Summary of MORTGAGEBROKERS.COM HOLDINGS, INC.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

The following is management's discussion and analysis of the consolidated financial condition and results of operations of MortgageBrokers.com Holdings, Inc. for the periods ending March 31, 2009 and 2008. The following information should be read in conjunction with the consolidated financial statements for the periods ending March 31, 2009 and notes thereto appearing elsewhere in this form 10-Q.

Overview

MortgageBrokers.com Holdings, Inc. (the "Company", "MortgageBrokers.com", "we", "our", or "us") was incorporated under the laws of Delaware on February 6, 2003 as MagnaData, Inc. ("MagnaData"). In February 2005, we filed articles of amendments with the State of Delaware changing the name of our Company to MortgageBrokers.com Holdings, Inc.

Over the past three year period, sales operations were conducted through our subsidiaries in Canada only:

1. MortgageBrokers.com Inc. - an Ontario Canada provincially incorporated company that currently holds our licensure for operating as a mortgage broker in the Province of Ontario;

2. MortgageBrokers.com Financial Group of Companies Inc. - a Canadian federally incorporated company, which currently holds our licensure for operating as a mortgage broker in the Provinces of Newfoundland, Nova Scotia, New Brunswick, Prince Edward Island and Alberta; and,

3. MBKR Holdings Inc., a Canadian federally incorporated company, on November 24, 2008 for the intended centralization of back office services in Canada.

We established MBKR Franchising Inc., a Canadian federally incorporated company, on January 30, 2009 for the intended launch of MortgageBrokers.com as a franchisor in Canada.

As at March 31, 2009, we had 422 licensed mortgage agents operating across Canada. The number of mortgage agents in our national sales agency at the end of the reporting period represents a 14% increase over that of the same period in 2008.

As at March 31, 2009, our Company had 15 full-time employees and 2 full-time contract staff for a total of 17 full-time staff.

The Company's corporate offices are at 11-260 Edgeley Boulevard, City of Vaughan, Ontario, CANADA. Our current contact information for our Ontario office is telephone number: (877) 410-4848 and fax number: (877) 410-4845. Our internet website can be found under the domain name: www.mortgagebrokers.com. The Company also has a regional corporate office in Calgary, Alberta, Canada.

Results of Operations

Three months ended March 31, 2009 Compared to Three months ended March 31, 2008

Gross revenue in our first quarter in 2009 increased by 8% from that of 2008 to $2,581,556, which was directly related to increasing the number of sales agency mortgage agents by 14%, supporting our existing agent sales force to increase productivity and negotiating better lender commissions.

The Company's operating expenses increased in the first quarter of 2009 by 16% over the same period in 2007 to $2,579,878 as we built our growing business. The consolidated comparative increase is smaller in part due to a 19% decrease in the rate of foreign exchange between our first quarter in 2008 to that of 2009. The primary components that comprise our operating expenses and contribute to this trend are stock-based compensation, agent commissions, salaries and benefits, general and administrative expenses, and occupancy costs:

· Due to decreases in our stock price between reporting periods, the Company reported negative charges reversing accruals in employee stock-based compensation accrued during the reporting period of $26,179. The Company also reported negative charges reversing accruals for services associated with our agents, strategic alliances and consultants of a combined $58,738. Stock-based compensation is a charge that is based on our stock pricing at the end of the period. The accrual is valued based on stock prices at the end of the period, for which the Company has no direct influence; therefore it is difficult to analyze related trends. In aggregate, these charges were approximately 3% of the reported total operating expenses and decreased our reported Net Loss accordingly. It is the intent of management to continue using our stock-based compensation programs to maximize working capital and align the interests of our employees and mortgage agents with those of our shareholders.

· 80% of the operating expenses in the reporting period were associated with agent commissions. Reported agent commission fees as a percent of revenues decreased by 4% from the first quarter 2008 as compared to that of 2008 likely associated with changes in the foreign exchange rate between the periods.

