UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB



(Mark one)
|X|      QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934

               For the quarterly period ended September 30, 2006

|_|      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

               For the transition period from ______________ to ________________

               Commission file number ______________________

                     Mortgage Assistance Center Corporation
        (Exact Name Of Small Business Issuer As Specified In Its Charter)

            Florida                                              06-1413994
(State or Other Jurisdiction of                               (I.R.S. Employer
Incorporation or Organization)                               Identification No.)

                         2614 Main St., Dallas, TX 75226
                    (Address of Principal Executive Offices)

                                 (214) 670-0005
                (Issuer's Telephone Number, Including Area Code)


         (Former Name, Former Address and Former Fiscal Year, if Changed
                               Since Last Report)

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

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

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

         Check whether the registrant  filed all documents and reports  required
to be  filed  by  Section  12,  13 or  15(d)  of  the  Exchange  Act  after  the
distribution of securities under a plan confirmed by a court.     Yes |_| No |_|

                      APPLICABLE ONLY TO CORPORATE ISSUERS

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 12,725,720 shares of Common
Stock as of September 30, 2006

     Transitional Small Business Disclosure Format:               Yes |_| No |X|


<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

Item 1.  Financial Statements.



                     Mortgage Assistance Center Corporation




                        Consolidated Financial Statements




                                       And




                        REPORT OF INDEPENDENT REGISTERED

                             Public Accounting Firm




                               September 30, 2006











<PAGE>


                     MORTGAGE ASSISTANCE CENTER CORPORATION



                                Table of Contents




                                                                            Page

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

Financial Statements
     Consolidated Balance Sheets
          as of September 30, 2006, and December 31, 2005....................F-4

     Consolidated Statements of Operations and Comprehensive Loss
          for the three and nine months ended September 30, 2006 and 2005....F-6

     Consolidated Statements of Cash Flows
         for nine months ended September 30, 2006 and 2005...................F-8

     Notes to Consolidated Financial Statements.............................F-10













                                      F-1
<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


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


We have  reviewed  the  accompanying  consolidated  balance  sheet  of  Mortgage
Assistance  Center  Corporation  (formerly  Safe  Alternatives   Corporation  of
America,  Inc.),  a  Florida  corporation,  as of  September  30,  2006  and the
consolidated statements of operations and comprehensive loss for the three-month
and nine-month  periods ended September 30, 2006 and 2005, and the  consolidated
statements of cash flows for the nine-month periods ended September 30, 2006 and
2005. These interim financial statements are the responsibility of the Company's
management.

We conducted our review in accordance  with the standards of the Public  Company
Accounting  Oversight  Board  (United  States).  A review of  interim  financial
information  consists  principally of applying analytical  procedures and making
inquiries of persons  responsible  for financial and accounting  matters.  It is
substantially  less in scope  than an audit  conducted  in  accordance  with the
standards of the Public Company  Accounting  Oversight  Board,  the objective of
which is the expression of an opinion  regarding the financial  statements taken
as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the  accompanying  interim  financial  statements  for  them to be in
conformity with U.S. 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
and a working  capital  deficiency  at September 30, 2006.  These  circumstances
create  substantial  doubt  about the  Company's  ability to continue as a going
concern and are discussed in Note 5. The financial statements do not contain any
adjustments that might result from the outcome of this uncertainty.






                                      F-2
<PAGE>

The  December  31,  2005  financial  statements  of Mortgage  Assistance  Center
Corporation  and  Mortgage  Assistance  Corporation  were  audited  by us and we
expressed an unqualified  opinion in our report dated March 3, 2006, but we have
not performed any auditing procedures since that date.




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

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

Tulsa, Oklahoma
November 10, 2006






















                                      F-3
<PAGE>
<TABLE>
<CAPTION>

                     Mortgage Assistance Center Corporation
                           Consolidated Balance Sheets
         September 30, 2006 (Unaudited) and December 31, 2005 (Audited)




                                                        September 30,    December 31,
                                                             2006            2005
                                                         (Unaudited)      (Audited)
                                                        -------------   -------------
<S>                                                     <C>             <C>
                                 ASSETS

Current Assets:
Cash and cash equivalents                               $     211,899   $     365,097
Portfolio assets, at cost (net of impairment reserve
   of $193,508 and $202,690 at September 30, 2006 and
   December 31, 2005, respectively)                         2,670,309       1,708,053
Accounts receivable-related parties                            57,141          58,995
Prepaid expenses                                               95,641          30,547
                                                        -------------   -------------

Total Current Assets                                        3,034,990       2,162,692
                                                        -------------   -------------
Property and Equipment, at cost:
Furniture, equipment and computers                            106,868         103,579
Less accumulated depreciation                                  47,402          30,286
                                                        -------------   -------------

Total Property and Equipment                                   59,466          73,293

                                                        -------------   -------------
Investments And Other Assets:
Investment in Metro Media Partnership                          79,165          98,916
Deposits                                                        8,000           3,000
                                                        -------------   -------------

Total Investments and Other Assets                             87,165         101,916
                                                        -------------   -------------

Total Assets                                            $   3,181,621   $   2,337,901
                                                        =============   =============
</TABLE>








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

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

                     Mortgage Assistance Center Corporation
                           Consolidated Balance Sheets
         September 30, 2006 (Unaudited) and December 31, 2005 (Audited)



                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                          September 30,     December 31,
                                                               2006             2005
                                                           (Unaudited)       (Audited)
                                                          -------------    -------------
<S>                                                       <C>              <C>
Current Liabilities:
Notes payable-individuals and others                      $   3,456,417    $   1,794,288
Note payable - stockholder                                       73,602             --
Accounts payable-trade                                          208,583          180,308
Accounts payable-others                                         200,000          289,784
Accrued interest payable                                        143,583           72,983
Other accrued liabilities                                       250,887          156,743
                                                          -------------    -------------

Total Current Liabilities                                     4,333,072        2,494,106

                                                          -------------    -------------
Long-term Debt:
Notes payable-individuals and others                             62,500          639,105
Note payable-stockholder                                           --             60,574
Mortgages payable                                                70,004           71,104

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

Total Long-Term Debt                                            132,504          770,783
                                                          -------------    -------------

Minority Interests                                              544,706          292,536
                                                          -------------    -------------

Total Liabilities                                             5,010,282        3,557,425
                                                          -------------    -------------

Commitments (Note 14)

Stockholders' Equity  (Deficit):
Common stock, par value $0.001 per share; authorized
authorized 50,000,000 shares; issued  12,725,124 shares          12,726           12,726
Additional paid-in capital                                      173,663          173,663
Retained earnings (deficit) after December 31, 2004          (2,117,210)      (1,508,073)
                                                          -------------    -------------
                                                             (1,930,821)      (1,321,684)
Subscriptions issuable                                          102,160          102,160
                                                          -------------    -------------
Total Stockholders' Equity (deficit)                         (1,828,661)      (1,219,524)
                                                          -------------    -------------

Total Liabilities and Stockholders' Equity                $   3,181,621    $   2,337,901
                                                          =============    =============
</TABLE>





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

                                      F-5
<PAGE>
<TABLE>
<CAPTION>

                     Mortgage Assistance Center Corporation
          Consolidated Statements of Operations and Comprehensive Loss
             Three and Nine Months Ended September 30, 2006 and 2005
                                   (Unaudited)


                                                        Three Months Ended                Nine Months Ended
                                                  September 30,    September 30,    September 30,    September 30,
                                                       2006             2005             2006             2005
                                                                    (Restated)                        (Restated)
                                                  -------------    -------------    -------------    -------------
<S>                                               <C>              <C>              <C>              <C>
Operating Revenues:
   Sales of portfolio assets                      $   1,073,470    $     499,139    $   1,849,105    $   1,798,576
   Servicing fees and comissions from
      affiliates and others                             146,965            6,253          291,555            8,539
   Income (loss) from partnership                         8,769             --            (19,751)            --
   Other                                                  5,385           (8,421)          13,004            4,628
                                                  -------------    -------------    -------------    -------------
      Gross operating revenues                        1,234,589          496,971        2,133,913        1,811,743
   Cost of portfolio assets sold                        833,545          273,338        1,381,570        1,146,507
                                                  -------------    -------------    -------------    -------------
      Net operating revenues                            401,044          223,633          752,343          665,236
                                                  -------------    -------------    -------------    -------------
Operating Expenses:
   Salaries, wages and contract labor                   218,542          242,501          617,107          530,654
   Selling, general and administrative expenses         175,013          233,943          540,761          594,471
   Depreciation and amortization                          5,831            5,580           17,116           12,512
   Bad debts                                             97,509             --             97,509             --
                                                  -------------    -------------    -------------    -------------
      Total operating expenses                          496,895          482,024        1,272,493        1,137,637
                                                  -------------    -------------    -------------    -------------
Operating loss                                          (95,851)        (258,391)        (520,150)        (472,401)
                                                  -------------    -------------    -------------    -------------
Other income (expense):
   Interest and other income                              2,938              222          104,788            1,060
   Interest expense                                     (57,243)         (45,356)        (166,195)        (137,133)
   Merger expense                                          --             (4,758)            --           (299,758)
   Investor relations expense                              --            (61,406)            --            (61,406)
                                                  -------------    -------------    -------------    -------------

