1)       Unless otherwise indicated, the business address for each person listed
         is: 1341 West Mockingbird Lane, Dallas, Texas 75247


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  13  -  Certain   Relationships  and  Related   Transactions  and  director
independence


Series A Preferred Stock Issuance
---------------------------------

On November 30, 2006,  the Company  entered into a Series A Preferred  Stock and
Common Stock Warrant  Purchase  Agreement  ("Series A 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
9,111,387 shares of the Company's common stock at an exercise price of $0.01 per
warrant share. Under the terms of the Series A Purchase Agreement, the Investors
would also purchase an additional  1,500,000  preferred shares, in increments of
500,000,  conditioned on the  satisfaction of certain  financial  benchmarks set
forth in the Series A Purchase Agreement.

Prior to this  transaction  Messrs.  Jones and  Payne  were not  members  of the
Company's Board of Directors, but became board members immediately subsequent to
this transaction.

Dutch Fork
----------

In December 2006, the Company  entered into a 50-50 joint venture with FAX/Dutch
Fork, L.P.  pursuant to which FAX/Dutch Fork provided funding to the venture for
the purpose of obtaining  distressed  real estate to be serviced by the Company.
The original  agreements  governing  the venture  provide that the Company would
receive its out of pocket expenses,  plus a pro-rata share of the profits of the
venture after  FAX/Dutch Fork received an amount equal to its invested  capital,
plus a  preferred  return.  Effective  May 17,  2007 the  Company  sold its half
interest in the joint venture to FAX/Dutch Fork for $300,000; and as a condition
of the sale, the Company  agreed to continue to service the portfolio  assets in
the joint  venture  and provide  accounting  and  administrative  services at no
charge to Dutch Fork.

Messrs.  Payne and Jones have an indirect  ownership interest in FAX/Dutch Fork,
L.P.

Subsequent Funding by Series A Investors
----------------------------------------

During April 2007,  despite not achieving its  benchmarks for the first quarter,
the Company received the first of the three  subsequent  tranches of $500,000 in
cash as  contemplated by the November 30, 2006 financing  transaction.  However,
the Company did not achieve its benchmarks for the subsequent  periods,  and the
Investors  advised the Company that they did not intend to fund further tranches
under the Series A Purchase Agreement.

In August 2007,  after subsequent  discussions  with the Investors,  the Company
received a proposal from the Investors  with respect to an equity  investment of
$1,000,000  in exchange  for the  issuance of  267,347,556  new shares of common



                                       32
<PAGE>

stock, which would represent  approximately 95% of the outstanding shares of our
common stock (the "Transaction").  Effective September 2007, the Company entered
into an  agreement  with the  Investors  with  respect to the  Transaction.  The
agreement  was  structured as an amendment to the Purchase  Agreement  described
above. The Investors advanced the $1,000,000  purchase price for the 267,347,556
shares of common  stock in two separate  tranches of $500,000,  one of which was
paid to the  Company in August,  2007,  prior to the entry by the parties of the
definitive  agreement,  and the  second  of  which  was paid to the  Company  in
October,  2007.  The  issuance of the shares to the  Investors  is subject to an
amendment to the Company's  Articles of  Incorporation  increasing the Company's
authorized shares.

Mr. Payne is the Managing Member of W.C. Payne Investments, L.L.C. and Mr. Jones
is a limited  partner in FAX/MACC,  L.P., and the Managing Member of FAX GenPar,
LLC,  which is the General  Partner of Family Access  Exchange II, L.P, which is
the  General  Partner of  FAX/MACC,  L.P.  As a result of the Series A Preferred
Stock sale described  above, at the time the Company  received the proposal from
the  Investors,  Mr.  Payne  was,  through  his  relationship  with  W.C.  Payne
Investments, deemed to hold 448,600 shares of common stock, warrants to purchase
an additional  3,489,283 shares of common stock at an exercise price of $.01 per
share;  and  666,667  shares  of  Series A Stock;  and Mr.  Jones,  through  his
relationship  with  FAX/MAC was deemed to hold 897,200  shares of common  stock,
warrants  to  purchase  an  additional  6,978,566  shares of common  stock at an
exercise price of $.01 per share and 1,333,333 shares of Series A Stock.

Bridge Funding
--------------

Effective  February 12, 2008, the Company entered into two agreements (the "Note
Agreements")  pursuant  to which the Company  may borrow up to an  aggregate  of
$600,000  (the  "Funding  Commitment")  through one or more  advances.  The Note
Agreements  provide that the Company may, from time to time, request advances up
to the Funding Commitment;  provided,  among other things, that (a) no more than
two  advances may be requested  during any  calendar  month,  and (b) no advance
shall be less than $25,000. The first advances under the Note Agreements,  in an
aggregate amount of $300,000, were received by the Company on February 12, 2008.

Amounts  outstanding  under the Note  Agreements  bear  interest  at the rate of
fifteen percent per annum,  compounded  monthly.  All outstanding  principal and
accrued interest on advances is due and payable on demand. Repayment of advances
under the Note  Agreements  is  secured by a pledge of the  membership  or other
equity  interests  held by the Company in various joint  ventures  formed by the
Company  for the purpose of  acquiring  and holding  portfolios  of  distressed,
single-family real estate and non-performing mortgages that the Company manages.

In connection with the Note  Agreements,  the Company has granted to each lender
thereunder, the right, exercisable at any time after the earlier to occur of (a)
a going private transaction,  or (b) February 12, 2009, to purchase 12.5% of the
capital stock of the Company for a nominal consideration (an "Option").

CSSF Master Fund, LP, one of the lenders under the Notes  Agreements,  is also a
member in Canyon Ferry Capital LLC, a joint venture  previously  established  by
the  Company's  subsidiary,   Mortgage  Assistance  Corporation,  to  acquire  a
portfolio  of real  estate  properties.  MAC is a member of this joint  venture,
serves as its manager and  services the real estate  portfolio.  Pursuant to the
terms  governing this joint venture,  MAC receives a share in the profits of the
joint  venture  once its  venture  partners  have  received  the amount of their
capital contribution to the venture, plus a preferred return on such capital.

Mr. Payne is an employee of the investment advisor for CSSF Master Fund. In such
capacity,  Mr. Payne may receive bonus compensation from this investment advisor
based on the performance of CSSF Master Fund.



                                       33
<PAGE>

Currently, none of our directors is independent,  as defined by Rule 4200(a)(15)
of the Nasdaq's listing standards.

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
                                      December 31, 2007        December 31, 2006
             --------------------- ------------------------ --------------------
                       Audit Fees          65,137                    58,831
             --------------------- ------------------------ --------------------
                         Tax Fees           4,160                     5,070
             --------------------- ------------------------ --------------------
                   All Other Fees           6,174                        --
             --------------------- ------------------------ --------------------

             --------------------- ------------------------ --------------------
                       Total Fees         $75,471                   $63,901
             --------------------- ------------------------ --------------------

Audit Committee Pre-Approval Policies and Procedures

The Company does not currently have and Audit Committee. Currently, the Board of
Directors pre-approves all audit and non-audit services that are to be performed
and fees to be charged by our  independent  auditor or assure that the provision
of these services does not impair the independence of such auditor. The Board of
Directors  pre-approved  all audit services and fees of our independent  auditor
for the years ended December 31, 2007 and 2006. Our independent auditors did not
provide us with any non-audited services during the period indicated above.

Sutton, Robinson Freeman & Co. was engaged for the full year 2007. 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.



















                                       34
<PAGE>


         Item 15 - Exhibits, Financial Statement Schedules

                  Exhibits
                  --------


         3(i)       Certificate of Incorporation  of  the Company  (Incorporated
                    by reference from the  Company's  Registration  Statement on
                    Form 10-KSB filed  December 31, 1996).

         3(i).1     Articles of Amendment filed November 16, 2004  (Incorporated
                    by reference from report filed on November 23, 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  Incorporated  by  reference  from   the
                    Company's  Form  10-QSB for the quarterly  period ended June
                    30, 2001.

