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07-16-07 Agenda . . . CITY OF RICHFIELD, MINNESOTA MONDAY, JULY 16, 2007 REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING RICHFIELD CITY HALL COUNCIL CHAMBERS 6700 PORTLAND AVENUE 7:00 P.M. AGENDA Call to order Roll call 1. Approval of minutes of (1) Regular HRA Meeting of June 18, 2007 and (2) Special HRA Meeting of June 25, 2007 2. HRA approval of agenda 3. Consent Calendar contains several separate items which are acted upon by the HRA in one motion. Once the Consent Calendar has been approved, the individual items and recommended actions have also been approved. No further HRA action is necessary. However, any HRA Commissioner may reguest that an item be removed from the Consent Calendar and placed on the regular agenda for HRA discussion and action. All items listed on the Consent Calendar are recommended for approval. A. Consideration of approval of Livable Communities Team/Richfield Rental Property Program contract with Julianne Schwietz from August 1 through December 31,2007 $.R. No. 27 B. Consideration of approval of cooperative agreement for funding and demolition of 7214 Cedar Avenue and 1710 78th Street East with City of Richfield S.R. No. 28 Notes: 4. Consideration of proposed settlement of deferred $14,000 loan within range of $1 ,700 to $2,500 at 901 Rae Drive Staff Report No. 29 Notes: 5. Consideration of staff direction for redrafting subordination and foreclosure policies Staff Report No. 30 Notes: 6. Executive Director report 7. Claims and payroll 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. . . . . . . AGENDA ITEM # REpORT # 3A 27 ..... STAFF REpORT RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY MEETING JULY 16, 2007 REpORT PREPARED By: BRUCE P ALMBORG, COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE REpORT PRESENTER: BRUCE P ALMBORG, COMMUNITY DEVELOPMENT DIRECTOR DEPARTMENT DIRECTOR REVIEW: NAME, TITLE REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration of Livable Communities Team/Richfield Rental Property Program contract from Auaust 1 throuQh December 31,2007. 1. RECOMMENDED ACTION: By Motion: Approve the execution of a Contract with Julianne Schwietz beginning August 1, 2007 for five months. I II. BACKGROUND I Julianne Schwietz has contracted with the Housing and Redevelopment Authority (HRA) for several years. In the beginning Julianne worked extensively with apartment owners, managers and staff on issues related to rental apartments; best practices for tenant screening and City Code Compliance. Julianne's responsibilities have shifted with the needs of the City. The City has experienced an increase in the number of smaller rental properties being owned and/or managed by people with little understanding of their rights and responsibilities. Much of the growth in rental property has been with single family homes. Often residents of these rental properties also lack knowledge of their rights and responsibilities. This past year Julianne has worked with Community Development and Public Safety staff to formulate and implement the Richfield Rental Property Program (R2P2). 071607 Julianne . . . . . . The current contract will expire July 31,2007. Public Safety has requested that Julianne be under contract until year's end to complete the tasks identified on the attached "Intention Statement". I III. BASIS OF RECOMMENDATION I I A. POLICY I . It is important that all forms of home ownership and all forms of tenancy be successfully integrated into the community. This integration is a hallmark of a viable community. I B. CRITICAL ISSUES I . Rental property is an important part of the housing supply in Richfield. A strategy for dealing with this issue is needed. I c. FINANCIAL I . The Contract would be for a five-month period not to exceed $6,250. This funding is accommodated in the 2007 Revised Budget, which is now being prepared for presentation to the HRA in August. I D. LEGAL I . The HRA standard form contract would be utilized. I IV. Iv. AL TERNA TIVE RECOMMENDA TION( s) . Delay approval. . Reject the proposal. ATTACHMENTS I . Proposed Intention Statement for August through December 2007. I VI. PRINCIPAL PARTIES EXPECTED AT MEETING . N/A . . . 