      Total other income (expense)                      (54,305)        (111,298)         (61,407)        (497,237)
                                                  -------------    -------------    -------------    -------------
Loss before minority interests and
      income taxes                                     (150,156)        (369,689)        (581,557)        (969,638)
</TABLE>



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

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

                     Mortgage Assistance Center Corporation
          Consolidated Statements of Operations and Comprehensive Loss
             Three and Nine Months Ended September 30, 2006 and 2005
                                   (Unaudited)


                                               Three Months Ended               Nine Months Ended
                                         September 30,    September 30,    September 30,    September 30,
                                              2006             2005             2006             2005
                                                            (Restated)                        (Restated)
                                         -------------    -------------    -------------    -------------
<S>                                      <C>              <C>              <C>                   <C>
Loss before minority interests and
      and income taxes                   $    (150,156)   $    (369,689)   $    (581,557)        (969,638)

Minority interests                             (63,047)         (84,272)         (27,580)        (194,503)
                                         -------------    -------------    -------------    -------------

Loss before income taxes                      (213,203)        (453,961)        (609,137)      (1,164,141)

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

Net Loss                                      (213,203)        (453,961)        (609,137)      (1,164,141)

Other comprehensive income                        --               --               --               --
                                         -------------    -------------    -------------    -------------

Comprehensive Loss                       $    (213,203)   $    (453,961)   $    (609,137)   $  (1,164,141)
                                         =============    =============    =============    =============

Net loss per weighted-average share of
  common stock outstanding, calculated
  on Net Loss:
                   Basic                 $       (0.02)   $       (0.04)   $       (0.05)   $       (0.09)
                                         =============    =============    =============    =============
                   Fully diluted         $       (0.02)   $       (0.04)   $       (0.05)   $       (0.09)
                                         =============    =============    =============    =============
Weighted-average number of shares of
  common stock outstanding:
                   Basic                    12,725,124       12,725,124       12,725,124       12,662,016
                                         =============    =============    =============    =============
                   Fully diluted            13,011,874       12,725,124       12,913,300       12,662,016
                                         =============    =============    =============    =============
</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
                  Nine Months Ended September 30, 2006 and 2005
                                   (unaudited)



                                                                            Nine Months Ended
                                                                               September 30,
                                                                            2006           2005
                                                                                        (Restated)
                                                                        -----------    -----------
<S>                                                                     <C>            <C>
Cash Flows From Operating Activities
  Net loss                                                              $  (609,137)   $(1,164,141)
                                                                        -----------    -----------
  Adjustments to reconcile net loss to net
  cash provided (used) by operating activities:
    Depreciation                                                             17,116         12,512
    Professional fees paid with common stock                                   --              600
    (Income) loss from partnership                                           19,751           --
    Merger expense                                                             --          295,000
    Minority interests in subsidiaries' net earnings                         27,580        194,503
    Change in assets and liabilities:                                      (358,957)
      (Increase) decrease in portfolio assets                              (961,804)       (57,220)
      (Increase) decrease in accounts receivable from related parties         1,854
      (Increase) decrease in prepaid expenses                               (65,094)        13,104
      (Increase) decrease in deposits                                        (5,000)          --
      Increase (decrease) in bank overdraft                                    --          128,945
      Increase (decrease) in accounts payable-trade                          28,275        146,864
      Increase (decrease) in accounts payable-other                         (89,784)          --
      Increase (decrease) in accrued interest payable                        81,239         35,681
      Increase (decrease) in other accrued liabilities                       93,544         64,324
                                                                        -----------    -----------

    Total adjustments                                                      (852,323)       475,356
                                                                        -----------    -----------

         Net Cash Provided (Used) by Operating Activities                (1,461,460)      (688,785)
                                                                        -----------    -----------

Cash Flows From Investing Activities

   Purchase of property and equipment                                        (3,289)       (44,139)
                                                                        -----------    -----------

        Net Cash Used by Investing Activities                                (3,289)       (44,139)
                                                                        -----------    -----------
</TABLE>






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
                  Nine Months Ended September 30, 2006 and 2005
                                   (unaudited)



                                                                     Nine Months Ended
                                                                       September 30,
                                                                    2006           2005
                                                                               (Restated)
                                                                -----------    -----------
<S>                                                             <C>            <C>
Cash Flows From Financing Activities
   Proceeds from issuance of common stock                       $      --      $      --
   Proceeds from issuance of debt to individuals and others       1,571,500      1,011,845
   Repayments of debt to individuals and others                    (496,615)      (593,000)
   Capital contributions from minority interests                    402,000           --
   Distributions to minority interests                             (177,410)          --
   Proceeds from mortgage loan                                         --           71,200
   Repayments of mortgage debt                                         (952)          --
   Net advances from Stockholder                                     13,028           --
                                                                -----------    -----------

          Net Cash Provided (Used) by Financing Activities        1,311,551        490,045
                                                                -----------    -----------

          Net Increase (Decrease) in Cash                          (153,198)      (242,879)

          Cash at Beginning of Period                               365,097        591,055
                                                                -----------    -----------

          Cash at End of Period                                 $   211,899    $   348,176
                                                                ===========    ===========


Supplemental Disclosures of Cash Flow Information


Cash Paid During the Period for:
Interest                                                        $    84,956    $   101,452
Income taxes                                                    $      --      $      --
</TABLE>








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

                                      F-9
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                               September 30, 2006
                                   (Unaudited)


Note 1 - Organization
         ------------

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

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

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

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

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

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



                                      F-10
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                               September 30, 2006
                                   (Unaudited)



Note 2 - Preparation of Financial Statements
         -----------------------------------

         The Company  follows the accrual basis of accounting in accordance with
         accounting  principles  generally  accepted  in the  United  States  of
         America and has a year end of December 31.

         The  preparation of financial  statements in conformity with accounting
         principles  generally accepted in the United States of America requires
         management to make estimates and  assumptions  that affect the reported
         amounts of assets and liabilities  and disclosure of contingent  assets
         and  liabilities  at the  date  of the  financial  statements  and  the
         reported amounts of revenues and expenses during the reporting  period.
         Actual results could differ from those estimates.

         Management  further  acknowledges  that it is  solely  responsible  for
         adopting sound  accounting  practices,  establishing  and maintaining a
         system of internal  accounting  control and  preventing  and  detecting
         fraud. The Company's system of internal  accounting control is designed
         to assure, among other items, that 1) recorded  transactions are valid;
         2) valid transactions are recorded; and 3) transactions are recorded in
         the proper  period in a timely manner to produce  financial  statements
         which present fairly the financial condition, results of operations and
         cash flows of the Company for the respective periods being presented.

         During interim periods, the Company follows the accounting policies set
         forth in its annual audited  financial  statements filed with the U. S.
         Securities and Exchange  Commission on its Annual Report on Form 10-KSB
         for the year ended December 31, 2005. The information  presented within
         these  interim  financial  statements  may not include all  disclosures
         required by generally accepted accounting principles,  and the users of
         financial  information provided for interim periods should refer to the
         annual  financial  information and footnotes when reviewing the interim
         financial results presented herein.

