06-25-07 Special
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CITY OF RICHFIELD, MINNESOTA
MONDAY, JUNE 25, 2007
SPECIAL HOUSING AND REDEVELOPMENT AUTHORITY MEETING
RICHFIELD CITY HALL
COUNCIL CHAMBERS
6700 PORTLAND AVENUE
8:00 A.M.
AGENDA
Call to order
Roll call
1. Consideration of proposal for settlement of $12,995 deferred loan in amount of $8,000
for 6221 Sheridan Avenue
Staff Report No. 26
Notes:
Adjournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must
be made at least 96 hours in advance to the City Clerk at 612-861-9738.
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AGENDA ITEM #
REPORT #
1
26
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STAFF REPORT
RICHFIELD
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
JUNE 25, 2007
REPORT PREPARED By:
BRUCE P ALMBORG, COMMUNITY
DEVELOPMENT DIRECTOR
HAMH, TlnH
REPORT PRESENTER:
STEVEN L. DEVICH, EXECUTIVE DIRECTOR
DEPARTMENT DIRECTOR REVIEW:
NAMH, TinH
REVIEWED BY EXECUTIVE DIRECTOR:
ITEM FOR HRA CONSIDERATION:
Consideration of a proposed settlement of a Housing and Redevelopment Authority deferred
mortgage loan.
I. RECOMMENDED ACTION:
By Motion: Consider a proposal for settlement of a $12,995 Deferred
Loan in the amount of $8,000 for 6221 Sheridan Avenue.
I II. BACKGROUND I
On Monday, June 18, 2007 the Housing and Redevelopment Authority (HRA)
discussed the mortgage lien it has against the property at 6221 Sheridan Avenue.
The mortgage lien is for $12,995. The HRA agreed to accept $.75 on the dollar or
$9,746.
Attached is a letter from the lender dated June 21,2007. The letter is indicating
$8,000 is the maximum they are willing to pay the HRA or $.62 on the dollar.
The HRA lien dates from a Deferred CDBG Loan in 1995 for home repairs. The
Repayment Agreement requires the owner to live in the house for 30 years and it
will be forgiven. Short of 30 years residency it is due in full. The owner has
received an offer to purchase the property for $232,000 and wishes to accept that
offer to avoid foreclosure.
0625076221 Sheridan Avenue
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I III.
The owner is behind in mortgage payments. The original amount of the loan was
$215,000. The owner apparently owes more than that amount.
BASIS OF RECOMMENDATION I
I A. POLICY I
. The HRA acts to protect its financial interest.
I B. CRITICAL ISSUES I
. It is unlikely the HRA could recover the full amount of the lien.
I C. FINANCIAL I
. Should the property go into foreclosure the HRA would likely receive
nothing.
I D. LEGAL I
. Legal counsel has opined that the HRA has the sole responsibility for
agreeing to accept anything less than the full amount of the lien.
I IV. ALTERNATIVE RECOMMENDATION(S)
. Reject the proposal.
I V. ATTACHMENTS
. "Demand Letter" dated June 21, 2007
[VI. PRINCIPAL PARTIES EXPECTED AT MEETING
. N/A
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MORTGAGE SERVICES
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June 2],2007
Linda A. nOW(~rs
622] Sheridan A venUe S
RiChfield, MN .'):;423
RE: Lo~n numb~'r: 0099R7779/ (t11(: "LoHn")
Borrower/Seller: Linda A. Bowers
Propertyaddrcf>f:I: 6221 Sheridnn Aw;nue S. Richfield, MN 55423
To Whom It May Concern:
TJlil> will Gontinn thnr AMC MOrl:enge ScrvicC's ("AMen) will reconvey 1t$ first deed OflruGI recorded
ltgainst rhe above re!t~rc:nced Property provided thut. it receives from Ule g;:de of said Property no less Umn
$203,463.00 ani! ?lJ uf (hI; following conditions are wltisficd:
E$crow is to be Opened with cenificcl oopics of ljigncd Csc.:row ins1mctlons llnd aJ1llmeJldmcllt~;,
including un estimrncd ~;~t:tkmcnt st:lten1(;lH pl'cpnfcd by C~crow, 10 b~ fnrw~rded to my attention on
Or bdorc~ Il,.lJlf-:J..1~2002 refkcring tbe minllmtm pl)yrn~nt to AMC Mortgage Services of $203,463.(1)
net procl-cds and :;.ero proceeds to Borrowcr!i/Scllers.