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

         3(i).4     Articles of Amendment  filed January 17, 2005  (Incorporated
                    by reference from report on January 17, 2005)

         3(ii)      By-Laws  of the Company  (Incorporated by reference from the
                    Company's  Registration  Statement  on  Form  10-KSB   filed
                    December 31, 1996)

         4          Copy of specimen  certificate  representing shares of Common
                    Stock,   $.0001  par  value  per  share,   of  the   Company
                    (Incorporated  by reference from the Company's  Registration
                    Statement on Form 10-KSB filed December 31, 1996)

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

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

         10.3       Employment  Agreement  dated as of February 9, 2007,  by and
                    between  Ron  Johnson  and  the  Company   (Incorporated  by
                    reference to the Company's Form 8-K filed February 15, 2007)

         10.4       Employment  Agreement  dated  as of March  1,  2007,  by and
                    between Rick Coleman and the Company*

         10.5       Employment  Agreement  dated as of November 30, 2006, by and
                    between  Dan  Barnett  and  the  Company*  (Incorporated  by
                    reference to the Company's Form 8-K filed December 6, 2007)

         10.6       Employment  Agreement  dated as of November 30, 2006, by and
                    between  Dale  Hensel  and the  Company *  (Incorporated  by
                    reference to the Company's Form 8-K filed December 6, 2007)

         10.7       Funding  Commitment  Agreement  dated as of October 2007, by
                    and between Mortgage  Assistance Center  Corporation and Bob
                    Mangold (Incorporated by reference to the Company's Form 8-K
                    filed November 29, 2007)

         10.8       Amendment and Agreement  dated as of September  2007, by and
                    among  Mortgage   Assistance  Center   Corporation  and  the
                    investors  listed therein  (Incorporated by reference to the
                    Company's Form 8-K filed November 29, 2007)

         10.9       Venture  Funding  Agreement dated as of October 22, 2007, by
                    and among Mortgage Assistance Center  Corporation,  Mortgage
                    Assistance  Corporation and HBK Fund MS LLC (Incorporated by
                    reference to the Company's Form 8-K filed November 29, 2007)



                                       35
<PAGE>


         10.10      Modification  Agreement dated as of October 19, 2007, by and
                    among  Mortgage  Assistance  Corporation,  MAP/MAC,  LLC and
                    Mortgage  Acquisition  Partners,  L.L.C.   (Incorporated  by
                    reference to the Company's Form 8-K filed November 29, 2007)

         10.11      Promissory  Note dated  February 12, 2008  (Incorporated  by
                    reference to the Company's Form 8-K filed March 7, 2008)

         10.12      Promissory  Note dated  February 12, 2008  (Incorporated  by
                    reference to the Company's Form 8-K filed March 7, 2008)

          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*

         *  Filed herewith



         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

         *****      Incorporated  by reference to the  Company's  Form 8-K filed
                    November 29, 2007

         ******     Incorporated  by reference to the  Company's  Form 8-K filed
                    March 7, 2008

















                                       36
<PAGE>







                     MORTGAGE ASSISTANCE CENTER CORPORATION






                        CONSOLIDATED FINANCIAL STATEMENTS



                                       AND



                        REPORT OF INDEPENDENT REGISTERED
                             PUBLIC ACCOUNTING FIRM



                           DECEMBER 31, 2007 AND 2006












<PAGE>





































                                             SUTTON ROBINSON FREEMAN & CO., P.C.

<PAGE>




                     Mortgage Assistance Center Corporation






                                Table of Contents





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

   Financial Statements
        Consolidated Balance Sheets as of December 31, 2007 and 2006.........F-4

        Consolidated Statements of Operations and Comprehensive Loss
              or the years ended December 31, 2007 and 2006..................F-6

        Consolidated Statements of Changes in Stockholders' Equity
              (Deficit) for the years ended December 31, 2007 and 2006 ......F-8

        Consolidated Statements of Cash Flows
              for the years  ended December 31, 2007 and 2006................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, 2007
and 2006,  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.  An  audit  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,  2007  and  2006,  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.

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,  2007.  These  circumstances  create  substantial  doubt about the
Company's  ability to continue as a going  concern and are  discussed in Note 3.
Management's  plans in regard to these matters are also described in Note 3. The
financial  statements do not contain any adjustments  that might result from the
outcome of these uncertainties.

We were not engaged to examine management's assertion about the effectiveness of
Mortgage  Assistance  Center  Corporation's  internal  controls  over  financial
reporting  as of December  31, 2007  included in the  accompanying  Management's
Report on Internal Control over Financial Reporting and, accordingly,  we do not
express an opinion thereon.

         /s/ Sutton Robinson Freeman & Co., P.C.
         ---------------------------------------



                                      F-2
<PAGE>

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

         Tulsa, Oklahoma
         April 7, 2008




                                      F-3
<PAGE>



                     Mortgage Assistance Center Corporation
                           Consolidated Balance Sheets
                           December 31, 2007 and 2006


                                      ASSETS
                                                       December 31, December 31,
                                                          2007          2006
                                                       ----------    ----------
    Current Assets:
Cash and cash equivalents                              $  616,288    $1,205,120
Portfolio assets, at cost (net of impairment reserve
   of $197,237 and $253,509 at December 31, 2007 and
   December 31, 2006, respectively)                     5,788,361     6,798,509
Prepaid expenses and other current assets                 337,158       194,405
                                                       ----------    ----------

Total Current Assets                                    6,741,807     8,198,034

                                                       ----------    ----------
Property and Equipment, at cost:
Land                                                      699,600       699,600
Building and improvements                                 668,840       606,799
Office furniture and equipment                            422,471       118,670
                                                       ----------    ----------
                                                        1,790,911     1,425,069

Less accumulated depreciation                             148,038        73,468
                                                       ----------    ----------

Net Property and Equipment                              1,642,873     1,351,601

                                                       ----------    ----------
Investments and Other Assets:
Deposits                                                   25,404         3,450
                                                       ----------    ----------


Total Assets                                           $8,410,084    $9,553,085
                                                       ==========    ==========








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




                                      F-4
<PAGE>
<TABLE>
<CAPTION>



                     Mortgage Assistance Center Corporation
          Consolidated Statements of Operations and Comprehensive Loss
                     Years Ended December 31, 2007 and 2006



                      LIABILITIES AND STOCKHOLDERS' EQUITY
                                                                                December 31,   December 31,
                                                                                    2007      2006 (Restated)
                                                                                -----------    -----------
<S>                                                                             <C>            <C>

      Current Liabilities:                                                      $ 2,614,011    $ 1,52,315
      Notes payable-individuals and others                                        1,000,000           --
      Advance from stockholders                                                      24,500         24,400
      Current portion of mortgages payable                                          342,641        241,301
      Accounts payable                                                              440,517           --
      Settlement costs                                                               74,911        182,532
      Accrued fees and wages                                                        359,694        265,015
      Other accrued liabilities                                                 -----------    -----------

                                                                                  4,856,274      2,235,563
      Total Current Liabilities                                                 -----------    -----------

      Long-term Debt:                                                             2,466,678      1,492,768
      Notes payable-individuals and others                                        1,015,019      1,036,360
      Mortgages payable, less current portion                                   -----------    -----------

                                                                                  3,481,697      2,529,128
      Total Long-Term Debt                                                      -----------    -----------

                                                                                  8,337,971      4,764,691
      Total Liabilities                                                         -----------    -----------

                                                                                  3,612,087      5,466,543
      Minority Interests                                                        -----------    -----------


      Stockholders' Equity  (Deficit):
      Series A convertible  preferred stock ($0.001 par value;  3,000,000 shares
      authorized;   2,000,000  and  1,500,000  shares  issued  and  outstanding;
      aggregate liquidation preference of $2,000,000 and $1,500,000;  cumulative
      undeclared dividends of $207,962 and $12,500 respectively at                  867,828        176,476
      December 31, 2007 and December 31, 2006)

      Common stock ($0.001 par value,  50,000,000 shares authorized,  14,071,024
      and 12,725,124 shares issued and outstanding at December 31, 2007 and          14,071         12,726
      December 31, 2006, respectively)                                            2,374,621      2,306,437
      Additional paid-in capital                                                 (7,140,954)    (3,518,248)
      Retained earnings (deficit) after December 31, 2004                       -----------    -----------
                                                                                 (3,884,434)    (1,022,609)
                                                                                    344,460        344,460
      Subscriptions issuable                                                    -----------    -----------
                                                                                 (3,539,974)      (678,149)
      Total Stockholders' Equity (deficit)                                      -----------    -----------