3A-1 . Richfield Intention Statement for August 2007 - December 2007 Issue: Single-family property owners reIlting a portion of their home, or all of it, fall between the cracks of Richfield's rental property code, which covers dwellings of two (2) or more units. Owners renting their property are commonly unaware of laws that give them both rights and responsibilities. The one-year old Richfield Rental ProDertv Pro2ram (R2P2) works with homeowners and renters, to help them maintain healthy and safe standards through compliance and training. The following objectives will serve as ongoing efforts toward common goals. These include the following. . A. Change current occupancy ordinance and enforcement regulations. The City Council has approved R2P2s work toward rewriting a portion of the housing code in order to better regulate occupancy issues. . . B. Create Rental Property Owners Handbook for property owners and/or those who purchase single-family homes. (Or up to 14 units.) Educate our owners about renting their property. The majority of people who decide to rent a room or their home are unaware of the laws, rights and responsibilities for which they will be accountable. Included in this packet would be City expectations/ordinance information, resources for help, and invitations to available training. . C. Design training sessions specifically to meet the needs of single-family, duplex, and up to 14 units, rental property owners. Our Crime Free Multi- Housing training can be used as the basis of these sessions. The objective is to make this information readily and easily available so that owners will take the time to learn and understand how to productively and successfully rent their property. The City is interested in partnering with them in this endeavor. . D. Creatively design incentives for property owners to attend training or be otherwise educated through our efforts . . . . . . . AGENDA ITEM # REpORT # 'lR 1R ...... STAFF REpORT RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY MEETING JULY 16, 2007 REpORT PREPARED By: CHRISTINE COSTELLO, COMMUNITY DEVELOPMENT SPECIALIST NAME, TITLE REpORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: NAME, TITLE REVIEWED By EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration of a Cooperative Agreement for Funding and Demolition of 7214 Cedar Avenue and 1710 78th Street East with the City of Richfield. I. RECOMMENDED ACTION: By Motion: Approve Cooperative Agreement for Funding and Demolition of 7214 Cedar Avenue and 1710 78th Street East with the City of Richfield. I II. BACKGROUND I The Richfield Housing and Redevelopment Authority (HRA) owns the property at 7214 Cedar Avenue South. The building has been vacant since August 2006. The building has fallen into disrepair beyond normal maintenance (Le., roof leaking and exterior wall deterioration). The building at 1710 78th Street East, formerly known as the Normark Building, is owned by the City. In March 2007 the Lease Agreement with the former tenant, Metro Sales, was terminated due to the growing intensity of mold within the building and the expense of remediation. Since the lease termination, the building has been vacant. Neither property is part of a redevelopment project. 071607-Coop Agreement 1710 78th & 7214 Cedar . . . . In March 2007 both the City Council and HRA approved hiring Peer Engineering, Inc. (Peer) to write the demolition specifications for each property. The demolition specifications covering all aspects of the work (i.e. earthwork, backfilling, grading, and seeding) have been completed and the process for contracting the demolition work is prepared to move forward. It is proposed that the City spearhead the demolition work for both properties under a Cooperative Agreement for Funding and Demolition (Cooperative Agreement). Larger projects typically attract more competitive bids. In addition, combining the bids saves on administrative costs. The Cooperative Agreement for the parcels addresses the plans and specifications, payment, and right of entry. The work cannot proceed as proposed without the HRA and City Council's approval of the Cooperative Agreement. The City Council is scheduled to consider the Cooperative Agreement at its regular meeting on July 10,2007. . Advertisements for bids will be published in the Construction Bulletin on July 16, 2007 and the Sun Current Newspaper on July 19, 2007. The bid opening is proposed to be held on August 2, 2007 and site clearance should substantially be completed by mid-September 2007. I III. BASIS OF RECOMMENDATION I I A. POLICY I . A Cooperative Agreement with the City is necessary for site clearance to be undertaken by the City on HRA-owned property. . Minnesota Statutes, Chapter 469 and 471, set forth the requirements for letting contracts. . . In March 2007 the HRA and City Council approved Peer to write the demolition specifications for the properties that they respectively own. I B. CRITICAL ISSUES I . Not completing the demolition work of the two properties would cause the buildings to fall into further disrepair. They are not in a condition suitable for renting. . The HRA and City will still continue ownership of their respective properties. After demolition is complete both parcels will be seeded and all viable landscaping including trees will remain. . The HRA and City will receive more competitive bids if the HRA and City enter into the Cooperative Agreement. I C. FINANCIAL I . The demolition work for 7214 Cedar Avenue (HRA parcel) have been identified in the 2007 Revised Budget. The funds for the demolition of 1710 78th Street East (City Parcel) will be paid for using MSA funds because the property was purchased for the 77th