         In the  opinion  of  management,  the  accompanying  interim  financial
         statements,  prepared  in  accordance  with  the U. S.  Securities  and
         Exchange  Commission's  instructions for Form 10-QSB, are unaudited and
         contain all material  adjustments,  consisting only of normal recurring
         adjustments  necessary  to present  fairly the  consolidated  financial
         condition,  results of operations and cash flows of the Company for the
         respective  interim  periods  presented.  The current period results of
         operations are not necessarily  indicative of results, which ultimately
         will be reported for the full fiscal year ending December 31, 2006.



                                      F-11
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                               September 30, 2006
                                   (Unaudited)


Note 3 - Business Combination
         --------------------

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

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

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

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

         As of May 10, 2005, MACC received 6,896,556 MAC shares (92%) and caused
         11,034,489  (87.1%)  of  the  Company  shares  to be  issued  to  three
         individuals who comprise a control group consisting of Dale Hensel, Dan
         Barnett and Michelle Taylor.  Together they control 87.1% of the voting
         common  stock of the  Company.  Dale  Hensel  is the sole  officer  and
         director of the Company.  Mr. Hensel is also the President and director
         of MAC.  Mr.  Barnett is the Vice  President  and  director of MAC. Ms.
         Taylor is a Vice  President  and  director  of MAC.  Subsequently,  the
         remainders of the MAC shares were  surrendered  and  12,000,000  shares
         were issued for 100% of MAC.

                                      F-12
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                               September 30, 2006
                                   (Unaudited)

Note 3 - Business Combination (continued)
         --------------------

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

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

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

         The  acquisition  of MAC  constituted  an exchange of equity  interests
         between  entities  under common control and resulted in a change in the
         reporting   entity.   This  type  of  transaction  is  not  a  business
         combination  under Statement of Financial  Accounting  Standards Number
         141 and, consequently,  has been accounted for in a manner similar to a
         pooling of interests rather than as a purchase. Accordingly, the equity
         interests that were issued to MAC  shareholders in May 2005 in exchange
         for the net  assets of MAC were  given  effect as of  January  1, 2005,
         based on the net book  value of MAC on a  historical  cost  basis.  The
         results of operations for the interim periods ending September 30, 2006
         and  2005  present  the  combined  results  of MACC  and MAC for  those
         periods.



                                      F-13
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                               September 30, 2006
                                   (Unaudited)




Note 4 - Summary of Significant Accounting Policies
         ------------------------------------------

         Description of Business:

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

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

         Principles of Consolidation and Basis of Presentation:

         The accompanying  financial statements are consolidated and include the
         financial statements of MACC, MAC, Bluestone Capital, L.L.C. and Canyon
         Ferry  Capital,   L.L.C.,  its  wholly  owned  subsidiaries,   and  two
         unincorporated  entities,  MAP/MAC,  L.L.C.  and Apple Canyon  Capital,
         L.L.C.  All  significant  intercompany  accounts and  transactions  are
         eliminated in consolidation.

         The  Company  owns  50% of  MAP/MAC,  L.L.C.  and 50% of  Apple  Canyon
         Capital,  L.L.C.  (subsequent  to the sale of a 6%  interest  in August
         2006) and has the ability to exercise  control over the  operations  of
         both entities.  The consolidated  financial  statements include 100% of
         the assets and liabilities of MAP/MAC, L.L.C. and Apple Canyon Capital,
         L.L.C.,  with the ownership interests of minority investors recorded as
         a noncurrent liability, "minority interests."

         Investments in other  entities where MACC has an ownership  interest of
         from  20% to  50%  and  the  ability  to  significantly  influence  the
         operations of the investee are accounted for using the equity method of




                                      F-14
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                               September 30, 2006
                                   (Unaudited)


Note 4 - Summary of Significant Accounting Policies  (continued)
         ------------------------------------------

         Principles of Consolidation and Basis of Presentation: (continued)

         accounting,  and the  investment  balance  is  included  in  long  term
         investments,  while  MACC's  share  of  the  investees'  operations  is
         included in other operating revenues.


         ACCOUNTING CHANGE:


         Effective April 1, 2006, the Company began  consolidating  the accounts
         MAP/MAC,  L.L.C.   Historically  the  Company  had  accounted  for  its
         investment in MAP/MAC,  L.L.C.  under the equity method. The change was
         made to more clearly  reflect the  Company's  operations as a financial
         services  company,  utilizing  funding  from a third party  investor to
         finance the purchase of mortgage note receivable  pools and real estate
         portfolios,  either directly or through  unincorporated  ventures.  The
         consolidation of MAP/MAC,  L.L.C. did not have a material impact on the
         results of operations or financial position of the Company.


         PORTFOLIO ASSETS:


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

         Mortgage Note Receivable Pools:

         Mortgage  note  receivable  pools  consist   primarily  of  first  lien
         distressed  real estate based  mortgages.  The cost basis of loan pools
         acquired  consists of their  purchase price from banks or other sellers
         plus  purchase  commissions,  if any.  Loan pool costs are allocated to
         individual loans based on the face value of the unpaid principal of the
         loans and their  performance  status based on the note's  expected cash
         flow. Any payments of due diligence costs, property taxes, or insurance
         required  are  capitalized  and  included  in  the  cost  basis  of the
         individual loans involved.


         Subsequent  to  acquisition,  the adjusted  cost of the  mortgage  note
         receivable  pools is evaluated for impairment on a quarterly basis. The
         evaluation of impairment is determined based on the review of estimated
         future cash receipts,  which represents the net realizable value of the
         note pool. Once it is determined that there is impairment,  a valuation
         allowance  is  established  for  any  impairment   identified   through
         provisions  charged to  operations  in the period of the  impairment is
         identified.  The Company  determined  that an  impairment  allowance of
         $193,508 and  $202,690 was required at September  30, 2006 and December
         31, 2005, respectively.



                                      F-15
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                               September 30, 2006
                                   (Unaudited)




Note 4 - Summary of Significant Accounting Policies (continued)
         ------------------------------------------

         Mortgage Note Receivable Pools: (continued)

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

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

         Real Estate Portfolios:

         Real estate portfolios  consist of real estate acquired by foreclosures
         of individual mortgage notes receivable. Such portfolios are carried at
         the lower of cost or fair value less estimated  costs to sell. The cost
         of  foreclosed  real estate  consists  of original  loan costs plus any
         costs relating to the  development  and  improvement of the real estate
         for its  intended  use.  The  costs  of  foreclosure  and any  required
         refurbishment  costs to bring the property to resalable  condition,  as
         well as any maintenance,  taxes and insurance costs required during the
         holding period are  capitalized.  Income or loss is recognized upon the
         disposal of real estate at the date of closing, based on the difference
         between selling prices, less commissions, and capitalized costs. Rental
         income,  net of expenses,  on real estate portfolios is recognized when
         received.  Accounting for portfolios is on an individual asset-by-asset
         basis as opposed to a pool basis.

         Subsequent to acquisition, the amortized 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
         September 30, 2006 and December 31, 2005.






                                      F-16
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                               September 30, 2006
                                   (Unaudited)


Note 4 - Summary of Significant Accounting Policies (continued)
         ------------------------------------------

         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 ranging
         from two to seven years.

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

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

         Income Taxes:

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

         Net Loss Per 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").




                                      F-17
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                               September 30, 2006
                                   (Unaudited)




Note 4 - Summary of Significant Accounting Policies (continued)
         ------------------------------------------

         Net Loss Per Share: (continued)

         Under the  provisions  of SFAS No.  128 and SAB 98,  basic  net  income
         (loss) per share is calculated by dividing net income (loss)  available
         to common stockholders for the period by the weighted average number of
         common shares outstanding during the period.

Note 5 - Going Concern Uncertainty
         -------------------------

         The  accompanying  financial  statements  have been prepared on a going
         concern basis,  which  contemplates  the  realization of assets and the
         settlement  of  liabilities  and  commitments  in the normal  course of
         business.  As  shown  in the  financial  statements,  the  Company  has
         incurred  significant  operating  losses  in 2006  and  prior  periods,
         resulting in an accumulated stockholders' deficit and a working capital
         deficit as of September 30, 2006.  These  factors,  among  others,  may
         indicate that the Company will be unable to continue as a going concern
         for a  reasonable  period  of time.  The  financial  statements  do not
         include any adjustments  relating to the  recoverability  of assets and
         classification  of  liabilities  that  might be  necessary  should  the
         Company  be  unable  to  continue  as a going  concern.  The  Company's
         continuation  as a going  concern  is  dependent  upon its  ability  to
         generate  sufficient  cash  flow to meet  its  obligations  on a timely
         basis,  to  obtain  additional  financing  or  refinancing  as  may  be
         required, and ultimately to sustain profitability.

