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NOTES AND INTEREST RECEIVABLE
 9 Months Ended
Sep. 30, 2016
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 as of September 30, 2016 (dollars in thousands):

                
Borrower  Maturity
Date		   Interest
Rate		   Amount   Security
Performing loans:                  
H198, LLC (Las Vegas Land)   01/20   12.00%  $5,907   Secured
Leman Development, Ltd (2)   N/A    0.00%   1,500   Unsecured
One Realco Corporation (1,2)   01/17   3.00%   7,000   Unsecured
Oulan-Chikh Family Trust   03/21   8.00%   174   Secured
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%   3,933   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%   9,101   Secured
Unified Housing Foundation, Inc. (Limestone Canyon) (1)   12/32   12.00%   2,653   Secured
Unified Housing Foundation, Inc. (Limestone Canyon) (1)   12/32   12.00%   4,640   Secured
Unified Housing Foundation, Inc. (Limestone Ranch) (1)   12/32   12.00%   1,953   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%   2,272   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%   4,491   Secured
Unified Housing Foundation, Inc. (Sendero Ridge) (1)   12/32   12.00%   4,812   Secured
Unified Housing Foundation, Inc. (Timbers of Terrell) (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)   12/17   12.00%   1,207   Unsecured
Unified Housing Foundation, Inc. (1)   12/18   12.00%   3,994   Unsecured
Unified Housing Foundation, Inc. (1)   12/18   12.00%   6,407   Unsecured
Unified Housing Foundation, Inc. (1)   12/16   12.00%   2,657   Unsecured
Unified Housing Foundation, Inc. (1)   06/19   12.00%   5,400   Unsecured
Other related party notes   Various    Various    1,349   Various secured interests
Other related party notes   Various    Various    1,404   Various unsecured interests
Other non-related party notes   Various    Various    3,466   Various secured interests
Other non-related party notes   Various    Various    282   Various unsecured interests
Accrued interest             6,340    
Total Performing            $136,111    
                   
Allowance for estimated losses             (17,037)   
Total            $119,074    

 

(1) Related party notes.

 

(2) An allowance was taken for estimated losses at full value of note.

 

We invest in 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, 2016, we had mortgage loans and accrued interest receivable from related parties, net of allowances, totaling $112.4 million. During the nine months ended September 30, 2016, we recognized interest income of $14.5 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.