                                                                                $ 8,410,084    $ 9,553,085
      Total Liabilities and Stockholders' Equity                                ===========    ===========

</TABLE>


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


                                      F-5
<PAGE>



                     MORTGAGE ASSISTANCE CENTER CORPORATION

         Amended Statements of Changes in Stockholders' Equity (Deficit)

                     Years Ended December 31, 2007 and 2006



                                                December 31,   December 31,
                                                   2007           2006
                                                -----------    -----------
    Operating Revenues:
 Sales of portfolio assets                      $ 2,971,190    $ 2,054,114
 Servicing fees                                     189,872        210,635
 Rental income                                      216,504        134,550
 Other                                              407,732        384,805
                                                -----------    -----------
    Gross operating revenues                      3,785,298      2,784,104
 Cost of portfolio assets sold                    2,629,712      1,501,845
                                                -----------    -----------
    Net operating revenues                        1,155,586      1,282,259
                                                -----------    -----------

Operating Expenses:
 Salaries, wages and contract labor               2,323,665      1,313,373
 Selling, general and administrative expenses     1,967,030      1,576,767
 Depreciation and amortization                       87,002         43,181
 Bad debts                                          196,465        182,443
                                                -----------    -----------
    Total operating expenses                      4,574,162      3,115,764
                                                -----------    -----------

Operating loss                                   (3,418,576)    (1,833,505)
                                                -----------    -----------

Other income (expense):
 Interest and other income                           10,976        131,739
 Interest expense                                  (426,618)      (398,642)
 Priority payments                                     --             --
 Loss on retirement of property                      (2,825)          --
                                                -----------    -----------

    Total other income (expense)                   (418,467)      (266,903)
                                                -----------    -----------

Loss from continuing operations before
    minority interests and income taxes          (3,837,043)    (2,100,408)



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




                                      F-6
<PAGE>
<TABLE>
<CAPTION>

                     Mortgage Assistance Center Corporation
                      Consolidated Statements of Cash Flows
                     Years Ended December 31, 2007 and 2006


                                                        December 31,    December 31,
                                                            2007            2006
                                                        ------------    ------------
<S>                                                     <C>             <C>

    Loss from continuing operations before
    minority interests and income taxes                 $ (3,837,043)   $ (2,100,408)

Minority interests                                           (85,729)         90,233
                                                        c

Loss from continuing operations before
    income taxes                                          (3,922,772)     (2,010,175)

Income tax benefit (expense)                                    --              --
                                                        ------------    ------------

Loss from continuing operations                           (3,922,772)     (2,010,175)

Discontinued operations:
 Income from Operations of Dutch Fork Capital LLC
    (Including a gain on disposal of $160,128)               300,066            --
                                                        ------------    ------------

Net Loss                                                  (3,622,706)     (2,010,175)
                                                        ------------    ------------

Other comprehensive income                                      --              --

Comprehensive Loss                                      $ (3,622,706)   $ (2,010,175)
                                                        ============    ============

Basic and fully diluted  earnings (loss) per weighted
 average common shares outstanding:
    Continuing operations                               $      (0.29)   $      (0.16)
    Discontinued operations                             $       0.02            --
                                                        ============    ============
    Net Loss                                            $      (0.27)   $      (0.16)


Weighted-average number of common stock outstanding:
    Basic                                                 13,245,047      12,725,124
                                                        ============    ============
    Fully diluted                                               --              --
                                                        ============    ============

</TABLE>



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




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



                     Mortgage Assistance Center Corporation
                      Consolidated Statements of Cash Flows
                     Years Ended December 31, 2007 and 2006

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

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

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

Issuance of preferred stock with warrants
               net of issuance costs of $86,985
       preferred stock @ 0.001 par value per share       160,530          --            --            --             --
       common stock warrants                                --            --            --       1,252,485           --

Deemed dividend (accretion of discount)
       on preferred stock                                 15,946          --            --         (15,946)          --

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

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

Balances
       December 31, 2006                             $   176,476    12,725,124   $    12,726   $ 2,306,437    $(3,518,248)

Issuance of preferred stock @ $0.001 par value
       per share                                         500,000          --            --            --             --

Exercise of common stock warrants                           --       1,345,900         1,345        12,114           --

Deemed dividend (accretion of discount)
       on preferred stock                                191,352          --            --        (191,352)          --

Stock based compensation expense                            --            --            --         247,422           --

Net loss for the year                                       --            --            --            --       (3,622,706)
                                                     -----------   -----------   -----------   -----------    -----------

Balances
       December 31, 2007                             $   867,828    14,071,024   $    14,071   $ 2,374,621    $(7,140,954)


</TABLE>


                                                      Subscriptions
                                                        issuable       Total
                                                      -----------   -----------
Balances
       December 31, 2005                              $   102,160   $(1,219,524)

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

Issuance of preferred stock with warrants
               net of issuance costs of $86,985
       preferred stock @ 0.001 par value per share           --         160,530
       common stock warrants                                 --       1,252,485

Deemed dividend (accretion of discount)
       on preferred stock                                    --            --

Stock-based compensation expense                             --         896,235

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

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

Issuance of preferred stock @ $0.001 par value
       per share                                             --         500,000

Exercise of common stock warrants                            --          13,459

Deemed dividend (accretion of discount)
       on preferred stock                                    --            --

Stock based compensation expense                             --         247,422

Net loss for the year                                        --      (3,622,706)
                                                      -----------   -----------

Balances
       December 31, 2007                              $   344,460   $(3,539,974)


              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 Flows
                     Years Ended December 31, 2007 and 2006


                                                            December 31,   December 31,
                                                               2007           2006
                                                            -----------    -----------
<S>                                                         <C>            <C>

  Cash Flows From Operating Activities
Net loss                                                    $(3,622,706)   $(2,010,175)
Result from discontinued operations                            (300,066)          --
                                                            -----------    -----------
Loss from continuing operations                              (3,922,772)    (2,010,175)
                                                            ===========    ===========
Adjustments  to reconcile  net loss to net
cash  provided (used) by operating activities:
Depreciation                                                     87,002         43,181
Non-cash stock-based compensation                               247,422        896,235
Minority interests in subsidiaries' net earnings (losses)        85,729        (90,233)
Loss on sale of assets                                            2,825           --
Change in assets and liabilities:
Decrease in portfolio assets                                 (1,495,923)    (5,090,456)
Increase in accounts receivable from related parties               --           58,995
Increase in prepaid expenses and other assets                  (164,574)      (161,310)
Increase in accounts payable                                    101,340       (225,888)
Increase in settlement costs                                    440,517           --
Decrease in accrued fees and wages                             (107,621)       168,857
Increase in other accrued liabilities                            94,679        150,451
                                                            -----------    -----------

Total adjustments                                              (708,604)    (4,250,168)
                                                            -----------    -----------

               Net Cash Used by Operating Activities         (4,631,376)    (6,260,343)
                                                            -----------    -----------

Cash Flows From Investing Activities

Additions to property and equipment                            (381,099)       (57,438)
                                                            -----------    -----------

                  Net Cash Used by Investing Activities        (381,099)       (57,438)
                                                            -----------    -----------

</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 Flows
                     Years Ended December 31, 2007 and 2006





                                                           December 31,   December 31,
                                                               2007          2006
                                                           -----------    -----------
<S>                                                        <C>            <C>

   Cash Flows From Financing Activities
Proceeds from issuance of debt to individuals and others   $ 2,866,678    $ 1,793,000
Repayments of debt to individuals and others                  (801,072)    (1,075,997)
Net proceeds from issuance of preferred stock                  500,000           --
Proceeds from issuance of common stock                          13,459      1,413,015
Capital contributions from minority interests                2,015,802      5,101,546
Refunds of capital contributions to minority interests      (1,340,168)          --
Distributions to minority interests                            (84,927)      (236,223)
Net advances from (repayments to) stockholder                1,000,000        (60,574)
Repayments of mortgage loans                                   (21,241)       (10,844)
                                                           -----------    -----------

Net Cash Provided by Financing Activities                    4,148,531      6,923,923
                                                           -----------    -----------

Net Cash Provided by Discontinued Operations                   275,112           --
                                                           -----------    -----------

Net Increase (Decrease) in Cash                               (588,832)       606,142

Cash at Beginning of Period                                  1,205,120        598,978
                                                           -----------    -----------

Cash at End of Period                                      $   616,288    $ 1,205,120
                                                           ===========    ===========

Supplemental Disclosures of Cash Flow Information

Cash Paid During the Year for:
Interest                                                   $   365,513    $   334,038
Prior payments                                                    --             --

</TABLE>


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



                                      F-10
<PAGE>


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. The Company  completed an initial public offering in 1978
of its common stock in Florida. The Company has also operated under the names of
Portsmouth Corporation,  SAC-Delaware and Environmental Alternatives,  Inc. From
July 1, 2002 to May 2005 the Company had no assets or operating activities.