         The Company is actively  pursuing  alternative  financing plans to fund
         the  Company's  requirements,  and  those  plans  include,  but are not
         limited to, additional equity sales or debt financing under appropriate
         market  conditions,  allegiances  or partnership  agreements,  or other
         business   transactions   which   could   generate   adequate   funding
         opportunities.

         The  Company  executed a Term  Sheet in July 2006 with an  unaffiliated
         third party which would provide for up to a $200,000  bridge  financing
         immediately upon acceptance and execution of the Term Sheet and up to a
         $3,000,000  Series  A  Preferred  Stock  financing.  The  agreement  is
         non-binding  and a condition  to closing  would  require the Company to
         restructure the majority of its existing short-term debt.

         The Company  continues to explore  opportunities  to secure  additional
         sources of debt financing as a means of more cost effectively acquiring
         pools of mortgage notes and foreclosed properties.

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



                                      F-18
<PAGE>


                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                               September 30, 2006
                                   (Unaudited)


Note 6 - Portfolio Assets

         Portfolio assets were comprised of the following at September 30, 2006:


            Mortgage note receivable pools                            $2,192,821
             Real Estate portfolios                                      451,500
             Tax liens                                                   185,788
             Other                                                        33,708
                                                                      ----------

                  Total portfolio assets                               2,863,817

             Less valuation allowance for impairment                     193,508
                                                                      ----------

                  Net portfolio assets                                $2,670,309
                                                                      ==========



         Portfolio  assets are pledged to secure  non-recourse  notes payable to
         individuals (See Note 8).

Note 7 - Investment in Partnership
         -------------------------

         In December 2005 MACC and two unrelated  third parties formed 999 Metro
         Media Venture ("Metro Media Partnership"),  a partnership, to purchase,
         manage  and  develop  certain  commercial  rental  property  located in
         Dallas,  Texas. MACC contributed 20% of the initial capital  investment
         and has a 50%  interest in the earnings  (loss) of the venture.  MACC's
         initial capital contribution was $100,000,  funded by the obligation of
         the third parties to purchase 40,000 shares of MACC common stock valued
         at $2.50 per share.  MACC's  investment in Metro Media  Partnership  is
         accounted for using the equity method.

         A summary  of the  results  of  operations  for the nine  months  ended
         September 30, 2006 and net assets at September 30, 2006 for Metro Media
         Partnership is as follows:


             Results of operations:
                  Total revenues                                    $    87,204
                  Operating profit (loss)                                23,134
                  Net income (loss)                                     (39,503)

             Net assets:
                  Current assets                                    $   138,844
                  Noncurrent assets                                   1,303,944
                                                                    -----------
                  Total assets                                        1,442,788

                  Current liabilities                                   (31,845)
                  Noncurrent liabilities                               (995,372)
                                                                    -----------
                                                                    $   415,571
                                                                    ===========


                                      F-19
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                               September 30, 2006
                                   (Unaudited)



Note 8 - Notes Payable

         At September  30, 2006,  notes payable to  individuals  and others were
         comprised of the following:


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

           Loans due principal and accrued interest
           at 12% at maturity in April - November 2006                   578,083

           Loan due interest only monthly at 16%
           maturing  February 2006                                       223,200

           Senior subordinated notes due principal and accrued
           interest at 12% at maturity February-March 2007               200,000

           Loan due principal and accrued interest at 3% at
           maturity in January 2007                                      200,000

           Loan due February 2006, issuance of
           30,000 shares of common stock at inception
           and 1,800 shares monthly beginning April 2005
           through maturity in lieu of interest                          100,000

           Loans due interest only on a semi annual basis at 12%,
           maturing June 2007 through September 2008                     147,500

           Loans due interest only on a monthly or
           quarterly basis at 10%, maturing February
           through August 2006                                           276,544

           Loans due principal and accrued interest at 10% at
           maturity in October 2006                                      208,000

           Other                                                         105,454
                                                                      ----------

              Total                                                    3,518,917

              Less portion due within one year                         3,456,417
                                                                      ----------

                                                                      $   62,500
                                                                      ==========


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


                                      F-20
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                               September 30, 2006
                                   (Unaudited)



Note 8 - Notes Payable (continued)

         The $200,000 senior  subordinated  notes are convertible  into Series A
         preferred  stock of the Company,  if and when the Company is authorized
         to issue shares of Series A preferred stock.

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

         Pursuant to the terms of the  operating  agreement of this entity,  MAC
         will periodically and from time to time issue distributable cash to MAP
         consisting of proceeds from the sale of mortgage  notes and  properties
         owned  by  MAP/MAC,   net  of  all  costs  and  fees  incurred  in  the
         acquisition,  servicing  and sale of such  assets.  By agreement of the
         Parties,  such  distributable  cash may be  reinvested by MAP back into
         MAP/MAC for the purchase of additional  pools of mortgage  notes. As of
         September  30,  2006,   MAP  has  elected  to  reinvest   three  profit
         distribution  payments  back  into  MAP/MAC  for a  total  non-interest
         bearing loan payable  amount of  $1,480,136.  Proceeds  from these cash
         distribution payments subsequently  reinvested in MAP/MAC were used for
         the acquisition of additional  mortgage notes, which are in the process
         of being  serviced  and  sold.  Pursuant  to the  terms of the  MAP/MAC
         operating agreement,  no interim payments of principal are due prior to
         the sale of the underlying assets.  Upon sale of the underlying assets,
         MAC is obligated to repay the non-interest  bearing note, from proceeds
         of the sale, and equally distribute  remaining net profits,  if any, to
         MAC and MAP individually.

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






                                      F-21
<PAGE>


                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                               September 30, 2006
                                   (Unaudited)


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

         Minority  interests  on  the  Company's   consolidated  balance  sheets
         represent  the  ownership  percentages  of two  subsidiaries,  MAP/MAC,
         L.L.C. (50%) and Apple Canyon Capital,  L.L. C. (50%), not owned by the
         Company.

         Changes to minority  interests for the nine-months  ended September 30,
         2006, consisted of the following:


             Balance, December 31, 2005                               $ 292,536

             Minority interests in earnings of subsidiaries              27,580

             Capital contributions from minority interests
                in Apple Canyon Capital, L.L.C                          402,000

             Distributions to minority interests in
                MAP/MAC, L.L.C                                         (177,410)
                                                                      ---------

             Balance, September 30, 2006                              $ 544,706
                                                                      =========



         In August 2006,  the Company sold  approximately  6% of its interest in
         Apple Canyon  Capital,  L.L.C.  to an  unrelated  party for $52,000 and
         recovered its capital investment.


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

         During the period  ended  September  30,  2006,  MAC engaged in certain
         transactions with two affiliated entities, ABOVO Corporation and Vision
         Ads, Inc. ("VA"),  (dba "Red Horse Realty"),  two corporations owned by
         MAC's vice president.

         MAC  charges  VA, a real estate  management  firm,  for usage of office
         space,  personnel and other  administrative  costs.  MAC had an account
         receivable from VA of $55,501 at September 30, 2006.

         ABOVO Corporation  engages in the purchase and sale of residential real
         estate, and often carries the notes receivable with its purchasers.  In
         2004, MAC began servicing ABOVO  Corporation's  real estate loans.  MAC
         recognized $7,588 of servicing fees from ABOVO Corporation for the nine
         months ended September 30, 2006.



