1. (a) Mortgages, notes secured by deeds of trust and other promissory notes which can be sold or discounted shall be included in the property reserve, except as specified in (b).
2. (b) A mortgage, or a note secured by a deed of trust, from the sale of real property owned by the applicant or beneficiary shall be considered other real property and subject to all the conditions placed upon other real property in these regulations.

3. (c) The market value of all mortgages and notes shall be the value as established in (1), unless the applicant or beneficiary chooses to meet the conditions of (2), and (2) is lower:

   1. (1) The principal amount remaining on the note.

   2. (2) The appraised value obtained by the applicant or beneficiary from a party qualified to appraise such items. Parties qualified to appraise such items include, but are not limited to, any of the following:

      1. (A) Banks.
      2. (B) Savings and Loan Associations.
      3. (C) Credit Unions.
      4. (D) Licensed loan or mortgage brokers.

4. (d) Proceeds from mortgages and notes shall be considered as follows:

   1. (1) The principal portion of the payment shall be treated as property.
   2. (2) The interest portion of the payment shall be unearned income and shall be included in determining the share of cost.

Note: Authority cited: Sections 10725 and 14124.5, Welfare and Institutions Code. Reference: Section 14006, Welfare and Institutions Code.

History

1. New section filed 5-6-81; effective thirtieth day thereafter (Register 81, No. 19). For prior history, see Registers 81, No. 15; 80, No. 48; 77, No. 51; 77, No. 17; and 77, No. 5.

2. Editorial correction of Note filed 1-21-83 (Register 83, No. 4).