The  Company  changed its name on May 14,  2004 to  Mortgage  Assistance  Center
Corporation. The change was 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 and MAC became a wholly owned subsidiary of MACC.

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  and  real  estate
acquired by foreclosures of mortgage notes. 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 resells a substantial  portion of its loans in various-sized  pools,
or it forecloses when loans held in its portfolio continue to be in default.  As
a result,  the  Company  may be engaged in owning  single-family  dwellings  and
possibly other real estate.  Such foreclosed real estate is 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  and its  wholly  owned  subsidiary,  MAC.  All  significant
intercompany accounts and transactions are eliminated in consolidation.

The Company through its subsidiary,  MAC, has a 50% ownership  interest in eight
unincorporated  joint  ventures  and acts as the manager of each venture and, as
such,  exercises  control over each  venture.  The other  members of each of the
ventures do not have either (a) the substantive  ability to dissolve the venture
or otherwise remove the manager without cause, or (b)



                                      F-12
<PAGE>

Note 2 - Summary of Significant Accounting Policies (continued)
---------------------------------------------------------------

Principles of Consolidation and Basis of Presentation: (continued)

substantive participating rights. Based on these factors, MAC's interest in each
of the joint ventures meets the criteria for consolidation  under the provisions
of  Emerging  Issues Tax 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 these  unincorporated  entities,  with the ownership
interests  of minority  investors  recorded in a noncurrent  caption,  "Minority
Interests."  On May 17, 2007, MAC sold its 50% interest in the future profits of
Dutch Fork Capital,  LLC ("Dutch Fork") to the other 50% partner in that venture
for $300,000 cash. Two of MACC's directors have indirect ownership  interests in
Dutch  Fork.  At December  31,  2007,  and for the year then  ended,  all of the
assets,  liabilities and applicable minority interests have been eliminated, and
the results of  operations  have been  classified  as  Discontinued  Operations.
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 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 represent 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 and is charged to operations in the period the impairment
is  identified.  Accordingly,  the Company  recorded an impairment  allowance of
$197,237   and  $253,509  as  of  December  31,  2007  and  December  31,  2006,
respectively.

The Company  recognizes gain or loss on the sale or other resolution of mortgage
loans pools based on the  difference  between the net sale proceeds and the cost
basis of the individual loans



                                      F-13
<PAGE>

Note 2 - Summary of Significant Accounting Policies (continued)
---------------------------------------------------------------

  Mortgage Note Receivable Pools: (continued)

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 follows the provisions of Statement of Position No. 03-3, Accounting
for Certain Loans or Debt Securities Acquired in a Transfer ("SOP 03-3"),  which
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  have been
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.  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 capitalized. Income or loss is recognized on 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 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, 2007 and December 31, 2006.

Other Revenue Recognition Policies:

  Servicing fees:

Servicing fees are charged to the portfolio asset pools for services provided by
the Company (property  management,  legal,  administrative) in order to maximize
the value of the assets in the portfolio. Income is recorded as the services are
performed, in accordance with the terms of the service agreements.



                                      F-14
<PAGE>


Note 2- Summary of Significant Accounting Policies (continued)
--------------------------------------------------------------

  Rental Income:

The  Company,  through one of its 50% owned joint  ventures,  owns a  commercial
building in Dallas, Texas that it leases.  Rental income is accrued on a monthly
basis in accordance with the terms of the lease agreement.

 Other income:

Other  operating  income  primarily  consists of fees received  from  individual
investors,  joint venture partners,  or third party entities for identifying and
acquiring asset pools as well as the  reimbursement  of certain costs associated
therewith,  and are recorded at the time the acquired  pools are  transferred to
the investors.

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 values thereof are capitalized.

Share-Based Compensation:

Prior to  January 1, 2006,  the  Company  accounted  for  stock-based  awards to
employees and  non-management  directors  under the  recognition and measurement
provisions of Accounting  Principles Board (APB) Opinion No. 25, "Accounting for
Stock  Issued to  Employees,"  and  related  interpretations,  as  permitted  by
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation"  (SFAS  No.  123).  Compensation  cost for stock  options  was not
recognized in the  Consolidated  Statement of Income for the years prior to 2006
as all options granted had an



                                      F-15
<PAGE>

Note 2- Summary of Significant Accounting Policies (continued)
--------------------------------------------------------------

Share-Based Compensation: (continued)

exercise price equal to the market value of the  underlying  common stock on the
date of the grant.  Prior to January 1, 2006,  compensation  cost was recognized
for restricted stock units.  Effective  January 1, 2006, the Company adopted the
fair value recognition provisions of Statement of Financial Accounting Standards
No. 123(R), "Share-Based Payment", using the modified-prospective  method. Under
this method,  compensation cost recognized in periods subsequent to December 31,
2005,  includes:  (1)  compensation  cost for all share-based  payments  granted
through  December 31, 2005,  but for which the requisite  service period had not
been  completed  as of  December  31,  2005,  based on the grant date fair value
estimated  in  accordance   with  the  provisions  of  SFAS  No.  123,  and  (2)
compensation cost for most share-based  payments granted  subsequent to December
31, 2005,  based on the grant date fair value  estimated in accordance  with the
provisions   of  SFAS  No.   123(R).   The   performance   targets  for  certain
performance-based restricted stock units have not been established and therefore
expense   is  not   currently   recognized.   Expense   associated   with  these
performance-based  awards will be recognized in future periods when  performance
targets are established. Results for prior periods have not been restated.

Total  stock-based  compensation  expense for the years ending December 31, 2007
and 2006, was $247,422 and $896,235, respectively.

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.

Management's  judgment  and income tax  assumptions  are used to  determine  the
levels, if any, of valuation allowances associated with deferred tax assets.



                                      F-16
<PAGE>

Note 2- Summary of Significant Accounting Policies (continued)
--------------------------------------------------------------

Income Taxes: (continued)

Effective  January 1, 2007,  the Company  adopted the  provisions  of  Financial
Interpretation  No. 48 ("FIN 48"). FIN 48 prescribes  guidance for the financial
statement  recognition and measurement of a tax position taken or expected to be
taken in a tax return.  To recognize a tax position,  the enterprise  determines
whether it is more likely than not that the tax position will be sustained  upon
examination,   including   resolution  of  any  related  appeals  or  litigation
processes,  based on the technical  merits of the position.  A tax position that
meets the more likely than not  recognition  threshold  is measured to determine
the amount of benefit to recognize in the financial statements. The tax position
is  measured  as the  largest  amount of  benefit,  determined  on a  cumulative
probability basis, that is greater than 50 percent likely of being realized upon
ultimate settlement. The adoption of this Interpretation did not have any impact
on the Company's financial position or results of operations, as the Company did
not have any uncertain tax positions at December 31, 2007.

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 and issuable
restricted stock units.

Diluted  net income  (loss) per  common  share is based on the  weighted-average
outstanding  shares  adjusted for the dilutive effect of options and warrants to
purchase  common  stock,   nonvested  restricted  stock  units  and  convertible
debentures.  Due to the Company's losses,  such potentially  dilutive securities
are anti dilutive for the years ended  December 31, 2007 and 2006.  The weighted
average  number  of  potentially   fully  dilutive  shares  was  28,386,131  and
19,333,934 for the years ended December 31, 2007 and 2006, respectively.