                                      F-22
<PAGE>
<TABLE>
<CAPTION>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                               September 30, 2006
                                   (Unaudited)



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

         The  components  of  income  tax  (benefit)   expense,   on  continuing
         operations,  for the nine  months  ended  September  30, 2006 and 2005,
         respectively, are as follows:
                                                         Nine Months Ended
                                                   September 30,   September 30,
                                                        2006            2005
                                                   -------------   -------------
            Federal:
                Current                            $        --     $        --
                Deferred                                    --              --
                                                   -------------   -------------
                                                            --              --
                                                   -------------   -------------
            State:
                Current                                     --              --
                Deferred                                    --              --
                                                   -------------   -------------

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


         The Company's  income tax expense for the periods  ended  September 30,
         2006 and 2005,  respectively,  differed  from the statutory tax rate of
         34.0% as follows:

                                                                       Nine Months Ended
                                                                 September 30,    September 30,
                                                                      2006             2005
                                                                 -------------    -------------
         <S>                                                     <C>              <C>
         Statutory rate applied to income
               before income taxes                               $    (191,100)   $    (395,800)
         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                                   191,100          395,800
                                                                 -------------    -------------
         Income tax expense                                      $        --      $        --
                                                                 =============    =============
         </TABLE>



         Deferred  tax assets and  liabilities  consisted  of the  following  at
         September 30, 2006 and December 31, 2005:


                                                 September 30,     December 31,
                                                      2006             2005
                                                 -------------    -------------
         Deferred tax assets
              Net operating loss carryforwards   $   3,841,000    $   3,222,000
              Less valuation allowance              (3,841,000)      (3,222,000)
                                                 -------------    -------------

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




                                      F-23
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                               September 30, 2006
                                   (Unaudited)



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

         As of  September  30,  2006,  the  Company  had a  net  operating  loss
         carryforward  of  approximately  $11,300,000  to offset future  taxable
         income. Subject to current regulations, this carryforward will begin to
         expire in 2007. Due to the reverse acquisition  transaction with MAC in
         May 2005,  the usage of the Company's net operating  loss  carryforward
         will be  severely  limited.  The  amount  and  availability  of the net
         operating loss carryforwards may be subject to limitations set forth by
         Section 338 of the Internal Revenue Code. Factors such as the number of
         shares ultimately issued within a three year look-back period;  whether
         there  is a  deemed  more  than  50  percent  change  in  control;  the
         applicable  long-term  tax exempt bond rate;  continuity  of historical
         business;  and  subsequent  income of the  Company  all enter  into the
         annual   computation   of   allowable   annual   utilization   of   the
         carryforwards.

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

Note 12 - Common Stock Transactions
          -------------------------

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

         The effect of the reverse stock split has been  reflected as of January
         1, 2004 in the balance  sheet,  but activity for 2004 and prior periods
         has not been restated in those statements. All references to the number
         of common  shares  and per share  amounts  elsewhere  in the  financial
         statements  and related  footnotes have been restated as appropriate to
         reflect the effect of the reverse split for all periods presented.


                                      F-24
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                               September 30, 2006
                                   (Unaudited)



Note 12 - Common Stock Transactions (continued)
          -------------------------

         In connection with a Business Combination Agreement between the Company
         and MAC on May 10,  2005 (See Note 3), the  Company  issued  12,000,000
         post-split  shares to the MAC  shareholders  in exchange for all of the
         issued  and  outstanding  shares  of  MAC.  As the  acquisition  of MAC
         represented  an exchange of equity  interests  between  entities  under
         common  control,   the  equity   interests   issued  were  recorded  at
         approximately  $257,000,  representing  the net book  value of MAC on a
         historical  cost  basis as of January 1,  2005,  the  beginning  of the
         period  in  which  the  transaction  occurred.  The  effect  of the MAC
         acquisition  has  been  reflected  as of  January  1,  2004 to  provide
         comparable   weighted   average  per  share  amounts  for  all  periods
         presented.

         In  accordance  with the Letter of  Agreement  with MAC in March  2004,
         Loper &  Seymour,  P.A.,  an escrow  agent,  agreed  to return  338,883
         (84,720,733  pre-split)  shares to the Company.  The Company elected to
         cancel the shares.  The effect of this  cancellation  has been  applied
         retroactive  to January 1, 2004. On June 23, 2005,  the Company  issued
         400,000  post-split shares for legal services pursuant to certain Legal
         Services Compensation  Agreements.  Of these issuances,  300,000 shares
         were issued to the  Company's  former legal  counsel,  Mary F. Seymour,
         Attorney at Law.

Note 13 - Quasi-Reorganization
          --------------------

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

Note 14 - Series A Preferred Stock Financing Agreement
          --------------------------------------------

         In June 2006 the  Company  initiated  a  dialogue  with  Family  Access
         Exchange,  L.P. of Dallas,  Texas. Based on several subsequent detailed
         discussions  and the  completion of an initial round of due  diligence,
         the Company was offered a  non-binding  Term Sheet for up to a $200,000
         bridge financing in the form of Senior Subordinated Notes and available
         as needed  immediately  upon the  acceptance  and execution of the Term
         Sheet, and up to a $3,000,000  Series A Preferred Stock financing ("The
         Financing  Agreement").  The Term Sheet was  executed by the Company on
         July 27,  2006.  While the  Financing  Agreement is  non-binding,  both
         parties have agreed to an  exclusivity  period  limiting the  Company's
         ability to conduct  financing  discussions  with other potential equity





                                      F-25
<PAGE>


                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                               September 30, 2006
                                   (Unaudited)


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

         investors.  Closing of this  financing  transaction is dependent on the
         satisfactory  completion  of all normal and customary due diligence and
         other  routine  conditions  to close.  In  addition,  and as a specific
         condition  to the  closing of this round of  financing,  Family  Access
         Exchange, L.P. will require the Company to restructure all but $500,000
         of the current  promissory  notes and other short-term loans into notes
         with no less than a two-year maturity.

         Pursuant to this proposed Financing  Agreement,  the Company and Family
         Access Exchange,  L.P. executed an initial one-hundred  thousand dollar
         ($100,000) bridge loan on August 10, 2006 and an additional one-hundred
         thousand  dollar  ($100,000)  bridge loan on September  14,  2006.  The
         bridge notes mature  six-months from the date of issue, are convertible
         into Series A Preferred  at the face amount of the note upon closing of
         the Series A Preferred  Stock  financing,  and bear interest at 12% per
         annum to be paid in cash at maturity or conversion. Contingent upon the
         closing of the Series A  Preferred  Stock  financing,  the  Company and
         Family Access Exchange,  L.P. intend to convert the Senior Subordinated
         Notes to Series A Preferred Stock.

         While the Company  cannot  represent or provide any assurance  that the
         required debt restructuring will be achieved or that the financing will
         actually  close as  anticipated,  management  has  every  intention  to
         complete the conditions to close and  consummate  the financing  during
         the fourth calendar quarter of 2006.


Note 15 - Commitments
          -----------

         Consulting Contracts:

         The Company has contracted  with RJ Falkner & Company,  Inc. to provide
         consulting  services in regard to preparation of a Research  Profile on
         the Company, distribution of such reports,  identification of potential
         institutional   investors  and  other   matters   related  to  investor
         relations.  The contract is for twelve months,  continues monthly after
         January 15, 2006 unless  cancelled by either party.  Under the terms of
         the  contract FJ Falkner & Company,  Inc.  will be  compensated  $3,000
         monthly and will be issued 50,000 shares of MACC common stock.

         MACC  has  agreed  to  register  these  shares  with  the SEC  upon the
         registration  of  any  other  shares  or  within  twenty-four   months,
         whichever occurs first.

         Mortgage  Assistance  Corporation  has signed a Letter  Agreement dated
         September  1, 2005  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 MAC to provide legal




                                      F-26
<PAGE>

                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                               September 30, 2006
                                   (Unaudited)


Note 15 - Commitments (continued)
          -----------

         Consulting Contracts: (continued)

         and  business  Advice,  counsel  and  services in  connection  with the
         coordination of all legal matters of MAC,  including  coordination with
         special  securities  counsel  for S.E.C.  reporting  requirements,  and
         including  but not limited to  possible  private  placements,  mergers,
         consolidations,  recapitalization,  acquisitions or purchases of assets
         or equity  interest,  or similar  transactions.  The  agreement  had an
         initial term of six months with a minimum fee of $4,000 per month.  The
         agreement   automatically   extends   on  a  month  to   month   basis.
         Additionally,  provided  MAC does not  terminate  the Letter  Agreement
         during  the first  ninety  (90) days of its  duration,  Caolo  shall be
         entitled to additional compensation of equity in MACC ("Equity Fee") in
         the form of a common stock purchase warrant for three hundred seventeen
         thousand  (317,000)  shares  of common  tock of MACC for no  additional
         consideration  other  than an  exercise  price of ten cents  ($.10) per
         share.  Provided  Caolo  continues to serve MAC as its legal counsel to
         the  reasonable  satisfaction  of the  Board  of  Directors  and is not
         terminated for "good cause",  such common stock purchase warrant may be
         exercised according to the following schedule:


