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NOTES AND INTEREST RECEIVABLE
 9 Months Ended
Sep. 30, 2015
Receivables [Abstract]  
NOTES AND INTEREST RECEIVABLE

NOTE 3. NOTES AND INTEREST RECEIVABLE

 

A portion of our assets are invested in mortgage notes receivable, principally secured by real estate. We may originate mortgage loans in conjunction with providing purchase money financing of property sales. Notes receivable are generally collateralized by real estate or interests in real estate and guarantees, unless noted otherwise, are so secured. Management intends to service and hold for investment the mortgage notes in our portfolio. A majority of the notes receivable provide for principal to be paid at maturity. Below is a summary of our notes receivable (dollars in thousands):

        Maturity   Interest        
Borrower   Date   Rate   Amount   Collateral
Performing loans:                
        Foundation for Better Housing, Inc. (Overlook at Allensville) (1)     11 /19     12.00 %     2,472     Secured
        Foundation for Better Housing, Inc. (Vista Ridge) (1)     04 /19     12.00 %     3,923     Secured
        H198, LLC (Las Vegas Land)     01 /20     12.00 %     5,907     Secured
        One Realco Corporation (1) (2)     01 /17     3.00 %     7,000     Unsecured
        Realty Advisors Management, Inc. (1)     12 /16     2.28 %     20,387     Unsecured
        Unified Housing Foundation, Inc. (Cliffs of El Dorado) (1)     12 /32     12.00 %     2,097     Secured
        Unified Housing Foundation, Inc. (Echo Station) (1)     12 /32     12.00 %     1,481     Secured
        Unified Housing Foundation, Inc. (Inwood on the Park) (1)     12 /32     12.00 %     5,059     Secured
        Unified Housing Foundation, Inc. (Kensington Park) (1)     12 /32     12.00 %     3,936     Secured
        Unified Housing Foundation, Inc. (Lakeshore Villas) (1)     12 /32     12.00 %     2,000     Secured
        Unified Housing Foundation, Inc. (Lakeshore Villas) (1)     12 /32     12.00 %     9,096     Secured
        Unified Housing Foundation, Inc. (Limestone Canyon) (1)     12 /32     12.00 %     3,057     Secured
        Unified Housing Foundation, Inc. (Limestone Canyon) (1)     12 /32     12.00 %     4,663     Secured
        Unified Housing Foundation, Inc. (Limestone Ranch) (1)     12 /32     12.00 %     2,250     Secured
        Unified Housing Foundation, Inc. (Limestone Ranch) (1)     12 /32     12.00 %     6,000     Secured
        Unified Housing Foundation, Inc. (Parkside Crossing) (1)     12 /32     12.00 %     1,936     Secured
        Unified Housing Foundation, Inc. (Reserve at White Rock Phase I) (1)     12 /32     12.00 %     2,485     Secured
        Unified Housing Foundation, Inc. (Reserve at White Rock Phase II) (1)     12 /32     12.00 %     2,555     Secured
        Unified Housing Foundation, Inc. (Sendero Ridge) (1)     12 /32     12.00 %     5,174     Secured
        Unified Housing Foundation, Inc. (Sendero Ridge) (1)     12 /32     12.00 %     4,812     Secured
        Unified Housing Foundation, Inc. (Timbers at the Park) (1)     12 /32     12.00 %     1,323     Secured
        Unified Housing Foundation, Inc. (Tivoli) (1)     12 /32     12.00 %     7,966     Secured
        Unified Housing Foundation, Inc. (Trails at White Rock) (1)     12 /32     12.00 %     3,815     Secured
        Unified Housing Foundation, Inc. (1)     06 /17     12.00 %     1,261     Unsecured
        Unified Housing Foundation, Inc. (1)     12 /17     12.00 %     1,207     Unsecured
        Unified Housing Foundation, Inc. (1)     12 /15     12.00 %     2,665     Unsecured
        Unified Housing Foundation, Inc. (1)     12 /16     12.00 %     3,657     Unsecured
        Other related party notes (1)     Various       Various       2,080     Various secured interests
        Other related party notes (1)     Various       Various       1,420     Various unsecured interests
        Other non-related party notes     Various       Various       3,166     Various secured interests
        Other non-related party notes     Various       Various       503     Various unsecured interests
        Accrued interest                     7,099      
Total                         $ 132,452  
        Allowance for doubtful accounts                     (17,037 )    
Total                         $ 115,415  

 

(1) Related party note
(2) An allowance was taken for estimated losses at full value of note

Junior Mortgage Loans. We invest in junior mortgage loans, secured by mortgages that are subordinate to one or more prior liens either on the fee or a leasehold interest in real estate. Recourse on such loans ordinarily includes the real estate on which the loan is made, other collateral and guarantees.

At September 30, 2015, we had junior mortgage loans and accrued interest receivable from related parties, net of allowances, totaling $105.6 million. We recognized interest income of $9.4 million related to these notes receivables.

The Company has various notes receivable from Unified Housing Foundation, Inc. (“UHF”) and Foundation for Better Housing, Inc. (“FBH”). UHF and FBH are determined to be related parties due to our reliance upon the performance of the collateral secured under the notes receivable. Payments are due from surplus cash flow of operations of the properties. A sale or refinance of any of the properties underlying these notes will be used to repay outstanding interest and principal for the remaining notes for the specific borrower. These notes are cross-collateralized for the specific borrower, but to the extent cash is received from a specific UHF or FBH property, it is applied first against any outstanding interest for the related-property note. The allowance on the UHF notes was a purchase allowance that was netted against the notes when acquired.