Street project. . . . . . . . LEGAL I . Legal counsel prepared the Cooperative Agreement and reviewed the demolition specifications written for the properties by Peer. I IV. ALTERNATIVE RECOMMENDATION(S) I . Do not approve the Cooperative Agreement for Funding and Demolition of 1710 78th Street East and 7214 Cedar Avenue with City. . Require the City to undertake site clearance for its own property and the HRA for its own property. This option would delay the commencement of site clearance. !D. I V. ATTACHMENTS . Cooperative Agreement I VI. PRINCIPAL PARTIES EXPECTED AT MEETING . N/A . . . . . . $-1 COOPERATIVE AGREEMENT FUNDING AND DEMOLITION OF 1710 78th STREET EAST AND 7214 CEDAR AVENUE SOUTH Hennepin County, Minnesota This Agreement is entered into by and between the City of Richfield, a home rule charter city and political subdivision of the State of Minnesota ("City") and the Housing and Redevelopment Authority ("HRA") in and for the City of Richfield, Minnesota, a public body corporate and politic of the State of Minnesota with powers set forth at Minnesota Statutes, Chapter 469 and other laws (together, the "parties"). The purpose of the Agreement is, through exercise the authority conferred by Minnesota Statutes Section 471.59, to provide for the coordinated demolition of certain properties located at 1710 78th Street East (the "City Parcel"), and 7214 Cedar Avenue South (the "HRA Parcel"), and to address matters pertaining to the bidding, contracting and financing of the demolition work. 1. The Property. The Property consists of the separate parcels of land described in the attached Exhibit A. Exhibit A also contains the location and ownership of each parcel. 2. The Work. The Work consists of the demolition of the improvements located on the Property and includes all environmental remediation and utility disconnection as provided for in the approved plans and specifications for the Work. The Work will be ordered, contracted and overseen by the City. 3. Plans and Specifications and Other Documents. Not later than Effective Date of this Agreement, the City shall cause to be prepared detailed plans and specifications covering all aspects of the demolition of the improvements located on the Property. Once the plans and specifications have been prepared for the HRA Parcel, the HRA shall review and comment on such proposed plans and specifications. Approval by the HRA will constitute acceptance of such proposed plans and specifications. In addition to the plans and specifications, the City will prepare all bid and contract documents necessary for the Work. Such documents, must provide that the contractor will segregate in the bid and in the pay requests the costs and expenses for each of the two parcels, in such a manner as to allow the HRA and the City to accurately determine: (i) the portion of the bid amount allocable to the HRA parcel and allocable to the City 313138v2 JBD RC125-1 JBD-280959vl . . . . . . 38- d- parcel; and (ii) the portion of the actual payments allocable to the HRA parcel and allocable to the City parcel. 4. Payment. The contracts for the Work may provide for progress payments, or for a lump sum payment at the completion of the Work. The City shall be responsible for making all payments under the contracts for the Work. Provided, that the HRA shall have _ days from the date that it is provided the invoice for the portion of the Work allocable to the HRA Parcel to pay such amount to the City. The HRA represents and warrants to the City that it has sufficient funds immediately available and reserved for making all payments required to be made by it under this Agreement. The City shall provide the HRA with evidence showing that payment of such amounts has been made to the contractor. 5. Rioht of Entrv. The HRA hereby grants to the City, its agents, employees, contractors and invitees the right to enter upon the HRA parcel, for the purpose of carrying out the activities described in paragraph 2 above. As additional consideration for such right of entry, the City agrees to: (a) Permit the HRA's employees or consultants retained by the HRA to be present during the time any work is being done by the City under this Agreement. (b) Provide a copy of all test results, surveys and reports prepared by the City, or consultants or contractors evaluating the conditions present on the HRA parcel to the HRA as soon as reasonably possible following final completion thereof. (c) Dispose of all solid waste generated during the course of the City's activities on the HRA parcel. (d) Do the work in the shortest period time reasonably necessary to complete such activities authorized under this Agreement. (e) Use the HRA parcel only for the purposes described herein and not park or store any equipment thereon, except during the limited periods of time when the work under this Agreement is actually in progress. (f) Do no unnecessary damage to the HRA parcel. (g) Hold the HRA harmless from and indemnify it from any and all claims, damages, judgments or obligations, including the cost of defense of suit, 313138v2 18D RC125-1 18D-280959vl 2 . . . . . . 