               1.   Fifty thousand (50,000) of such shares on the 91st day after
                    the execution of the Letter Agreement

               2.   Sixty-six  thousand  seven  hundred  fifty  (66,750) of such
                    shares after July 1, 2006

               3.   Sixty-six  thousand  seven  hundred  fifty  (66,750) of such
                    shares after December 31, 2006

               4.   Sixty-six  thousand  seven  hundred  fifty  (66,750) of such
                    shares after July 1, 2007 and

               5.   Sixty-six  thousand  seven  hundred  fifty  (66,750) of such
                    shares after December 31, 2007.

         On May 5,  2006,  the  Company  executed a letter  agreement  to retain
         Parkwood  Advisors,  L.L.C. as a  non-exclusive  financial and business
         advisor to MACC. Scope of the consulting  services  contemplated  under
         this agreement  include support with the  capitalization  and financing
         activities  of the  company;  turnaround  leadership;  use of cash  and
         investment  proceeds;  business  plan and  financial  projections;  SEC
         filings; and other special projects related to supporting the growth of
         the business including M&A,  compliance,  and internal business process
         improvements as mutually  agreed.  The agreement had an initial term of
         six months,  effective beginning as of March 21, 2006 with a fixed rate




                                      F-27
<PAGE>


                     Mortgage Assistance Center Corporation
                   Notes to Consolidated Financial Statements
                               September 30, 2006
                                   (Unaudited)


Note 15 - Commitments (continued)
          -----------

         fee of $7,200 per month. The Agreement automatically extends on a month
         to month  basis.  Fees  include a cash  retainer  payment of $3,000 per
         month, and $4,200 in deferred compensation per month which is to become
         payable upon the closing of a qualified  round of financing of at least
         $1,000,000. Under the terms of this letter agreement, Parkwood Advisors
         is also  entitled to additional  compensation  of equity in MACC in the
         form of a  common  stock  purchase  warrant  for one  hundred  thousand
         (100,000)   shares   of  common   stock  of  MACC  for  no   additional
         consideration  other than an  exercise  price  that  reflects a fifteen
         percent  (15%)  discount  from the actual per share trading price as of
         March 21, 2006.

Note 16 - Subsequent Event
          ----------------

         To facilitate the proposed Series A Preferred Stock Financing Agreement
         (See Note 14), the Company  subsequently  filed with the Securities and
         Exchange  Commission and mailed to its  shareholders a definitive  14-C
         Information Statement and Notice of Actions Taken By Written Consent of
         the  Majority  Shareholders  on  October  16,  2006.  This  Information
         Statement described the actions approved by the Company's directors and
         shareholders  on September  28, 2006,  including the  authorization  to
         issue up to 4,000,000  shares of Preferred  Stock,  and the adoption of
         the  Company's  2006 Equity  Incentive  Plan,  which  provides  for the
         issuance of a maximum number of 4,250,000 shares of common stock in the
         form of restricted  stock (1,062,500  shares),  incentive stock options
         (2,000,000 shares) and non-qualified  stock options (1,187,500 shares).
         The approval of these  actions by the Company's  shareholders  will not
         take effect until November 2006.


                                      F-28
<PAGE>

Item 2.  Management's Discussion and Analysis or Plan of Operation.

The following  discussion and analysis  should be read in  conjunction  with the
Consolidated  Financial  Statements  and  Notes  thereto,  and  other  financial
information  included  elsewhere  in this  Form  10-QSB.  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  reported  under the  heading  "Risk  Factors" in the
Company's annual report Form 10-KSB for the year ended December 31, 2005.

Business Overview:

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

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

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

Secondarily,  MAC generates additional revenue via servicing fees charged to its
various partnerships through which MAC maintains an equity ownership position in
a commonly owned note pool.  After the Company acquires a loan or pool of loans,
the process of resolution  begins with the borrower,  changing the status of the
non-performing  loans into either  performing  loans or  foreclosing on the real
estate.  The  Company  may  resell  a  portion  of its  re-performing  loans  in
various-sized  loan pools. The Company may foreclose on certain  properties when
loans held in its portfolio continue to be in default.  As a result, the Company
will be  engaged  in owning  single-family  dwellings  and  possibly  other real
estate. Such foreclosed real estate may be held,  rehabilitated where necessary,
and  sold.  The  Company  has  historically   sustained  recurring  losses  from
operations and had an accumulated  stockholders'  deficit and a working  capital
deficiency  as of  September  30,  2006.  The Company has  incurred  substantial
indebtedness,  including certain currently due and past due promissory notes and

<PAGE>

interest payments that the Company intends to restructure.  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-QSB.

Liquidity and Capital Resources:

As of September 30, 2006,  the Company  reports total  liabilities of $5,010,282
including  total  current  liabilities  of  $4,333,072,  minority  interests  in
investment  partnerships  of $544,706,  and  mortgages  payable of $70,004.  The
$544,706 in minority interests reflects the cash investments made by individuals
or third-party entities into various joint ventures,  single-purpose entities or
profits   participation   agreements  that  the  Company  actively  manages  and
materially  participates  in. The $70,004 in mortgage notes payable  consists of
one  mortgage  for a  residential  property  the  Company  has  acquired  and is
currently renting and servicing.

The majority of the  $4,333,072  in current  liabilities  is  attributed  to the
issuance of debt for the purpose of acquiring pools of  non-performing  mortgage
notes and properties. Historically, the Company has financed the purchase of its
mortgage notes 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. As of September 30,
2006,  notes payable to individuals  and others is reported at  $3,456,417.  The
following  itemization  of  notes  payable  provides  additional  detail  of the
Company's  current debt issuance  activities and its plans for restructuring and
extinguishing this debt. This discussion supplements and supports the additional
detail  provided in the Notes to  Consolidated  Financial  Statements  under the
heading "Note 8 - Notes Payable" and elsewhere in this Form 10-QSB:

         o        $1,480,136  of  the  total  notes  payable  is  attributed  to
                  non-interest  bearing loans from the minority interest partner
                  in one  of the  Company's  investment  partnerships,  MAP/MAC,
                  L.L.C.  Principal  from this note is to be repaid  through the
                  distribution of net proceeds derived from the sale of mortgage
                  notes  and  properties  owned by this  entity.  An  additional
                  $42,179 of the total notes  payable  amount is attributed to a
                  similarly structured profits  participation  agreement with an
                  individual  investor  who will be repaid from the  proceeds of
                  sales of the underlying jointly-owned assets when and if these
                  are sold.

         o        $200,000 of the total  notes  payable is  comprised  of Senior
                  Subordinated  Bridge Notes incurred pursuant to the Memorandum
                  Term Sheet for  prospective  financing  to be provided by FAX,
                  LP.  Subject  to the  closing of this  round of  financing  as
                  discussed in the  Company's  Form 8-K dated August 9, 2006 and
                  elsewhere in this Form 10-QSB,  the Company intends to convert
                  the Senior  Subordinated  Bridge Notes into Series A Preferred
                  Stock at the face amount of the notes.

         o        $208,000 of the total notes payable is comprised of promissory
                  notes  incurred  in the  formation  of a new,  single  purpose
                  investment  entity in which the  Company  controls  day-to-day
                  operations.  Terms of this  partnership  and its operating and
                  servicing   agreement   are   similar   to  other   investment
                  partnerships  the Company has  participated in. As of the date
                  of this  filing,  the  Company  had  extinguished  the  entire
                  $208,000  in  promissory   notes  by  virtue  of  new  capital
                  commitments  placed  into this  investment  entity,  Bluestone
                  Capital, L.L.C.

         o        The remaining notes payable of $1,526,102  consists of various
                  promissory  notes at  differing  interest  rates and  maturity
                  dates.  As of  the  date  of  this  filing,  the  Company  has
                  developed a proposed  restructuring  plan for these promissory
                  notes,  along with the  related  portion  of accrued  interest
                  payable.  The Company expects to implement this  restructuring

<PAGE>

                  plan in conjunction  with the  consummation of the prospective
                  equity financing agreement disclosed in the Company's Form 8-K
                  dated August 9, 2006 and elsewhere in this Form 10-QSB.

