October 26, 2017 Comments (0) Blog, Current Investigations

United Mortgage Trust: SEC Seeks to Revoke Registration

United Mortgage Trust
(Last Updated On: October 26, 2017)

United Mortgage Trust Fails to File Periodic Reports

The White Law Group continues to investigate the liability that brokerage firms may have for recommending high risk non-traded REITs like United Mortgage Trust to investors.

United Mortgage Trust is a real estate investment trust (REIT). It invests primarily in lines of credit and secured loans for the acquisition and development of single-family home lots. Additional investments include lines of credit and loans secured by developed single-family lots and completed model homes. The company was founded in 1996 and is based in Grapevine, Texas.

According to SEC filings, on October 12, 2017, United Mortgage Trust (UMT) reported that the SEC will seek the revocation of UMT’s registration statement. United Mortgage Trust has reportedly failed to file periodic reports dating to September 2015.

The Trouble with Non-traded REITs

The trouble with non-traded real estate investment trusts (REITs) like United Mortgage Trust, is that they lack liquidity and are inherently risky. Compared to traditional investments, such as stocks, bonds and mutual funds, non-traded REITs are more complex. They are better suited for investors that can afford to risk the total losses of their investment.

Brokers often earn extremely high sales commission selling non-traded REITs, sometimes as high as 15%. Some broker dealers may find enough incentive from the high commissions to overlook suitability requirements.

Brokers are required to perform adequate due diligence on any investment they recommend. They must ensure that all recommendations are suitable for the investor and are in line with the clients risk tolerance, age, net worth, and investment experience.

If a brokerage firm makes unsuitable investment recommendations or fails to adequately disclose the risks associated with an investment they may be liable for investment losses through FINRA arbitration.

Free Consultation

Have you suffered losses investing in United Mortgage Trust? If so, the securities attorneys at The White Law Group may be able to help you recover investment losses. Please contact The White Law Group at (888) 637-5510 for a free consultation.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida. For more information on the firm, visit www.WhiteSecuritiesLaw.com.