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NOTES AND INTEREST RECEIVABLE FROM RELATED PARTIES
 9 Months Ended
Sep. 30, 2014
NOTES AND INTEREST RECEIVABLE FROM RELATED PARTIES  
NOTES AND INTEREST RECEIVABLE FROM RELATED PARTIES

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 September 30, 2014, we had junior mortgage loans and accrued interest receivable from related parties, net of allowances, totaling $24.9 million.  The loans mature in December 2032 and have interest rates at 12.0%.  As of September 30, 2014, we recognized interest income of $2.3 million related to these notes receivable.

    

Payments are due from surplus cash flow or sale or refinancing of the underlying properties.  These notes are cross collateralized to the extent that any surplus cash available from the 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.  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

 

Secured

 

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

 

 

 

 

             1,281

 

 

Total Performing

 

 

 

 

 $        26,691

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for doubtful accounts

 

 

 

 

           (1,826)

 

 

Total

 

 

 

 

 $        24,865

 

 

 

 

 

 

 

 

 

 

 

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