313-3 arising out of damage to HRA parcel or arising out of injury to anyone incurred or alleged to have been incurred in connection with or as a result of any work done pursuant to this Agreement, or as a result of the City's intentional torts or negligence.. (h) Fully pay and satisfy any claims for payment for work done on the HRA parcel and indemnify and, subject to the HRA's obligations hereunder, hold harmless Richfield from any claims based on failure to fully pay such claims. (i) The City's contractors which enter the HRA parcel pursuant to a contract to perform the Work and this Agreement shall carry insurance during the time any work is done on the HRA parcel in amounts and in coverages acceptable to the HRA. If the City removes a sample or portion of the HRA parcel, or improvements located thereon, for investigation, monitoring or testing or obtains any data or issues any report, it must give the HRA an equal amount of the sample or portion and a copy of any data or report, and must permit the HRA to perform an independent investigation, monitoring, or testing of the sample or portion. (j) 6. Effective Date. The Agreement is effective when fully executed by the parties. 7. Notices. Any written communication required under this Agreement shall be addressed to the other parties as follows, except that any party may change its address for notice by so notifying the other parties in writing: To the City: City Manager 6700 Portland Avenue South Richfield, MN 55423 To the Housing and Redevelopment Authority (HRA): Executive Director Housing and Redevelopment Authority in and for the City of Richfield, Minnesota 6700 Portland Avenue South Richfield, MN 55423 313138v2 JBD RC125-1 JBD-280959vl 3 . . . . . . 38-'-1 8. Waiver. A party's failure to insist on the strict performance of any obligation under this Agreement, or to exercise any option, remedy or right herein, will not waive or relinquish that party's right in the future to insist on strict performance of that or any other obligation. A party's waiver of a breach of an obligation of this Agreement will not be construed asa waiver of any subsequent breach of that or any other obligation. A waiver must be in writing and signed by the party. 9. Venue and Jurisdiction. This Agreement shall be construed under and governed by the laws of the State of Minnesota. The appropriate venue and jurisdiction for any legal action hereunder shall be Hennepin County, Minnesota. IN WITNESS WHEREOF, intending to be legally bound, the parties hereto execute and deliver this Agreement. CITY OF RICHFIELD: Housing and Redevelopment Authority in ' and for the City of Richfield, Minnesota: By: Its: Mayor By: Its: Chairperson By: Its: City Manager By: Its: Executive Director STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of , 2007, by Debbie Goettel and Steven L. Devich, the Mayor and City Manager, respectively, of the City of Richfield, a public body corporate and politic under the laws of Minnesota, on behalf of the City. Notary Public 313138v2 lBD RC125-1 JBD-280959vl 4 . . . . . . 38-5 STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of , 2007, by Suzanne M. Sandahl the Chair, respectively, of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA), a public body corporate and politic under the laws of Minnesota, on behalf of the HRA. STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of ,2007, by Steven L. Devich, the Executive Director, respectively, of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA), a public body corporate and politic under the laws of Minnesota, on behalf of the HRA. Notary Public DRAFTED BY: Kennedy & Graven, Chartered (JBD) 200 South Sixth Street,' Suite 470 Minneapolis, MN 55402 (612) 337-9300 313138v2 ffiD RC125-1 ffiD-280959vl 5 . . . . . . S 8,- f.t, EXHIBIT A LEGAL DESCRIPTION City Parcel 1710 78th Street East. Richfield. Minnesota That part of the North 180.26 feet of the South Half of the Southeast Quarter of the Southeast Quarter of Section 35, Township 28, Range 24, lying east of the West 722 feet thereof, except that portion thereof contained in the following described tract, to-wit: Beginning at a point in the East line of said Section 35, 383 feet North of the Southeast corner of said Section 35, 158 feet, thence West parallel with the East line of said Section 35, 150 feet; thence East parallel with the South line of said Section 35, 158 feet, thence South along the East line of said Section 35, 150 feet to the point of beginning. Together with all rights in and to any and all streets and alleys adjacent thereto, vacated or to be vacated, and together with any and all appurtenant easements, Hennepin County, Minnesota. HRA Parcel 7214 Cedar Avenue South. Richfield. Minnesota The South 70 feet of the North 260 feet of Outlot One, Elder Grove Fourth Addition, Hennepin County, Minnesota. 