Note 3 - 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
2007 and prior years,  resulting in an accumulated  stockholders'  deficit as of
December 31, 2007.  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



                                      F-17
<PAGE>

Note 3 - Going Concern Uncertainty (continued)
----------------------------------------------

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 continues to actively pursue 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 working capital.  In addition,  the Company continues to
explore  opportunities to secure additional  sources of debt or other financings
as a means of more  cost  effectively  acquiring  pools of  mortgage  notes  and
foreclosed  properties.  However,  there is no  guarantee  that the Company will
receive  sufficient  funding to sustain  operations  and/or implement any future
business plans.

Note 4 - Recent Accounting Pronouncements
-----------------------------------------

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.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS
No. 157). This Statement  establishes a framework for fair value measurements in
the  financial  statements  by  providing a definition  of fair value,  provides
guidance on the  methods  used to  estimate  fair value and expands  disclosures
about  fair  value  measurements.  SFAS No. 157 is  effective  for fiscal  years
beginning  after November 15, 2007. In February 2008, the FASB issued FASB Staff
Position (FSP) No. FAS 157-2,  permitting  entities to delay application of SFAS
No. 157 to fiscal  years  beginning  after  November  15, 2008 for  nonfinancial
assets and  nonfinancial  liabilities,  except for items that are  recognized or
disclosed at fair value in the  financial  statements  on a recurring  basis (at
least annually).  SFAS No. 157 requires two distinct transition approaches;  (i)
cumulative-effect   adjustment  to  beginning   retained  earnings  for  certain
financial  instrument  transactions  and  (ii)  prospectively  as of the date of
adoption  through earnings or other  comprehensive  income,  as applicable.  The
Company  did  not  have  financial  instrument   transactions  that  required  a
cumulative-effect adjustment to beginning retained earnings upon the adoption of
SFAS No. 157.  Beginning  January 1, 2009,  the Company  will apply SFAS No. 157
fair value requirements to nonfinancial assets and nonfinancial liabilities that
are not  recognized  or  disclosed  on a recurring  basis.  SFAS No. 157 expands
disclosures  about assets and liabilities  measured at fair value on a recurring
basis effective beginning with first-quarter 2008 reporting.



                                      F-18
<PAGE>


Note 4 - Recent Accounting Pronouncements (continued)
-----------------------------------------------------

In February  2007,  the FASB issued  SFAS No.  159,  "The Fair Value  Option for
Financial  Assets and  Financial  Liabilities  -- Including an Amendment of FASB
Statement No. 115" (SFAS No. 159).  SFAS No. 159 establishes a fair value option
permitting  entities  to elect to measure  eligible  financial  instruments  and
certain  other  items at fair  value.  Unrealized  gains and losses on items for
which the fair value option has been  elected will be reported in earnings.  The
fair  value  option  may be applied  on an  instrument-by-instrument  basis,  is
irrevocable and is applied to the entire  instrument.  SFAS No. 159 is effective
as of the beginning of the first fiscal year beginning  after November 15, 2007,
and should not be applied retrospectively to fiscal years beginning prior to the
effective  date. On the adoption date, an entity may elect the fair value option
for  eligible  items  existing at that date and the  adjustment  for the initial
remeasurement  of those items to fair value  should be reported as a  cumulative
effect  adjustment to the opening  balance of retained  earnings.  Subsequent to
January 1,  2008,  the fair value  option can only be elected  when a  financial
instrument or certain other item is entered into. On

January  1,  2008,  the  Company  did not elect the fair  value  option  for any
existing eligible financial instruments or certain other items.

In June 2007, the FASB ratified EITF Issue No. 06-11  "Accounting for Income Tax
Benefits of Dividends on Share-Based  Payment  Awards" (EITF 06-11).  EITF 06-11
requires  that the  income  tax  benefits  received  on  dividends  or  dividend
equivalents  paid to employees  holding  equity-classified  nonvested  shares be
recorded  as  additional   paid-in   capital  when  the  dividends  or  dividend
equivalents are charged to retained earnings  pursuant to SFAS No. 123(R).  This
EITF is applied  prospectively and is effective for fiscal years beginning after
December 15, 2007, and interim  periods within those years.  EITF 06-11 requires
the  disclosure  of any change in  accounting  policy for income tax benefits of
dividends or dividend  equivalents on share-based  payment awards as a result of
adoption.  The Company began applying the provisions of EITF 06-11 on January 1,
2008 with no material impact on its consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141(R) "Business  Combinations" (SFAS
No.  141(R)).   SFAS  No.  141(R)  applies  to  all  business  combinations  and
establishes guidance for recognizing and measuring identifiable assets acquired,
liabilities assumed, noncontrolling interests in the acquiree and goodwill. Most
of these items are recognized at their full fair value on the acquisition  date,
including  acquisitions  where the  acquirer  obtains  control but less than 100
percent  ownership in the acquiree.  SFAS No. 141(R) also requires  expensing of
transaction costs as incurred and establishes disclosure  requirements to enable
the evaluation of the nature and financial effects of the business  combination.
SFAS No. 141(R) is effective for business  combinations with an acquisition date
in fiscal years beginning after December 15, 2008.

In December  2007,  the FASB issued SFAS No. 160  "Noncontrolling  Interests  in
Consolidated  Financial  Statements  --  an  amendment  of  Accounting  Research
Bulletin  No.  51" (SFAS No.  160).  SFAS No.  160  establishes  accounting  and
reporting standards for



                                      F-19
<PAGE>


Note 4 - Recent Accounting Pronouncements (continued)
-----------------------------------------------------

noncontrolling  ownership interests in subsidiaries  (previously  referred to as
minority   interests).   Noncontrolling   ownership  interests  in  consolidated
subsidiaries  will  be  presented  in  the  consolidated  balance  sheet  within
stockholders' equity as a separate component from the parent's equity.  Earnings
attributable  to the  noncontrolling  interests  will be  reported  as a part of
consolidated  net income and not as a separate income or expense item.  Earnings
per share will continue to be based on earnings  attributable to only the parent
company and does not change upon adoption of SFAS No. 160. SFAS No. 160 provides
guidance on  accounting  for  changes in the  parent's  ownership  interest in a
subsidiary,  including  transactions where control is retained and where control
is relinquished. SFAS No. 160 also requires additional disclosure of information
related to noncontrolling  interests. SFAS No. 160 is effective for fiscal years
beginning  after  December  15,  2008,  and early  adoption is  prohibited.  The
Statement will be applied prospectively to transactions involving noncontrolling
interests,  including noncontrolling interests that arose prior to the effective
date, as of the beginning of the fiscal year it is initially  adopted.  However,
the presentation of noncontrolling interests within stockholders' equity and the
inclusion  of  earnings   attributable  to  the   noncontrolling   interests  in
consolidated  net  income  require  retrospective  application  to  all  periods
presented.  The  Company  will assess the impact on its  consolidated  financial
statements.
















                                      F-20
<PAGE>





Note 5 - Portfolio Assets
-------------------------


Portfolio assets were comprised of the following at December 31, 2007 and 2006:

                                             2007         2006
                                          ----------   ----------
Mortgage note receivable pools            $1,466,796   $2,125,852
Real Estate portfolios                     4,283,440    4,729,647
Tax liens and other                          235,362      196,518
                                          ----------   ----------

     Total portfolio assets                5,985,598    7,052,017

Less valuation allowance for impairment      197,237      253,508
                                          ----------   ----------

     Net portfolio assets                 $5,788,361   $6,798,509
                                          ==========   ==========
All  portfolio  assets are pledged to secure notes  payable to
individuals and others (See Note 6).