· 15% of the operating expenses in the reporting period were associated with salaries and benefits. Salaries and benefits increased by 13% from the first quarter 2008 as compared to that of 2009 as we invested into hiring a more seasoned sales management team.

· 6% of the operating expenses in the reporting period were associated with general and administrative expenses. General and administrative expenses decreased by 36% from the first quarter 2008 as compared to that of 2009 as we reduced travel expenses by 70%, reduced telephone expenses through long distance plans by 30%, and had a 23% reduction in professional fees.

· Occupancy costs this period were relatively flat compared to 2008 wherein they decreased 5% from the first quarter 2008 to $37,283 in the first of 2009.

Liquidity and Capital Resources

As at March 31, 2009, we had $1,187,269 in cash; $14,826 of referral fees held in trust (which are awaiting completion of administrative agreements prior to being transferred to a ManuLife administered RRSP account owned by referral source agents), $40,775 in prepaid expenses, $107,109 in equipment and equipment under capital leases for a total of $1,349,979 in assets. Comparatively as at December 31, 2008, we had $1,262,321 in cash; $17,848 of referral fees held in trust, $116,211 in prepaid expenses, $114,608 in equipment and equipment under capital leases a total of $1,510,988 in total assets.

As at March 31, 2009, we had $1,060,397 in accounts payable, $104,014 in accrued liabilities related to services received but not invoiced as of March 31, 2009 and employee vacation accrual, $200,368 in loans payable to a related party, $227,423 in employee tax deductions payable, $225,191 in accrued stock-based compensation, $99,190 in bank indebtedness related to an unsecured term loan, $14,826 in trust liability associated with agent referral commissions payable awaiting transfer to the agent's Manulife RRSP account, capital lease obligations of $971 and $686,169 in accrued expenses associated with a legal judgment for a total of $2,618,549 in liabilities. Comparatively as at December 31, 2008 at the beginning of the reporting period, the Company had $1,190,905 in accounts payable , $68,210 in accrued liabilities, $129,425 in loans payable to a related party, $ 275,317 in employee tax deductions payable, $17,848 payable in a trust liability associated with agent referral commissions payable awaiting transfer to the agent's Manulife RRSP account, $1,624 in obligations under capital leases, $310,108 in stock-based compensation accrual, $117,385 in bank indebtedness related to an unsecured term loan and $688,894 in accrued expenses associated with a legal judgment for a total of $2,799,716 in liabilities.

Management makes the following comments regarding the most significant factors affecting Company liquidity and capital resources and their measured trends over the reporting period:

· Cash and cash equivalents did not materially change over the reporting period during the Company's seasonally slowest quarter.

· Accounts payable nominally decreased by 11% over the reporting period to $1,060,397. The bulk of this payable amount is Work in Progress payable following completion of mortgage agent origination compliance procedures. Work in Progress mortgage agent commissions payable typically have an Average Days Payable of 10 business days.

· The Company has accrued in 2007 for the liability of a partial summary judgment to a claim to which the Company is a party. The calculated judgment liability along with interest over the three month reporting period is, as at the end of the reporting period, $686,169. While the full amount of the judgment and associated interest was accrued, it is the expectation of management that only a portion, if any, of the liability will be satisfied by the Company in this multi-party judgment. See discussion below.

· Employee tax deductions payable decreased by 17% over the three months ending March 31, 2009 as the Company continues to pay this liability with monthly instalments. Company management has met with the government agency to whom the amount is payable and has established a working agreement whereby it is expected that this amount will be paid in full by July 2009. See discussion below.