3I3138v2 JBD RCI25-I JBD-280959vI A-I . . . . . . AGENDA ITEM # REpORT # 4 29 ~ STAFF REpORT RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY MEETING JULY 16, 2007 REpORT PREPARED By: BRUCE P ALMBORG, COMMUNI'N- DEVELOPMENT DIRECTOR NAME, TITLE REpORT PRESENTER: BRUCE P ALMBORG, COMMUNITY DEVELOPMENT DIRECTOR DEPARTMENT DIRECTOR REVIEW: NAME, TITLE REVIEWED BY EXECUTNE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration of a proposed settlement of a Housing and Redevelopment Authority deferred loan mortgage. 1. RECOMMENDED ACTION: By Motion: Consider approval of a proposed settlement of a deferred $14,000 loan within the range of $1,700 to $2,500 at 901 Rae Drive. I II. BACKGROUND I The Housing and Redevelopment Authority's (HRA) Memorandum NO.6 dated February 6,2007 addressed the subject of a mortgage foreclosure on 901 Rae Drive (copy attached). The owner, with assistance from a realtor, was trying to sell the property to forestall the foreclosure. The HRA memorandum indicated that staff would not pursue action with the HRA to redeem because of negative conditions related to the property. The negative conditions could not be remedied by HRA action. The memo noted, that could mean the loss of the $14,000 lien (the second mortgage lien was provided in 1.987 to help make the unit affordable and is due upon sale. Copy attached). Early in Maya tentative closing had been set and a preliminary HUD closing statement prepared as there was a potential buyer (copy attached). It was a "short sale" meaning the parties with a financial interest in the property would not receive 071607 Deferred Loan Mortgage . . . . the full value of their interest. The HRA was scheduled to receive $2,500 for the mortgage (approximate $.18 on the dollar). The primary lender was to receive $.88 on the dollar. The HRA's position was subordinate to the primary mortgage. The proposed sale did not take place. The realtor for the owner may have another buyer. The realtor is requesting the HRA to agree to accept $1,700-$2,500 for the lien. Because of the passage of time and therefore increased indebtedness (additional monthly payments missed delinquent association dues for example) the primary lender may not accept the same numbers as established for the previous' potential sale. I III. 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 will be able to recover the full value of the lien. . If the HRA doesn't agree to a settlement number, a sale cannot transpire. . By establishing an acceptable range, the need for a special HRA meeting is minimized. . I C.. FINANCIAL I . A foreclosure would prevent the HRA from receiving any value for its lien interest. I D. LEGAL I . Legal counsel has opined that the HRA has the sale responsibility for agreeing to accept less than the full amount of the lien. I IV. ALTERNATIVE RECOMMENDATION(S) I . Establish different acceptable numbers. I V. ATTACHMENTS . HRA Memorandum No.6 . Certificate of Title . Preliminary HUD Settlement Statement I VI. PRINCIP AL PARTIES EXPECTED AT MEETING . N/A . . . . LJ --r I HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director j . February 6, 2007 SCANNED - HRA Memorandum No. 6 Housing and Redevelopment Authority Commissioners City of Richfield Subject: Notice of Mortgage Foreclosure Dear Commissioners: A Notice of Mortgage Foreclosure Sale has been received for 901 Rae Drive. The HRA provided a $14,000 deferred mortgage lien in 1986 to help make the unit affordable (901 Rae Drive is oneof two units in this structure). · Foreclosure Amount: . Estimated Market Value: · Delinquent Taxes:" . HRA Lien Amount: $157,646 $142,000 $-0- $14,000 This property is for sale. The listing agent provided the following information (the hope is to sell the house to payoff the debt). ~ · Asking price: . No. of days on market: $195;000 261 Reasons provided by realtor for lack of sale in order of importance: 1. Proximity to Super America; . 2. Very vertical design results in many steps (empty nester market is sensitive to steps) 3. The market does not equate Richfield with townhomes thus fewer potential buyers from which to draw. . 4. Virtually all of the wall surfaces are wallpapered. The wallpaper has absorbed cigarette smoke. The only way to eliminate this condition is wallpaper removal. The market response to the property would likely not change with HRA ownership. Staff will not pursue a Notice of Intent to Redeem which :Iikely means the loss of the $14,000. The owner is in contact with a nonprofit organization called Community Action Partnership for Suburban Hennepin (Commissioner Kirsch is a board member). They provide support services to people with foreclosure issues. The owner is very distraught. The sheriff's sale is scheduled for Wednesday, February 21,2007. The owner usually has up to six moths to redeem and may continue to reside in the property duri 9 that time. . SLD:cak . . . Transfer From Certificate Number: 689073 Originally registered the 21st day of June, 1916. State of Minnesota County of Hennepin Book: 42 P:;;lge:13429 Dist. Court No.: 1487 } 5.5. REGISTRATION Thls is to certify that Darlis J. Gray, 901 Ray Drive. City of Richfield, County of Hennepin, State of Minnesota is now the owner of an estate in fee simple . in the following doseribed land situated In the CQtmty of Henn,p.in\a'"dd\S~iJ[MMi;:;'r.;e5'C$l, to wit: ....,: \, \. ~..l~ ,'":., .