Separately,  as of September 30, 2006 the Company reports a total of $208,583 in
accounts  payable to trade  vendors;  an  additional  $250,887 in other  accrued
liabilities  primarily  consisting of accrued wages and consulting  fees; a Note
payable to a principal  of the Company  with a principal  amount due of $73,602;
and $143,583 in accrued interest payable.

During the nine months ended  September 30, 2006,  the Company issued a total of
$1,571,500 in new debt to individual  investors or investment  partnerships  for
the purchase of pools of mortgage notes. During this same nine-month period, the
Company paid $84,956 in interest or other charges on promissory  notes and other
loans, and repaid $496,615 in debts to individuals and  partnerships.  Most debt
issued to  purchase  pools of  mortgage  notes or  properties  is secured by the
actual mortgage loans or foreclosed real estate held in the Company's  portfolio
of assets.

The  Company's  continued  reliance  on debt  financing  has  been  required  to
adequately  establish its portfolio of mortgage notes and properties for resale,
to fund  operations  currently  being conducted at a net loss during a period of
ramp-up  and  infrastructure  build-out,  and to fund larger  transactions.  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.  While no lawsuits have
resulted from the currently  due or past due notes  payable,  the Company is now
attempting to restructure  this debt through  various means  including  securing
voluntary  extensions  with  additional  penalties  and interest to the Company,
securing  voluntary  conversions  to equity,  and  raising  additional  external
financing  to be  used  for the  express  purpose  of  restructuring  notes  and
providing working capital. These conditions are described in more detail in this
section and elsewhere  throughout  this Form 10-QSB and the  Company's  Form 8-K
dated August 9, 2006.

As of September 30, 2006, and as a result of the continued  operating losses and
the impact of the Company's business combination  transaction  described in this
section and  elsewhere in this Form  10-QSB,  the Company  shows an  accumulated
total stockholders' equity deficit of $(1,828,661).

As of September  30, 2006,  the Company lists cash on hand in banks of $211,899,
up from the $14,662  reported as of the  quarterly  period  ended June 30, 2006.
Total assets of $3,181,621  are recorded as of September  30, 2006,  which is an
increase of $479,659 in total assets over the three-month  period ended June 30,
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, if
any, of $2,670,309 net of an impairment reserve.  This represents an increase in
portfolio assets of $196,635 from the three-month period ended June 30, 2006. If
MACC's  portfolio  assets were to be stated on an  estimated  fair market  value
basis, the Company anticipates that its respective ownership percentage in these
portfolio  assets,  along with other real estate  assets  owned by the  Company,
would have an estimated fair market value of approximately $6,700,000.

During the third calendar quarter of 2006, the Company closed the acquisition of
several  pools of  mortgage  notes  from  various  sources.  These  acquisitions
included  mortgage  notes  acquired for the  Company's  own portfolio as well as
mortgage  notes   acquired   directly  by  the  Company's   various   investment
partnerships  for  their  respective   portfolios.   In  total,  these  combined
transactions  throughout the quarter included a total of 201 mortgage notes with
an estimated aggregate unpaid principal balance of approximately $7,883,170. The

<PAGE>

total aggregate  acquisition  costs,  including closing costs and administrative
fees, for notes acquired during the quarter were approximately $1,072,757.

Pursuant to a purchase contract executed in December 2005, the Company purchased
a 50% interest in a two-story office/warehouse building with 69,551 square feet,
and situated on 5.34 acres of land located at 999 Metro Media in Dallas,  Texas.
Pursuant to the terms of this agreement,  MAC is obligated for the entire amount
of this building's  monthly mortgage payment of approximately  $7,000 per month,
plus MAC is responsible for the servicing,  maintenance,  and management of this
property.  Additionally,  terms of the Company's  agreement  with its investment
partners in this  building  require the Company to  distribute  essentially  all
monthly lease revenues to the investment partners. Pursuant to a lease agreement
commencing  on May 19, 2006,  this "Class B" office / warehouse  facility is now
essentially  fully leased through April 30, 2007, with monthly lease revenues of
$17,500.  No assurance  can be provided  that the property will be leased beyond
April 30, 2007 or that if the property is leased  beyond  April 30,  2007,  that
rentals will be sufficient to cover  mortgage and  maintenance  expenses.  MAC's
investment in this  partnership is accounted for based on the equity method that
causes  MAC to report  the value as a cash  investment  in this  partnership  of
$79,165.

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.

Management's Plans to Raise Capital:

The continued operation of the Company will be largely influenced by its ability
to raise capital for the  restructuring  of debt,  acquisition of mortgage pools
and operating  expenses of the Company.  During the previous twelve months,  the
Company actively  pursued a multitude of discussions  with potential  sources of
equity  capital  from  various  investment  entities.  In June 2006 the  Company
initiated talks with Family Access Exchange,  L.P. ("FAX, LP") of Dallas, Texas.
Based on subsequent detailed discussions and an initial round of preliminary due
diligence,  the Company  received a  Memorandum  Term Sheet for up to a $200,000
bridge  financing  available  as  needed  immediately  upon the  acceptance  and
execution  of the  Memorandum  Term  Sheet,  and  up to a  $3,000,000  Series  A
Preferred Stock financing. The terms presented in the Memorandum Term Sheet were
considered by the management team to be in the best interests of the Company and
were formally  agreed to by the Company on July 27, 2006.  While the  Memorandum
Term Sheet is non-binding and subject to a definitive agreement,  the Company is
obligated to abide by an exclusivity period restricting the Company's ability to
conduct financing discussions with other potential equity investors. The closing
of this  transaction  with FAX, LP is subject to the completion of due diligence
to the  satisfaction  of FAX, LP, and the  negotiation  of a mutually  agreeable
definitive agreement to be executed contemporaneously at Closing. The Memorandum
Term Sheet requires that the Company restructure all but $500,000 of the current
promissory  notes and other  short-term  loans  into  notes  with no less than a
two-year  maturity.  While the Company cannot represent or provide any assurance
that the  required  debt  restructuring  will be achieved  or that the  proposed
transaction  will actually  close,  Company  management  expects to complete the
terms and conditions for a successful closing during the fourth calendar quarter
of 2006. Additional  information regarding the Memorandum Term Sheet is provided
in the Company's Form 8-K filing dated August 9, 2006.

Subsequent to executing the Memorandum  Term Sheet from FAX, LP, 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

<PAGE>

and foreclosed properties.  As of the date of this filing, these discussions are
proceeding  with the  consent and  cooperation  of FAX,  LP. The Company  cannot
represent or provide any assurance that a line of credit or other similar credit
facility will  successfully  be obtained.  Previously,  on October 20, 2005, the
Company executed two agreements with Mercatus & Partners, L.P. providing for the
purchase of a combined total of 1,532,568 shares of Common Stock (currently held
in escrow by the  investment  banking firm of Brown  Brothers  Harriman) and the
combined gross proceeds to the Company of $2,000,000  through a complex overseas
transaction involving a number of European banking institutions.  This agreement
is subject to and contingent upon a substantial  number of conditions beyond the
control of the  Company,  and as of the date of this  filing,  the  Company  has
received no funding  from these  agreements.  The Company can make no  assurance
that these  transactions will be completed in the foreseeable  future or at all.
In  addition to the  Memorandum  Term Sheet from FAX, LP  indicated  above,  the
Company  intends to leave the two  agreements  with  Mercatus & Partners,  LP in
place through the end of 2006.

Results of Operations:

Revenues

For the three  months  ended  September  30, 2006,  the Company  recorded  gross
operating  revenues of $1,234,589 and gross operating revenues of $2,133,913 for
the nine months ended September 30, 2006. Gross operating revenues for the three
months  ended  September  30, 2006 include  total sales of  portfolio  assets of
$1,073,470;  servicing  fees and  commissions  from  affiliates  and  others  of
$146,965;  combined with income from partnership  operations of $8,769 and other
miscellaneous  income of $5,385.  Considered on a net operating  revenue  basis,
which deducts the cost of portfolio assets sold, the Company reports $401,044 in
net  operating  revenues for the three months ended  September  30, 2006 and net
operating  revenues of $752,343  for the nine months ended  September  30, 2006.
Current  period  increases in the total sales of portfolio  assets and servicing
fees and commissions were positively impacted by the increased pool acquisitions
activity  and an  improved  business  process  for sales  management,  which was
developed and implemented over the prior three quarters.