The  following  table  presents  changes in the  reserve  for
impairment:

                                         2007         2006
                                      ---------    ---------
Beginning balance                     $ 253,508    $ 202,690
Provision for impairment                232,136      105,000
Amounts charged off against reserve    (288,407)     (54,182)
                                      ---------    ---------

Ending balance                        $ 197,237    $ 253,508
                                      =========    =========






                                      F-21
<PAGE>
<TABLE>
<CAPTION>

Note 6 - Notes Payable
----------------------

At December  31, 2007 and 2006,  notes  payable to  individuals  and others were
comprised of the following:

                                                                 2007         2006
                                                              ----------   ----------
<S>                                                           <C>          <C>

    Non-interest bearing loan payable to minority interest
partner in MAP/MAC, L.L.C., due October 1, 2008               $1,120,136   $1,480,136

Loans payable to One Source Mortgage Investments,
Inc., due interest only monthly or semiannually
 at 12%, maturing September 2008 - March 2009                  1,011,500      626,500

Loans payable to Strategic Equity Investments, Inc.,
due interest semiannually at 12% maturing April 2009 -
September 2009                                                 1,901,000         --

Loan payable to Strategic Equity Investments, Inc.,
due interest semiannually at 14% maturing December 2010          250,000         --

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

Loan payble to individuals, due interest only                    425,998      425,998
quarterly at 12%, maturing November 2008

Loan payable to individual, due interest only semiannually,       95,405       95,405
maturing November 2008

Other                                                             53,450      163,844
                                                              ----------   ----------

Total                                                          5,080,689    3,015,083

Less portion due within one year                               2,614,011    1,522,315
                                                              ----------   ----------
                                                              $2,466,678   $1,492,768
                                                              ==========   ==========



</TABLE>


At December 31, 2007, principal installments on notes payable to individuals and
others were due $2,614,011 in 2008, $2,186,000 in 2009 and $280,678 in 2010.

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



                                      F-22
<PAGE>

Note 6 - Notes Payable  (continued)
----------------------  -----------

Pursuant  to  the  terms  of  the  operating   agreement  for  MAP/MAC,   L.L.C.
("MAP/MAC"), as amended (the "Modification Agreement"),  MAP/MAC and its members
have agreed to release MAC from any claims  arising from any previous  breach or
violation by MAC of MAP/MAC's  governing  documents,  or any related  promissory
note or  servicing  agreements  provided,  (1) MAP/MAC  pays  $100,000 to MAP as
partial  repayment  on  outstanding  loans,  (2) MAC repays to MAP, on or before
October 1, 2008, all other  outstanding loan balances related to the acquisition
of properties made by MAC on behalf of MAP/MAC,  and (3) MAC and MAP/MAC comply,
through  October 1, 2008,  with all other terms and  conditions set forth in the
agreements  governing  or related to MAC's  venture  relationship  with MAP. The
outstanding loan balance to be repaid under the Modification Agreement under (2)
above was  $1,120,135.66  after the $100,000 payment  described in (1) above was
made in November 2007.

Note 7 - Advance From Stockholders
----------------------------------

W. C. Payne  Investments,  L.L.C. and FAX/MACC L.P. advanced  $1,000,000 for the
purchase  of  267,347,556  shares of common  stock in two  separate  tranches of
$500,000,  one of which was paid to the  Company in August,  2007,  prior to the
entry by the parties of a definitive agreement, and the second of which was paid
to the Company in October 2007 (see Note 10). Since the transaction is scheduled
to close during 2008, this amount has been classified as a current  liability in
the accompanying consolidated financial statements.

Note 8- Mortgages Payable

At December 31, 2007 and 2006,  the balance in this caption was comprised of the
following:


                                                            2007         2006
                                                         ----------   ----------
    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.                $  970,316   $  990,412

    Other                                                    69,203       70,348
                                                         ----------   ----------
    Total                                                 1,039,519    1,060,760
    Less Current portion                                     24,500       24,400
                                                         ----------   ----------

                                                         $1,015,019   $1,036,360
                                                         ==========   ==========



                                      F-23
<PAGE>


Note 8- Mortgages Payable (continued)
-------------------------------------

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
former executive  officers,  and both of which are significant  stockholders and
served as directors during 2007. The interest rate on this loan is an adjustable
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 through June 1, 2006, the loan was payable  interest only
at 1% above a specified prime rate.

Estimated  principal  installments  due on  mortgage  loans for each of the five
years subsequent to December 31, 2007 are as follows:


                                          2008                  $ 24,500
                                          2009                    28,600
                                          2010                    31,500
                                          2011                    33,700
                                          2012                    36,000
























                                      F-24
<PAGE>

Note 9 - Minority Interests
---------------------------

Minority  interests on the Company's  consolidated  balance sheets represent the
50%  ownership  interests in the equity of eight  unincorporated  joint  venture
subsidiaries (six in 2006) not owned by the Company.

Changes in minority  interests  for the years ended  December  31, 2007 and 2006
consisted of the following:


                                                     2007           2006
                                                 -----------    -----------

Balance, beginning of year                       $ 5,466,543    $   691,453

Minority interests in net earnings (losses)
of subsidiaries                                       85,729        (90,233)

Capital contributions from minority interests      2,015,802      5,101,546

Distributions of capital to minority interests    (1,340,168)      (236,223)

Distributions of profit to minority interests        (84,927)          --

Discontinued operations                           (2,530,892)          --
                                                 -----------    -----------

Balance, end of year                             $ 3,612,087    $ 5,466,543
                                                 ===========    ===========


Note 10 - Related Party Transactions
------------------------------------

During the years  ended,  December  31, 2007 and 2006,  the  Company  engaged in
certain  transactions  with  Messrs.  William G. Payne and Rod C. Jones and with
certain entities  controlled by them. Messrs.  William G. Payne and Rod C. Jones
are members of the Company's Board of Directors.  Mr. Payne is also the Managing
Member of W.C. Payne  Investments,  L.L.C and Mr. Jones is a limited  partner in
FAX/MACC, L.P., and the Managing Member of FAX GenPar, LLC, which is the General
Partner of Family  Access  Exchange  II, L.P,  which is the  General  Partner of
FAX/MACC, L.P.

Series A Preferred Stock Issuance:

On November 30, 2006,  the Company  entered into a Series A Preferred  Stock and
Common Stock Warrant  Purchase  Agreement  ("Series A 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
9,111,387 shares of the Company's common stock at an exercise price of $0.01 per
warrant share. Under the terms of the Series A Purchase Agreement, the Investors
would also purchase an additional 1,500,000 preferred shares, in



                                      F-25
<PAGE>

Note 10 - Related Party Transactions (continued)
------------------------------------------------

increments of 500,000,  conditioned  on the  satisfaction  of certain  financial
benchmarks set forth in the Series A Purchase  Agreement (see Note 13). Prior to
this transaction, Mssrs. Payne and Jones were not members of the Company's Board
of Directors, but became members immediately after this transaction.

Dutch Fork Capital, LLC:

In December 2006, the Company  entered into a 50-50 joint venture with FAX/Dutch
Fork,  L.P.  (of  which  Messrs.  Payne and Jones  have an  ownership  interest)
pursuant to which FAX/Dutch Fork provided funding to the venture for the purpose
of obtaining  distressed real estate to be serviced by the Company. The original
agreements  governing the venture provide that the Company would receive its out
of pocket  expenses,  plus a pro-rata  share of the profits of the venture after
FAX/Dutch  Fork  received  an  amount  equal  to its  invested  capital,  plus a
preferred return.  Effective May 17, 2007, the Company sold its half interest in
the joint  venture to  FAX/Dutch  Fork for  $300,000;  and as a condition of the
sale,  the Company  agreed to continue  to service the  portfolio  assets in the
joint venture and provide accounting and administrative services at no charge to
Dutch Fork

Subsequent Funding by Series A Investors:

Effective  September 2007, the Company entered into an amendment to the Series A
Purchase Agreement  described above. The Investors  advanced  $1,000,000 for the
purchase of 267,347,556 shares of common stock  (representing  approximately 95%
of the total stock  outstanding)  in two separate  tranches of $500,000,  one of
which was paid to the Company in August, 2007, prior to the entry by the parties
of the definitive agreement,  and the second of which was paid to the Company in
October,  2007.  The  issuance of the shares to the  Investors  is subject to an
amendment to the Company's  Articles of  Incorporation  increasing the Company's
authorized shares.

Vision Ads, Inc:

During the year ended  December  31, 2006,  MAC engaged in certain  transactions
with two of its  principal  officers and with an  affiliated  entity 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, which included the forfeiture of
stock options.



                                      F-26
<PAGE>

Note 10 - Related Party Transactions (continued)
------------------------------------------------

Stockholder Loans:

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 for the year ended December 31, 2006.