~.......; ~... -~."'41 " ,...... Lot 2, Block 1, Rae 3rd Addition. ,.{ ,." ::-;.'. ~....~', :.~,.'.\L;-::' 'J..... .': :;'" ~~:';'~, '>" ..,,~ ..... ~':l. 'I. to' .. . .. "," ...,. .....~ : t ... "...t....1 ,10\ Subject to tile interests shown by the following memoriaISt;;\I:td:to.thl;l.fol!owhig rightli or ericumbraneas set forth in Minnesota statutes chapter 508, namely: ,I:>~t" .r::..1:I.:'~~r"~~ t'..: ......; M ..... "r, J ......~.....:~. .'CJ .. 'oJ <.~~-~;. .:.,:;>\ . .J' '. .....1'" -:t.. .^.. .. ~ ..... . J ." ~ \ I ... I'. ..". ../"' 1. Liens, claims, or rights arising under the 1;W~ 9"l'~'tlJe:c~~~~!ii.i~i~i'-ofthg:l:Jii'ite~ ~tltte:?,'.~l'\i,S!:l:.~h~.~tutes of thIs state r;annot reql.liretoappcarofrecord; .',j '::"t.:~.+:,",'~,,~':.~; . ,,~<~..I'.i'I"" \,.;," <'~. 2. AI1Y real property tax or special assessn,!~.~t .f.e[Whi~hl.;i!,~areEf the land has not'Ii~~~acl" a~j}j~ta.. of the certificate of title; 3. Any lease for a period not exceeding three yeai'$:1^'ben.th~rails actual occupation of:th~preml$e.s un'der the lease; 4 All . ht' bl' hi h th .--'d' .. In,",' .....~\."';....,..~""""o ~;f, ~ 11.,,' ,:,-...1, . rig $ 10 pu IC 9 ways upon e, afl I ~ ,!.4. ~-,;p-".~~'\ I: "v'!.~ ...~..;'~('J.;'<",,:.. . 7..J S.Such. right of appeal or ri~ht to appearj..g,nd COD.t~~t.t11e:'.ap.p~~':l~~!.-!S<!l[q~ct!Jy..:!a~~$ : . '~ . 6. The nghts of any person !" pos$es.slo1.l:'Pn~er deed'o~ c~~t~ct f?~Q~.s~f.'4'Mhfi~, ~e.~'<?t<th~ cartifieate 01 title; 7. Any outstanding mech<lnlcs lien rIghts-which may eXlst.U13!1&~~!f\l1esota st%t!,lt!t$l le1lls_5~.01 to~4.17. rl ';J. - '7 ,,~\"~ If t (....__L . ,.- - H . DarUs J. Gray is 18 years of age:q oldet,~?::~t .. . ~~}~Q,~;r-(o.~~~r1~paci~ \'-'. .. .~,?? .~I ~t,t~~, ~__.. l ~ ....... rI =.~M.._"". ,(:.,,_\ iii ~ ~ \.JII':',:. 1].....> "':".~- .~EM- "~R'J:" ..#--.\~-.. CI ~,:.....,' " ' ,*", -' \WI "I~" ~\'N "' - ~ I'" I I T\..t1i 11\1 _ \... Ll. .,... - - Nj \~ '.... .. ~ d'J.... """'Q' ........ Date of Regiilfratr6l1~t'I,.: ::;( ~'-;~.-:.. , . I- /- ~ '.\.~_""::.......""" ~""/.'1 . /.. '\t'tt v,. ~. ~)~,..... J!I P, .... J;.sr~~!Z) "'l~ I~ Month Day, Vea~ ,!,Jt"e~~I,:1': ~unJ:'~~i::='t" - - "'d~ ..;Y!;:"'. ~ ~.1:It-1nin9 in Favor of Jan 24.1986 05:0ct~J."\." (~'..~.fd~l'. . --Creatinp]o.ve~i . ~t:l~.i iOns. restrictions, $asElrnents. charges & liens Oct 27,1986 09:00 AM":>! i:::, <..;.. ":~-.p~...'{ ri~rT ~ . ~~P'A~5to'f?9..~~~'3~d193 Apr 07.1987 12;00 PM "~~:'?8,\9gQ.~0 Gi / Rdtli on~d.. ~j~1;tCial Corporation .....:.:..' :-'-r r ~. .aOI, 'MISl.... 14.000.00.... .1. il'if'l'l'ousing and Redevelopment Authority In and fOr the City of ichfield, Minne!rtoa (a MN munloipal corp) 'd'ifield MN Minnesota Housing Finance Agency l Paul, MN si n$ document no s . 1820157.0 CF National Bank, City of Minneapolis, State of Minnesota Housing and R.edevelopment Authority in "nd for the City of Richfield, Minnesota. Subordinating Mtge Doc. No. 1820158 to Mtge Doc. No. 34 7 See Inst) ."' '116,000.00 /' Mortgage Electronic R.egistration Systems. Inc., (a DE corp), P.O. Box 026 eit Of Flint Stste of Michi n ousing and Redevelopment Authority in and for the City of Richfield ubordinates Mt e Doc No 1820158 to Mt e DooNo 3578329 See Inst See Power of Atty Doc No. 3SS1829} atisfles document no 5 . 1820157.0 atisfies document no(s). 3406074.0 Document Number Document TYPe Declaration Amendment Mortgage Mortgage Mortgage Subordination A9reement Mortgage Apr 07.19137 12:00 PM ~ Jun 23,198712:00 PM JuI02.200111:00'AM Jan 30,200210;00 AM 50,000.00 Jul 24.2002 10:00 AM Jan 28,2003 03:09 PM Feb Q7.2003 04:00 PM Apr 22.2003 03:00 PM May 07.200412:00 PM May 07.2004 12:00 PM 1.938.92 .' e Homeowners Association. Inc., (a MN non'Profit corp) Rae Homeowners Association, Inc. requests NOtiCe re Foreclosure. Re. Doc. No. 1700193. Page 1 of 2 o~e6leeZ~9+ U9^el~ ~ ~p9UU9~-W01~ lo-oe-~o ~~e-~ 900/vOO'd llO-l Le:O~ ~~;_:._._.__.tI.'tl ..... ....::r..s...._ . . . SM. Cl of. Shoreview. Stat~ of Minnrts..o.t-"3 ousing and Redevelopment Authority in and for tho City of Richfield uborditlOltes Mtge. Doc. No. 1aZ0158 to Mlge. Doc. No. 4086341. (See Inst - ortgage Electronic Registration Systems. (nc. a DE: corp), PO Box 2026, City ot Flint, State of Michigan NC Mortgage, Inc., (a DE corp) P. O. Box 19666 i~ of Irvine State of Califomia ousing and Redevelopment Authority in and for the City of Richfield uboroinates Mtge. Doc. No. 1620158 to Mtge. Doc. NO. 4104680. (See' Inst . ," ! '.TV\$....a2ll.J~. National Association, trusteE!. do Chase Home Finance, LLC ~ ~ ,...",.'