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NOTES AND INTEREST RECEIVABLE FROM RELATED PARTIES
 9 Months Ended
Sep. 30, 2019
Receivables [Abstract]  
NOTES AND INTEREST RECEIVABLE FROM RELATED PARTIES

NOTE 2. NOTES AND INTEREST RECEIVABLE FROM RELATED PARTIES

  

Notes and interest receivable from related parties is comprised of junior mortgage loans, which 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.

 

The Company has various notes receivable from Unified Housing foundation, Inc. “UHF”. UHF is determined to be a related party due to our significant investment in the performance of the collateral secured under the notes receivable. Payments are due from surplus cash flow from operations, sale or refinancing of the underlying properties. These notes are cross collateralized to the extent that any surplus cash available from any of the properties underlying these notes will be used to repay outstanding interest and principal for the remaining notes. Furthermore, any surplus cash available from any of the properties UHF owns, besides the properties underlying these notes, can be used to repay outstanding interest and principal for these notes. The allowance on the notes was a purchase allowance that was netted against the notes when acquired.

 

At September 30, 2019, we had mortgage loans and accrued interest receivable from related parties, net of allowances, totaling $13.6 million. As of September 30, 2019, we recognized interest income of $1.3 million related to these notes receivable. Below is a summary of notes and interest receivable from related parties (dollars in thousands):

 

    Maturity   Interest              
Borrower   Date   Rate     Amount     Collateral  
Performing loans:                          
Unified Housing Foundation, Inc. (Echo Station)   12/32     12.00 %   $ 1,481     Secured  
Unified Housing Foundation, Inc. (Lakeshore Villas)   12/32     12.00 %     2,000     Secured  
Unified Housing Foundation, Inc. (Lakeshore Villas)   12/32     12.00 %     6,369     Secured  
Unified Housing Foundation, Inc. (Limestone Ranch)   12/32     12.00 %     1,953     Secured  
Unified Housing Foundation, Inc. (Timbers of Terrell)   12/32     12.00 %     1,323     Secured  
        Total Notes Receivable                 13,126        
Accrued interest                 452        
Total Performing               $ 13,578        
                           
All are related party notes.