Note 11 - Income Taxes
----------------------

The components of income tax (benefit) expense,  on continuing  operations,  for
the nine months ended December 31, 2007 and 2006, respectively, are as follows:

                                                       December 31,
                                                    2007         2006
                                                 ----------  -----------

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

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


The  Company's  income tax  expense for the years  ended  December  31, 2007 and
2006, respectively, differed from the statutory tax rate of 34.0% as follows:


                                                         2007          2006
                                                     -----------    -----------
     Statutory rate applied to income
      before income taxes                            $(1,106,000)   $  (332,800)
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                             1,106,000        332,800
                                                     -----------    -----------
Income tax expense                                   $      --      $      --
                                                     ===========    ===========




                                      F-27
<PAGE>


Note 11 - Income Taxes (continued)
----------------------------------

Deferred tax assets and  liabilities  consisted of the following at December 31,
2007 and December 31, 2006:

                                                 December 31,   December 31,
                                                     2007           2006
                                                 -----------    -----------
           Deferred tax assets
              Net operating loss carryforwards   $ 4,991,000    $ 3,960,000
              Less valuation allowance            (4,991,000)    (3,960,000)


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


As of December 31, 2007,  the Company had a net operating loss  carryforward  of
approximately  $14,700,000 to offset future taxable  income.  Subject to current
regulations,  this  carryforward  began 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
-----------------------------------

In August,  2007,  Messrs.  Payne and Jones, two of the Company's  directors and
significant  shareholders,  exercised warrants for 448,600 and 897,300 shares of
common stock for $4,486 and $8,973, respectively.

Note 13 - 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



                                      F-28
<PAGE>


Note 13 - Series A Preferred Stock Financing Agreement (continued)
------------------------------------------------------------------

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.

The proceeds from the issuance of preferred  stock,  less related issuance costs
of  $86,985,  amounted  to  $1,413,015,  which  was  allocated  $160,530  to the
preferred  stock  and  $1,252,485  to the  warrants  issued  and  classified  as
additional  paid-in capital.  The discount from the value of the preferred stock
will be accreted back to the preferred stock over the seven-year period from the
date of issuance to the date the preferred stock can be redeemed by the Company,
November 30, 2013.  Such  accretion  of the discount on the  preferred  stock is
being  accounted  for as a deemed  dividend to the preferred  stockholders,  and
amounted to $191,352 and $15,946 for the years ended December 31, 2007 and 2006,
respectively.

The Company did not achieve its  benchmarks for the period ended March 31, 2007;
however,  the Investors waived the benchmarks for this period,  and during April
the Company received the first of the subsequent tranches of $500,000 in cash as
contemplated by the November 30, 2006 financing transaction. The Company did not
achieve its  benchmarks  for the period  ended June 30,  2007 and the  Investors
advised the Company that they did not intend to fund further  tranches under the
Purchase Agreement.

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  hereby,  upon  the  determination  that a  holder  of the
preferred  stock is a  "Non-Participating  Holder",  as defined in the  Purchase
Agreement;  any preferred stock of such holder will be  automatically  converted
into shares of common stock on a 1:1 basis. Cumulative undeclared dividends were
$207,962 and $12,500 at December 21, 2007 and 2006, respectively.

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,



                                      F-29
<PAGE>


Note 13 - Series A Preferred Stock Financing Agreement (continued)
------------------------------------------------------------------

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.

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.

Effective  September 2007, the Company entered into an amendment to the Series A
Purchase Agreement  described above. The Investors  advanced  $1,000,000 for the
purchase of  267,347,556  shares of common  stock  (which  would then  represent
approximately  95% of the total stock  outstanding) in two separate  tranches of
$500,000,  one of which was paid to the  Company in August,  2007,  prior to the
entry by the parties of the  definitive  agreement,  and the second of which was
paid to the  Company  in  October,  2007.  The  issuance  of the  shares  to the
Investors is subject to an amendment to the Company's  Articles of Incorporation
increasing the Company's authorized shares.

Note 14 - 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



                                      F-30
<PAGE>


Note 14 - Incentive Plan (continued)
------------------------------------

 (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  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.  As of December 31, 2007 a total of
16,000  ISO's and 84,800  NSO's were  deemed to have been  terminated  under the
plan.



                                      F-31
<PAGE>


Note 14 - Incentive Plan (continued)
------------------------------------

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.  Pursuant to the  December 10, 2007
termination of one of the officers for good cause,  incentive  stock options for
200,000 shares were forfeited.

Note 15 - Common Stock Warrants
-------------------------------

Pursuant to a Senior  Subordinated  Bridge financing executed during August 2006
with the  Investors in the  Company's  Series A Preferred  stock  purchase,  the
Company  issued  two  warrants  for  50,000  shares of common  stock each to the
Investors.  These  warrants were issued at an exercise  price of $0.01 per share
and may be exercised anytime through August 2013.

On November 30, 2006,  the Company  entered into a Series A Preferred  Stock and
Common  Stock  Warrant  Purchase  Agreement  (See Note 4), in which  warrants to
purchase  9,113,387 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
trinomial lattice valuation  methodology.  Based on this analysis,  the value of
the warrants at grant was determined to be $1.00 per warrant share.  Pursuant to
a bridge  financing  agreement with the investors during September 2007, a total
of 1,345,800 warrant shares were duly exercised by the investors. As of December
31, 2007 the  respective  shares of Common  Stock due upon  exercise of warrants
were pending issuance.

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.  The Back-End  warrants are now deemed to be
exercisable in full due to the Company's  failure 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 $.65 per share, which price
may be adjusted with the terms of the warrants.  The Company ascribed a value of
$0.29 per warrant share to these warrants using the previously  noted  trinomial
lattice valuation model. These warrants expire November 30, 2016.



                                      F-32
<PAGE>
<TABLE>
<CAPTION>

Note 15 - Common Stock Warrants (continued)
-------------------------------------------

The Company also issued warrant  certificates for 467,000 shares of common stock
to its former legal counsel and for 150,000 shares to a financial advisor,  both
at an exercise  price of $0.65 per share,  subject to  adjustment  in accordance
with the terms of the warrants.  The Company  valued these warrants at $0.29 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, 2007,  the Company had an obligation  to a financial  consultant
pursuant to a June 19, 2006 Consulting  Agreement for an equity compensation fee
of $308,133,  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 585,096  warrant  shares.
Pursuant to this  agreement,  the  consultant was issued a common stock purchase
warrant on June 11, 2007 for  157,866  warrant  shares at an  exercise  price of
$0.40  which was the actual per share  price at the close of trading on June 11.
Subsequently,  the  consultant was issued a second warrant for 219,025 shares on
June 29, 2007 at an exercise price of $0.43. A third-party consultant determined
that the fair value of these  options  with a  commercially  available  software
product which utilizes a proven trinomial  lattice  valuation  methodology.  The
value of these warrants was determined to be $0.18 and $0.19, respectively,  per
warrant share.  These warrants  expire five years from the date of grant.  As of
December 31, 2007 the Company had an obligation to issue another warrant to this
consultant for a total of 208,205 shares of common stock.

Note 16- Share-Based Compensation
---------------------------------

At December  31,  2007,  the Company  had granted  stock  options for a total of
3,182,000  shares of common stock under its 2006 Equity  Incentive  Plan and had
also granted  other common stock  purchase  warrants for  compensation  purposes
totaling  1,143,891  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  consultants  were  cancelled.  The total
non-cash  compensation  cost that has been charged  against  income for all such
options and  warrants  granted was  $247,422  and  $896,235  for the years ended
December 31, 2007 and 2006,  respectively.  The share-based compensation expense
increased  the basic  loss per share by $0.02 for the year  ended  December  31,
2007.  The result  reflects no related tax  benefit  due to the  Company's  full
valuation  allowance on its deferred tax assets.  As of December 31, 2007, there
was  an  additional  $282,313  of  non-cash   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 to employees for prior  service  during
2006 and those issues to advisors,  consultants  and directors for  compensation
were fully vested at the grant date.



                                      F-33
<PAGE>


Note 16- Share-Based Compensation (continued)

Any options issued pursuant to employment or retention agreements vest according
to a pre-determined time-vest schedule.