Viewed on a  comparative  basis with the third  calendar  quarter  of 2005,  the
Company  demonstrates an increase of $737,618 in gross operating revenues in the
third calendar  quarter of 2006, for a 148% increase from the same period a year
prior. Comparing the Company's net operating revenues between the third calendar
quarter of 2006 versus the same  period in 2005  reveals an increase of $177,411
or a 79% increase in net operating  revenues in the current period over the same
period a year prior.

Operating Expenses

Total salaries, wages and contract labor expenses for the third calendar quarter
of 2006 were  $218,542  up  slightly  from the  $184,072  recorded in the second
calendar  quarter of 2006. This compares to total  salaries,  wages and contract
labor expenses of $242,501  incurred during the third calendar  quarter of 2005.
The Company anticipates  slightly higher salary and wage expense during the last
half of  2006,  assuming  the  close  of the  currently  contemplated  financing
transaction,  based  on the  need  to add  selected  strategic  hires  to  drive
additional sales.

Other  selling,  general  and  administrative  expenses  for the third  calendar
quarter of 2006 were  $175,013  compared to $217,093  for the  quarterly  period
ended June 30, 2006 and  compared to $233,943 in the third  calendar  quarter of
2005.  This reflects  normal and customary  SG&A  expense,  plus the  non-salary

<PAGE>

component of continued  investment in the  infrastructure  development  projects
described below.

Build-out of infrastructure  and capabilities to facilitate  substantial  growth
and profitability.  During 2005 the Company  concentrated on building a scalable
enterprise to achieve  efficiency and  profitability as the Company  anticipates
increased growth made possible by the expected new capital  financing planned to
be closed  during  the  fourth  calendar  quarter  of 2006.  Two major  internal
infrastructure  build-out  projects were  conducted  during 2005. 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.
This increased  transaction  flow and related  efficiencies are now beginning to
positively impact the Company's financial performance as demonstrated by revenue
growth while keeping staffing and general  servicing  expenses at or below prior
levels. These projects include the following:

1. The Affiliate Network.  The Company has recruited and cultivated a nationwide
network of individual and boutique  investors that serve as an important part of
MACC's ability to quickly resell its notes,  note pools,  and owned real estate.
At present the Company  maintains a network of approximately  2,500 investors in
approximately 37 states.  Going forward,  the Company will continue to build and
maintain  this  valuable  resource,  and will  increasingly  provide  additional
services on a for-fee  basis to  Affiliate  Network  investors  thereby  further
extending the Company's revenue model.

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

Net Loss

In spite of improved operating  fundamentals,  the Company recorded an operating
loss for the three months ended September 30, 2006, of $(95,851)  compared to an
operating loss of $(126,985) for the three-month  period ended June 30, 2006 and
compared to an operating loss of $(258,391)  for the third  calendar  quarter of
2005.  When  combined  with other income and expense and the impact of a loss on
minority  interests of $(63,047),  the Company realized a net loss of $(213,203)
for the third calendar quarter of 2006. This compares favorably to a net loss of
$(453,961) for the third calendar quarter of 2005. On a  weighted-average  basis
of the number of shares of common stock outstanding for the period,  this equals
a net loss per share of $(0.02) for the  three-month  period ended September 30,
2006,  compared  to a net loss per share of $(0.01)  during the second  calendar
quarter of 2006 and compared to a net loss per share of $(0.04) during the third
calendar quarter of 2005.

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

<PAGE>

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,  our portfolio asset value on our balance sheet
is recorded based on actual  acquisition costs, not the face value of the unpaid
principle of the notes  receivable or value of the  underlying  real estate.  If
assets  are  deemed  impaired,  those  assets  will  be  discounted  to the  net
realizable value.  This  conservative  approach does make it a little harder for
someone to see the underlying asset value.

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, and is not carried on certain low value properties.

Stock Options:

As of September 30, 2006 the Company did not have an employee stock option plan.
Pursuant to the proposed Series A Preferred Stock Financing  Agreement disclosed
in this section and elsewhere in this filing,  the Company  subsequently filed a
definitive  14-C  Information  Statement  and Notice of Actions Taken By Written
Consent of the  Majority  Shareholders  on October 16,  2006.  This  Information
Statement  described  the  actions  approved  by  the  Company's  directors  and
shareholders including the adoption of the Company's 2006 Equity Incentive Plan,
which  provides  for the  issuance of a maximum  number of  4,250,000  shares of
common stock in the form of restricted stock (1,062,500 shares), incentive stock
options (2,000,000 shares) and non-qualified stock options (1,187,500 shares).

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.

<PAGE>

Forward Looking Statements:

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

Quantitative and Qualitative Disclosures about Market Risk:

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

Item 3. Controls and Procedures

As of the end of the reporting  period,  September 30, 2006, the Company carried
out  an  evaluation,  under  the  supervision  and  with  the  participation  of
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
disclosure  controls and procedures pursuant to Rule 13a-15(e) of the Securities
Exchange  Act of 1934  (the  "Exchange  Act"),  which  disclosure  controls  and
procedures are designed to insure that information required to be disclosed by a
company  in the  reports  that it files  under  the  Exchange  Act is  recorded,
processed, summarized and reported within required time periods specified by the
SEC's rules and forms.  Based upon that  evaluation,  the Chairman and the Chief
Financial  Officer  concluded  that the  disclosure  controls and procedures are
effective  in timely  alerting  them to  material  information  relating  to the
Company required to be included in the Company's period SEC filings.

(b) Changes in Internal Control.

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

(c) Limitations.

Management,  including the Chief Executive Officer and Chief Financial  Officer,
does not expect that the 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

<PAGE>

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.
























<PAGE>

                                    PART II
                               OTHER INFORMATION

Item 1.  Legal Proceedings.

There are no material legal proceedings to report.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

N/A

Item 3.  Defaults Upon Senior Securities.

As of September  30, 2006,  the Company had a total of seven  promissory  notes,
with  maturity  dates that are past due or due by October 1, 2006.  These  notes
include various  interest rates and various  maturity dates ranging from January
31, 2006, through October 1, 2006. Cumulatively,  these notes represent $616,475
in  principal.  The Company  also lists other past due  liabilities  of $200,000
which  consists of a short-term  loan provided by an individual and which is not
structured  as a  promissory  note.  These notes are  secured for the  principal
amount with  portfolio  assets of the Company  consisting of mortgage  notes and
real estate  owned by the Company  that is  currently  for sale as a part of its
normal  and  customary  ongoing  operations.  As  a  condition  to  closing  the
prospective  capital financing  disclosed in the Company's Form 8-K dated August
9, 2006, and the Management  Discussion and Analysis portion of this 10-QSB, the
Company will be required to restructure all but $500,000 of its promissory notes
into terms with at least a two-year maturity.  No assurance can be provided that
the  Company  will be able to  successfully  restructure  its notes  payable and
successfully close the prospective capital financing.

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

On September 28, 2006, holders of 11,034,491 shares of the outstanding shares of
the Company's common stock approved (i) the amendment of the Company's  Articles
of  Incorporation  to  authorize  the  issuance  of up to  4,000,000  shares  of
preferred  stock and (ii) the adoption of the  Company's  2006 Equity  Incentive
Plan.  These actions are further  described in an  Information  Statement  first
mailed to the Company's stockholders on October 16, 2006.

Item 5.  Other Information.

None.

Item 6.  Exhibits.

Exhibit No.                       Exhibit Name

         Exhibit No.       Exhibit Name:

         10.1              Bluestone Capital, L.L.C. -Company Agreement,  August
                           25, 2006
         10.2              Bluestone  Capital,   L.L.C.   -Servicing   Agreement
                           Template
         31                Chief   Executive   Officer   and   Chief   Financial
                           Officer-Section   302   Certification   pursuant   to
                           Sarbanes-Oxley Act.
         32                Chief   Executive   Officer   and   Chief   Financial
                           Officer-Section   906   Certification   pursuant   to
                           Sarbanes-Oxley Act.

<PAGE>

                                   SIGNATURES


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

         November 14, 2006                MORTGAGE ASSISTANCE CENTER CORPORATION


                                           /s/ Dale Hensel
                                          --------------------------------------
                                          By: Dale Hensel
                                          Title: President, CEO, CFO
                                          (Principal Executive Officer and
                                          Principal Financial Officer)