Escrow mu~;t close and net pn,ct:cds mllS( be received on or hefore .Jnn~ 27, 2{!.Q1.
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Realtors Coommission not to exceed $11,000.00
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Tom] $ClIer's closing CO$L'l no! to exce<.-d $7.,31.1.00
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Toml Delinquellt t:lXCS nOt to exceed $1,223.00
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TotaJ Buyer's closing Gost~ not to exceed $6,900.00
Total puyoff to Ihe Cil:Y of Rit: h field nOl to exceed $8,000.00
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Borrowers/Sellers waive tht~ir rights to un)' escrow fund$ Utili any refunds fi'om prepn.id eXpCn$C~i.
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DorruwerslSe1Jers (HII partic:s On the AMC Mortgage St>.rvicellllnd D<:c;d of Tmst) must execute the
BOnR.OWm~ REPI~eSJ~Nl'AT.I~ Jetter cnelo:.cd find l'ettlm it to me by June 27. 2007.
BOITowersISellcnll'eprr;scl1t thel.t the salt: ohhi: Propcrty i!:l an arm'!;-lengtb trnnsocrion nnd
Bon'owcrs/Sellcr:; j:> not afl'jJiilted with rhe buyer.
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Every BOITow'~r (all panies on the AMCMorlgagc Scrvice~; and Deed of TruSt) mu~t (!xceute the
eJlclosed RELEASE, whicll THust be n,'miuf':d to me along with nORnOWF.R~
.BJj;PRF.1iKNTATION letter by June 27,2007. We will nol deliver the IccOnVeyance unless We have
a I\.llly executed Release. Original sign"lturc:> are r~llu;red.
505 City Parkway West. ~uite 100, Orllnge, CUJif(Hnla 92R68-4509 (gOO) 211 ,6926 "FAX (71 II) <J:lll-89.SS
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Page 2
June: 21, 2007
Linda A. BOwers
Loan No. 0099877797
. The reduced payoff is based on ::l ~H]t.:$ price of $232,000.00. Any COf':ts to close escrow arc to be
absorbed by the buyers n:nd sdlt:rs. AMC Mongl\g~ Services will not ac::cept anything less than the
$203,463.00 net proceeds mentioned above. Th_erc !ire to be nil pr()ce<~ds paid to, OJ" rctltjned by.
the J,orT'owersIScllcrs. All orot.;.\eds re~lallling are to he remitted to AMC Murtr.av.e Sc.~~
!Q. be ~1)flIi~d al!uinst SllIll'i Clwim! on the Loan.
At tht; close (If escrow, please fllT'Ward payuff funds .md ROO-l rmaI closing statement tu:
Lnm Trun
AMC Mortgage Services
50S City Parkway West
Suite 100
Orange, CA 92868
If the salt: of the property is not consummated in nccordancc with the conditions St::t f011h abuve, and
funds arc not received on (11' befon: June 27, 2007, this agreemem to accept le$s Ulan lht.' Iota] due On the
loan ptlr~wmt to the conditions herein will be of no further iOrcc: imd e1Tc:t;t: m,d AMC will eXt::rc:ise its
lull rightS and rcrncdje~ under the terms of the deed oftn.lS"l..
All parties are advised to di:>GllSS the possible tax rarn.ificmion5 of ~his tra.llSilctiol1 with thdr tax advisor.
.E9lJowiuf! n;ceiDt of the l'Imnnnt IjJ)ccifip.d, die loan will be reported to the credit bUrmlllS as
'l}~orcclosure RcdecJI1C!d/Short: S:t.!~~/st'ttl(:d" (nccount I(!t!Jlllv Imid ill full for less t~um tho fl~!l
hnlance).
Please direct a11 future inquiries and eOrrcfipondl;:tH.:e regarding thi:; Immer to my attention.
Sincerely,
Lam Tran
LOtlfl Mitigation Depart.'''nent
714-634w2474 extension 38736
949..862-3676 1'bc5imi1e
50S City l'llrkway We:;:, suite 100, Orange, Clllit'>rTlia 9286B-45()9 (SOO) 211-6926 .FAX (714) 634-8955