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NOTES AND INTEREST RECEIVABLE
 3 Months Ended
Mar. 31, 2017
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 March 31, 2017 (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 %     9,100       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 %     1,011       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       782       Various unsecured interests
Other non-related party notes   Various       Various       3,466       Various secured interests
Other non-related party notes   Various       Various       4,658       Various unsecured interests
Accrued interest                   6,855        
Total Performing                 $ 138,733        
                             
Allowance for estimated losses                   (17,037 )      
Total                 $ 121,696        

 

 (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 March 31, 2017, we had mortgage loans and accrued interest receivable from related parties, net of allowances, totaling $121.7 million. We recognized interest income of $3.0 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.