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NOTES AND INTEREST RECEIVABLE FROM RELATED PARTIES
 6 Months Ended
Jun. 30, 2013
NOTES AND INTEREST RECEIVABLE FROM RELATED PARTIES [Abstract]  
NOTES AND INTEREST RECEIVABLE FROM RELATED PARTIES [TextBlock]

NOTE 3. NOTES AND INTEREST RECEIVABLE FROM RELATED PARTIES

 

Junior Mortgage Loans.    Junior mortgage loans are loans secured by mortgages that are subordinate to one or more prior liens on the underlying real estate. Recourse on the loans ordinarily includes the real estate which secures the loan, other collateral and personal guarantees of the borrower.

 

At June 30, 2013, we had junior mortgage loans and accrued interest receivable from related parties, net of allowances, totaling $25.7 million.

 

 

Our mortgage notes receivable consist of junior mortgage loans (dollars in thousands):

 

 

 

Maturity

 

Interest

 

 

 

Borrower

Date

 

Rate

 

Amount

 

Security

Performing loans:

 

 

 

 

 

 

 

 

Unified Housing Foundation, Inc. (Echo Station)

12/32

 

12.00%

 

             1,481

 

100% Membership Interest in Unified Housing of Temple, LLC

 

Unified Housing Foundation, Inc. (Lakeshore Villas)

12/32

 

12.00%

 

             2,000

 

Unsecured

 

Unified Housing Foundation, Inc. (Lakeshore Villas)

12/32

 

12.00%

 

             6,363

 

Membership interest in Housing for Seniors of Humble, LLC

 

Unified Housing Foundation, Inc. (Limestone Canyon)

12/32

 

12.00%

 

             3,057

 

100% Membership Interest in Unified Housing of Austin, LLC

 

Unified Housing Foundation, Inc. (Limestone Ranch)

12/32

 

12.00%

 

             2,250

 

100% Membership Interest in Unified Housing of Vista Ridge, LLC

 

Unified Housing Foundation, Inc. (Parkside Crossing)

12/32

 

12.00%

 

             1,936

 

100% Membership Interest in Unified Housing of Parkside Crossing, LLC

 

Unified Housing Foundation, Inc. (Sendero Ridge)

12/32

 

12.00%

 

             5,174

 

100% Membership Interest in Unified Housing of Sendero Ridge, LLC

 

Unified Housing Foundation, Inc. (Timbers of Terrell)

12/32

 

12.00%

 

             1,323

 

100% Membership Interest in Unified Housing of Terrell, LLC

 

Unified Housing Foundation, Inc. (Tivoli)

12/32

 

12.00%

 

             1,826

 

100% Membership Interest in Unified Housing of Tivoli, LLC

 

Accrued interest

 

 

 

 

             2,150

 

 

Total Performing

 

 

 

 

 $        27,560

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for estimated losses

 

 

 

 

           (1,826)

 

 

Total

 

 

 

 

 $        25,734

 

 

 

 

 

 

 

 

 

 

 

All are related party notes.

 

 

 

 

 

 

 

 

The company has various notes receivable from Unified Housing Foundation, Inc. (“UHF”).  UHF is determined to be a related party to the company due to our significant investment in the performance of the collateral secured under the notes receivable and its consulting agreement with our parent, TCI.

 

The loans mature on December 31, 2032 with interest rates of 12.0%.   Payments are due from surplus cash flow from operations, sale or refinance of any of the properties underlying these notes will be used to repay outstanding interest and principal for the remaining notes.  The allowance on the notes was a purchase allowance that was netted against the notes when acquired.  These notes are cross-collateralized to the extent that any surplus cash available from the sale or refinancing of the underlying properties.

 

As of January 1, 2013, the Company agreed to extend the maturity on the notes receivable from UHF for an additional term of five years for the early termination of the preferred interest rate period.  The original notes gave a five-year period of preferred interest rate at 5.25%, before returning to the original note rate of 12.0%.