A summary of stock options and warrants  outstanding  at December 31, 2007 is as
follows:

                                                                    Weighted-Average
                         Option and             Range of               Remaining             Weighted-Average
                       Warrant Shares       Exercise Prices         Contractual Life          Exercise Price
                      ------------------   -------------------   -----------------------   ----------------------
<S>                   <C>                  <C>                   <C>                       <C>

    Outstanding              4,325,891         $ .40-1.11              4.1 years                   $ .76

    Exercisable              2,859,191         $ .40-1.11              4.0 years                   $ .74

</TABLE>


The lattice (trinomial) option-pricing model was used to estimate the fair value
of options and warrants at the date of individual grants as they occurred during
2006 and 2007.  The  weighted-average  grant  date  fair  value of  options  and
warrants granted in 2007 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:

               Weighted-average grant date
               fair value of options and warrants
               granted                                            $0.39

               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



                                      F-34
<PAGE>


Note 16- Share-Based Compensation (continued)
---------------------------------------------

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.



Note 17 - Venture Funding Agreement
-----------------------------------

Effective  October 22, 2007,  the Company,  MAC, and HBK Fund MS LLC, a Delaware
limited  liability company ("HBK") entered into a Venture Funding Agreement (the
"Venture  Funding  Agreement")  pursuant  to which the Company may receive up to
$75,000,000 in joint venture funding to acquire various pools of distressed real
estate and mortgage notes (collectively,  the "Property Portfolios").  Under the
Venture  Funding  Agreement,  HBK would provide  equity  funding to enable newly
created joint venture entities  (collectively,  the "Joint  Ventures"),  each of
which  would be owned 75% by HBK and 25% by the  Company,  to  acquire  Property
Portfolios, and the Joint Ventures would acquire, manage and sell the distressed
real estate and mortgage  notes.  A new Joint  Venture would be created for each
Property  Portfolio  funded by HBK. Any funding required by the Joint Venture in
excess of the initial equity funding by HBK would be provided by HBK in the form
of  promissory  notes with  maturities  of no less than one year and  bearing an
interest  rate of eight  percent (8%) per annum,  and any required  debt service
associated  with the  promissory  notes  would take  precedence  over any profit
distributions described below.

Upon acquisition of a Property  Portfolio,  the Company would receive a sourcing
fee equal to three percent (3%) of the purchase price of the Property Portfolio.
MAC, under the terms of a servicing agreement between the parties, would service
the Property  Portfolio.  Profit  distributions  from the Joint Venture would be
made first to HBK until it received  repayment of its capital  investment in the
Joint Venture;  second to HBK for its 8% priority return as defined in the Joint
Venture agreement; third to MAC for an amount equal to the 8% return received by
HBK; and  remaining  profits of the venture  would be split in proportion to the
parties' equity ownership.

Through  December  31,  2007,  HBK  provided  equity  funding  of  approximately
$7,600,000 for two joint venture entities.  The Company  recognized  $227,882 of
sourcing fee revenue for the year ended  December 31, 2007 based on the purchase
price of two Property Portfolios acquired.



                                      F-35
<PAGE>


Note 17 - Venture Funding Agreement
-----------------------------------

In  connection  with the  Venture  Funding  Agreement,  the Company has issued a
warrant to purchase shares of our common stock that would, when, if exercised in
full,  result in the warrant  holder  holding 33% of the  outstanding  shares of
common stock.

Note 18 - Lease Commitments
---------------------------

The Company  leases its  corporate  offices in Dallas,  Texas under an operating
lease  expiring in April,  2014.  The Company is required to pay all  insurance,
maintenance  and  repairs  related to this leased  facility.  The Company had no
other significant operating leases. Rental expense under this lease was $120,013
for the year ended December 31, 2007. At December 31, 2007, minimum future lease
payments to be paid  annually  under the  seven-year  non-cancellable  operating
lease for operating space were as follows:

               2008      $190,632
               2009       210,390
               2010       232,710
               2011       232,710
               2012       253,200
               2013       263,445
               2014        87,815


Note 19 - Restatement
---------------------

The financial statements for December 31, 2006 have been restated to present the
carrying value of the Company's  Series A preferred stock at its carrying value,
as opposed to par value,  and to reflect the allocation of net proceeds from the
issuance of preferred  stock between  preferred  stock and the related  warrants
issued. In addition,  the 2006 financial statements were restated to reflect the
accretion of the discount from the redemption  value of the preferred stock as a
deemed dividend to the preferred  stockholders.  The effect of this  restatement
had no impact on the net  stockholders'  deficit at December  31,  2006,  or the
consolidated results of operations for the year ended December 31, 2006.




                                      F-36
<PAGE>


Note 20 - Subsequent Events
---------------------------

On January 1, 2008,  the  Company and Mr.  Michael  Caolo  entered  into a Legal
Consulting  Engagement  Agreement  pursuant  to which the Company  retained  the
services of Mr. Caolo as its General Counsel (the "Consulting Agreement"). Under
the  terms of the  Consulting  Agreement,  Mr.  Caolo  was to  receive a monthly
retainer of $15,000 per month during the two-year  term of the  agreement,  plus
bonuses  based on  company  performance.  On  February  21,  2008,  the  Company
terminated the services of Mr. Michael Caolo,  and on March 6, 2008, the Company
received notification from Mr. Caolo claiming breach of the Consulting Agreement
and  demanding  cure.  Neither the  Company nor Mr.  Caolo has taken any further
action with respect to Mr. Caolo's demand.

Effective  February 12, 2008, the Company entered into two agreements (the "Note
Agreements")  pursuant  to which the Company  may borrow up to an  aggregate  of
$600,000  (the  "Funding  Commitment")  through one or more  advances.  The Note
Agreements  provide that the Company may, from time to time, request advances up
to the Funding Commitment;  provided,  among other things, that (a) no more than
two  advances may be requested  during any  calendar  month,  and (b) no advance
shall be less than $25,000. The first advances under the Note Agreements,  in an
aggregate amount of $300,000, were received by the Company on February 12, 2008.

Amounts  outstanding  under the Note  Agreements  bear  interest  at the rate of
fifteen percent per annum,  compounded  monthly.  All outstanding  principal and
accrued interest on advances is due and payable upon demand.

Repayment  of  advances  under the Note  Agreements  is secured by pledge of the
membership  of other  equity  interests  held by the  Company in  various  joint
ventures  formed  by the  Company  for the  purpose  of  acquiring  and  holding
portfolios of distressed, single-family real estate and non-performing mortgages
that the Company manages.

In connection with the Note  Agreements,  the Company has granted to each lender
there under,  the right,  exercisable  at any time after the earlier to occur of
(a) a going private transaction,  or (b) February 12, 2009, to purchase 12.5% of
the capital stock of the Company for a nominal consideration (an "Option").  The
issuance by the Company of each Option was made in reliance  upon the  exemption
available from registration under Section 4(2) of the Securities Act of 1933.

CSSF Master Fund,  LP, one of the lenders under the Note  Agreements,  is also a
member in Canyon Ferry Capital LLC, a joint venture  previously  established  by
the  Company's  subsidiary,   Mortgage  Assistance  Corporation,  to  acquire  a
portfolio of real estate properties.  MAC is also a member of the joint venture,
serves as its manager and  services the real estate  portfolio.  Pursuant to the
terms  governing this joint venture,  MAC receives a share in the profits of the
joint  venture  once its  venture  partners  have  received  the amount of their
capital contribution to the venture, plus a preferred return on such capital.

Mr. Payne is an employee of the investment advisor for CSSF Master Fund. In such
capacity,



                                      F-37
<PAGE>


Note 20 - Subsequent Events
---------------------------

Mr. Payne may receive bonus  compensation from this investment  advisor based on
the performance of CSSF Master Fund.








































                                      F-38
<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 14, 2008               By: /s/ Ron Johnson
                                       ---------------------------------------
                                       Ron Johnson,
                                       President and Chief Executive Officer

Date:  April 14, 2008               By: /s/  Sandra Valiquette
                                       ---------------------------------------
                                       Sandra Valiquette,
                                       Controller
                                       (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 14, 2008
-------------------------    Officer and Director
Ron Johnson


/s/  Dennis Downey           Chief Operating Officer              April 14, 2008
-------------------------    and Director
Dennis Downey


/s/  Sandra Valiquette       Controller                           April 14, 2008
-------------------------    (principal accounting officer)
Sandra Valiquette


<PAGE>