~: '\.::.' ~J~'19'~~~.~hjll ,8~m.aroO~~i~ ~san Diego, St8te of California .' ,.:""-;"""" :::, :... 81 n$'docl1me~s)~!~l!9.~ . 4340$8 Notice of Dee 27.2006 11:00 AM..' " Y ",.~.. ;~"".:. i: '-".,.: Re: Mtge-..Doc:No:..4'L04680 Pendency & .'< ',.'. (~'I ";" . '" '. .~ _-: 'h'e Public and" Ii' .;, '-/ '^ Power of Attorney ..,..:-..."....\:....:~ .,. :'. .~ -.Pcterson~~f'<lm.3nd'.aefgrhan, Artys to Freise /..>'. ::. 'J~' ..... ...-:....,.t"i. ..,J~. t'.;' U ,;,: ..~.,,'" t.;" ...J-" .....:.. -.. ..... ... :.... - -.... ....;' t:, .. ':" ",,.. .0' ."', ~"". '" ATS Indexes verified through January 19, 2007 ..':;:.'.:,..."'.J\ ... '(-1.:-" .....:. . {...?, r?9' :.....0....~:i5 IN WITNES;SfW.~{ERE6F,; Jiave hereunto subscribed lilY name /:;. ':"',' .0:' ...:.<~"'~{;~;.,\~..... and affixetcf(trre $"~al o(t;Ay office this 7th day of April, 1987. ;::7' ... .LL~~;.:.E t~::~:\~~).L.... , ____ .k1.:t::'::.::;~:~~~~::~l:..t:~ Ii t ': 1......J ~ ~~Ii """:':". _-~~ ~""""",';~~..!It..;.~.:.:r.:"\ I;' rl R ,,'-. t. ((~ ~~.J.~~~j~~~~~~R~' Dari:earlson 1......1 0 __..tl,~ ;'':I4.t..,\,,- _ (f fu-:::.., .::': ~~:" ...../". " W ~.. I · ..~_':. . ~..j f }::l-......~.....-:.li...~. r.:" tC.. "I . j-l o<l ;~-:-~:'\~ : ~~"::.:-t',.". .:~ ==- _ReglstJ1l'r1of Titles, , JA a ~~l"~J~~-W~'" ~ I~ l~ -_.0 to ' \....:.. .. ,::.~,.;=...~~t:fo'~'9.g~"'.~f.crot~ County. Qf;.;"He'r:inepin and State of Minnesota. ...... ~.. -- =::)--;;";'11. -- -ll~ f.~'~\'.: ........."".-....,. \:~.. <"J~: 0 ::=:-"'=J1:P;~'1',,;:,--- _ - .: R, ~., \'~.;f~ - -... ... A i~~ 1::.' 'I ". . Irrit-" .J..\~d.. -- .. ~.l' ? ~ .. \'~........ -.- 0, __'~~ l " ....L- '0(" ~ ~^'" .-t,?Oi'IC~!I..,.: -_ :-: .;Ii 1- \ . . "''''''-~.t'' Go ,~"'I"" d(Jlf) a. YtM.r- "'>. ;;r'~ ~" '<~'Ili:':~t~, ",.' 1./.... -l '!-- ..1;f,~' a 'I'll ,::, ~ll"h_lli .AI"," - r \::~~..~J'.~i/l>'it.:-;;::J\~:=3::.'(:~ l,._\.-;.~~~.:..~ ~ <.:.:.}... "" c}.vry \J Of- a.11, } n I~ rr" . '.. - - - :E:_'" Go a ,,4"~ ..~ .~< .,' 1- '. ". kl..rt.....,;..~.... ., ~ .. 'i :.~"^\1\. "'~, .....;l ...c /17 7 '\'jI' ~'\. .1t:.._.... ..0." .... v ~-rt ~1t.A~.. ,- '-;/ ~.r ('$/~ - -( --0 .:- '/.l, ....i...... <, Ii .!t~~r ~'...." U ~...J~ ~ .....:'). " ~ (!) CSM (lOriye d<>c-#- ~1!.?;~~:,~~~ . (9 US Jl4trt ~ 1V~i-t~ ,lkrc:;rC( fl;71~/ fru<f'7.e'.e../ % ch~ ~ 17~~ Ll- <Z (e..,.{' J",IU.e.- ~ r- /VI r, e. ~ G"- 41) 0 If 6 g--o) (jJ fl1:< It (/1/ ty. dc-c. 7/:... 18'"2 rJ f S't) rJJ p..,v/'..r J. Gy-,,, I fe-e. aW'1Wy- (6rtoL ~ If: ~V r!J ~ t:te. ~e<Ji.A/IW-rJ AJ'.Jo~hn1/ .~C.I /heE-fJ k- c-w~ ~~f<;) @ ~:r "';:'~;"~'Y 1= o-w~ N-d. ~ ~c:/ ~ ....wf 4" f1.d.A-fd( Iw- "'r-s- oy..e~ ~~ I.f.ar;t;} .. Document Number Document Typo Notice of P$ndency & Power of Attorney to Frdse Satisfaction of Mo a e Satisfaction of Association .,Uen Mortgage SlJl:JOtdinalion Agreement Mortgage 4104681 Subordination Agreement 43:36651 AsSignment of MortgOlQe . Date of Registration Month Day, Year Time May 17.2004 11 :00 AM ~ ..- :? Amount ($) Running in F:;Ivor of he Publio and Wilford & Geske Re Mtge Doc No 3578329 J<ln 24.2005 04:00 PM SatIsfies document no(s). 3578329.0 Feb 10.200512:00 PM Satisfies dOC\.lment no(s). 3957734.0 Mar 08.2005 01 ;00 PM ~ 124,475.00 Mar 08.2005 01 :00 PM Apr 21,200503:00 PM 153,200.00 Apt 21 ,2005 03;00 PM Dee 13,2006 12:00 PM ~~ltli.J "'~O Certificate Number: 697788.0 Page 2 of 2 tte-~ 900/900'd ,,0-1 Otee,eeZt9+ ue^eJ~ ~ ~peuue~-woJ~ se:ot ,0-oe-tO ..... .............,1: Q~;_:I..._'~..tld!!Ir..Dl . . . . . . f:.-e./,'m ,'\1 0"'7 A. Settlement Statement L{,-LJ u.s. Department of Housing and Urban Development OM B Approval No. 2502-0265 B. Type of Loan 1. [ ) FHA 2. [ ) FmHA 3. [ J Conv. unlns'16. File Number. 17. Loan Number: 18. Mortgage Insurance Case Number: 4. [ ) VA 5. [ ) Corn. Ins. 7-00664-PMR C. NOTE: This form Isfumlshed to give you a statement of actual settlement costs. Amounts paid to and by the settlement agent are shOVYTl. Items marked "(p. o. c.)" were paid outside of the closing: they are shown here for Informational purposes and are not included In the totals. D. Name and Address of Borrower - I E. Name and Address of Seller I F. Name and Address of Lender NICOLE LYLES DARUSJ. GRAY 901 RAE DRIVE ,MN RICHFIELD, MN 55423 G. Property Location H. Settlement Agent 901 RAE DRIVE, IBURNETTITLE RICHFIELD, MN 55423 Place of Settlement I. Settlement Dme 06/29/2007 COUNTY: HENNEPIN 5151 EDINA INDUSTRIAL BOULEVARD, Disbursement Date 06/2912007 PARCEL 10: 28028 24 14 0361 SUITE 500, EDINA, MN 55439 J. SUMMARY OF BORROWER'S TRANSACTIONS K. SUMMARY OF SELLER'S TRANSACTIONS 100. Gross Amount Due F rom Borrower 400. Gross Amount Due To Seller 101. Contract Sales Pri:e I 401. Contract Sales Price T $160,000.00 102. Personal Property I 402. Personal Properly I 103. Settlement Charges to Borrower I $0.00 403. I Adjustments For Items Paid By Seller In Advance Adjustments F or Items Paid By Seller In Advance 113. CityfTOVYTlTaxes 413. City/TOVYTlTaxes 114. County Taxes 414. County Taxes 828.5416 mos 612912007 to 71112007 $9,16 118. Assessments 418. Assessments 119. 