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EPIC assigned its right, title, and interest as
purchaser under the rental purchase agreement with U.S.
Home to various limited partnerships of which it was
general partner. EPIC assigned its right to purchase 15
of the 142 properties to EA 84-III. On September 19, 1982,
EA 84-III purchased the 15 properties it had been assigned
for an aggregate purchase price of $908,700.
To finance its purchase of the 15 properties, EA 84-
III borrowed $863,250, approximately 95 percent of the
purchase price, from EMI. On the closing date, EA 84-III
executed 15 nonrecourse promissory notes in the aggregate
principal amount of $863,250, payable to EMI with monthly
installments of interest only for 5 years at the annual
rate of 14.625 percent. Thereafter, the notes required
EA 84-III to pay monthly installments of principal and
interest for 5 years. The full indebtedness was due and
payable on October 1, 1993.
Each nonrecourse promissory note was secured by a
deed of trust dated on the closing date. Most of the deeds
of trust were recorded either in the land records of Harris
County or Bexar County, Texas, or Pima County, Arizona. A
mortgage insurance company, Republic Mortgage Insurance Co.
(RMIC), issued a commitment and certificate of insurance
providing mortgage insurance for 25 percent of the first
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