The Company reported a Net Loss from operations for the first quarter of 2009, predominately associated with the period being the seasonally slowest period for our industry with respect to revenue while our costs remain relatively consistent. If we continue to grow at our current rate, it is expected by management that we will achieve consistent positive earnings from operations and should have adequate working capital for the near future to fund normal operations. In the event that we grow beyond our available working capital resources, experience a prolonged market down turn, are faced with a payout associated with the legal judgement described here-in or experience adverse seasonality, we will likely need to rely upon the issuance of common stock and additional capital contributions from shareholders and/or loans from shareholders and third-party lenders to meet our working capital needs. It is expected by management that the Company will need to rely upon either new capital contributions or profits from 2009 operations to pay the employee tax liability described below.

Employee Tax Deductions Payable

The Company is in arrears on the tax withholdings due to Canada Revenue Agency ("CRA") related to employee salaries. As at the end of the reporting period, the company had a tax liability with CRA of $227,423. The Company has negotiated an agreement with CRA which, if certain conditions are met, allows the Company to pay down the balance in monthly instalments of $10,000 through to June, 2009 with the remaining balance due in July, 2009. In the event that the Company secures further investment capital, the balance is to be paid off in full shortly after receipt of the funds. In addition, CRA has registered a Certificate in the Canadian Federal Court and the Property Register of Ontario for the amount owing to CRA. The liability currently bears interest at 9% annually.

Judgment in Lawsuit

On October 3, 2007 a partial summary judgment from the Ontario Superior Court ordered MortgageBrokers.com Inc., the Company's subsidiary, and other parties to pay the sum of CDN$598,636 within 90 days, along with interest in the amount of CDN$136,128 and legal expenses in the amount of CDN$8,907. See Item 2 below for more details. This judgment was appealed, but the judgment was upheld on appeal by the Ontario Court of Appeal on March 31, 2008 with costs for the appeal fixed at CDN $5,000. No decision has yet been made as to allocation of liability for the judgment among the parties, who are currently in settlement negotiations with a view to settling payment of the judgment as well as resolving all other claims outstanding between the parties. As at March 31, 2009, the Company has fully accrued for this lawsuit.

Critical Accounting Policies

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States ("GAAP"). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Revenue Recognition

Revenue consists of mortgage brokerage fees, finders' fees and insurance commissions. The revenue from brokerage fees and finders' fees are recognized upon the funding of a customer's mortgage and when the collection is reasonably assured which typically occurs when the brokerage fee or finders fees from the lender has been advanced. Insurance commission revenues are recognized when collection is reasonably assured which typically occurs when the insurance commission fees from the insurance provider has been advanced.

Share-based Payment

The Company adopted the disclosure requirements of SFAS No. 123R, "Share-Based Payment" ("SFAS No. 123R") for stock options and similar equity instruments (collectively, "options") issued to employees. The Company applies the fair value base method of accounting as prescribed by SFAS No. 123R. Under the fair value based method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. For stock options, the fair value is determined using an option-pricing model that takes into account the stock price at the grant date, the exercise price, the expected life of the option, the volatility of the underlying stock and the expected dividends on it, and the risk-free interest rate over the expected life of the option. SFAS No. 123R also applies to transactions in which an entity issues its equity instruments to acquire goods or services from non-employees. Those transactions must be accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable, as described in note 12.

Going Concern

The Company's consolidated financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the three month reporting period ended March 31, 2009, the Company incurred a Net Loss of $3,032 (as compared to Q1 2008, a Net Income of $160,229). Certain conditions noted below raise doubt about the Company's ability to continue as a going concern.

The Company's ability to continue as a going concern is contingent upon its ability to secure additional debt or equity financing, continue to grow sales of its services and continue to achieve profitable operations. Management's plan is to expand it's sales force to increase it's gross revenue, to carefully manage expenses and capital investment related to scalability to establish sustainable operational profitability through our rapid growth and to secure additional funds through future debt or equity financings. Current economic conditions may impact our ability to recruit mortgage agents or may result in changes by lenders to our commission fee schedules, both of which would have a negative impact on our revenue growth. Also, financing may not be available or may not be available on reasonable terms to the Company. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

Off-Balance Sheet Arrangements

None.