419. 120. Gross Amount Due F rom Borrower I $0.00 420. Gross Amount Due To Seller 1 $160,009.16 200. Amounts Paid BY Or In Behalf Of Borrower soo. Reductions In Amount Due To Seller 201. Deposit or Earnest Money 501. Excess Deposits 202. Principal 502 Settlement Charges to Seller $17,325.67 203. Exl!llng Loan(s) Taken Subject to 503. ExlSllng Loan(s) Taken Subject to 204. 504. Payoff First Mortgage to Chase Home Finance LLC $135,183.49 Adjustments For Items Unpllid By Seller Adjustments F or Items Unplli d Bl( Seller 210. 510. Payoff to City of Richfield I1f<~ $2,500.00 211. 511. 212. 512 213. CityfTown Taxes 513. CttyfTown Taxes 214. County Taxes 514. County Taxes 218. Assessments 518. Assessments 219. 519. 221. 521. SeUer Paid Closing Costs $5,000.00 220. Buyer's Total Cred~s 300. Cash At Settlement From/fo Borrower 301. Gross Amount Due From Borrower (line 120) 302. Less Amounts Paid By/For Borrower (line 220) $0.00 520. Seller's Total Charges 1 600. Cash At Settlement Tolfrom Seller $0.00 601. Gross Amount Due To Seller (line 420) I $0.00 602 Less Deductions In Ami. Due To Seller (line 520)1 $160,009.16 $160,009.16 $160,009.16 I I 303. Cash ( ) From ( X ) To Borrower $0.00 603. Cash ( X )To ( ) From Seller $0.00 . . . . . . 7.00664 . PM R L. Settlement Statement L/-~ Page 2 700. Total Sale Cornnlssion 160000.00 @6 % .9600.00 DMsion of Commission (line 700) As Follows: Paid From Borrower's Paid From Seller's 701, $9600.00 to Coldwell Banker Burnet Funds At Settlement Funds At Settlement 702, Commission Selling 703, Commission pald at settlement $9,600,00 708, Broker Administrative Commission (Listing) to Coldwell Banker Burnet $395.00 800. ttems Payable In Connection wth Loan 801, Loan Origination Fee 802, Loan Discount 803, Appraisal Fee 804, Cred~ Report 805. Lender Inspection Fee 900. Items Required By Lender To Be Paid In Advance 901 ,Interest 902 , Mortgage Insurance Premium 903, Hazard Ins. Premium 1000. Reserves Deposited lMlh Lender 1001. Hazard Ins, Reserve 1002. M orlgage Ins, Reserve 1003. City Properly Taxes 1004. County Properly Taxes 101 O. AggregateAccounting Adjustment 1100. Title Charges I T I 1101. SettlementlCloslng Fee to BurnetTttle $280,00 1102. Abstract or Title Search to Burnet TItle $350,00 1103. Title 8I(amlnatlon to BurnetTttle $145,00 1104. Title Insurance Binder 1105. Document preparation . 1106. Notary Fee . 1107. Attorney Fee 1108. Tlfle Ins. Total . 1109. Lender's Coverage $ ($) 111 O. Owne~s Coverage $160000.00 ($) 1117. Recording Service Charge to Burnet TItle $50.00 1118. Courier Service and Processing Fee to Burnet Title $50.00 1123. Assessment Search and Review to Burnet Title $35.00 1200. Government Remmlng And Transfer Charges 1203. State Deed Tax 544.00 1207. Conservation Fees 1209, Release of Mortgage J CO R 1300 Additional Settlement Charges $544.00 $5.00 $92.00 1301. Survey 1302. Pestlnspeclion 1305.1 stll2 2007 RE TAXES to Hennepin County $1,657.08 1306, Assessments Certified to City $234.56 1307. Water BID ESTIMATE to City $250.00 1308. DelinquentAssoclallon duesto Standke Greene & Greenslein LTD $3,638.03 1400. Total Settlement Charges $0.00 $17,325.67 I have carefUlly reviewed the HUD.l Settlement statement and to the best of my knowledge and belief It Is true and ac curate statement of all receipts and disbUrsements made on my account or by me in thlstransacllon I further cert~y that I have receJved a copy of the HUD.l Settlement Statement. BUYERS SELLERS Nicole Lyles Darlls J. Gray The HUD-l Settiement Statement which I have prepared Is a true and accurate ace ount of this transaction. I have caused or win cause the funds to be disbursed In accordance with this statement. . Settlement Agent Date 0612912007 BURNET TITLE . . . . . . AGENDA ITEM # REpORT # 5 30 ...... STAFF REpORT RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY MEETING JULY 16, 2007 REpORT PREPARED By: VANESSA HAIGHT, HOUSING SPECIALIST NAME, TITLE REpORT PRESENTER: BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR DEPARTMENT DIRECTOR REVIEW: NAME, TITLE REVIEWED BY EXECUTIVE DIRECTOR: .,J ITEM FOR HRA CONSIDERATION: Provide direction to staff as they redraft the subordination and foreclosure policies. I. RECOMMENDED ACTION: By Motion: Discuss ideas for staff to consider as they redraft the subordination and foreclosure policies. I II. BACKGROUND I Attached are the existing policies related to subordination of mortgages and mortgage foreclosures. They were drafted when the experience of the Housing and Redevelopment Authority (HRA) with these matters was limited. Each is also a mix of policy and process. It would be appropriate to reconsider these policies because of the knowledge gained by experience and to separate policy from process. At the May 21, 2007 HRA meeting, some items related to the Mortgage Foreclosure Response Program were discussed. Since that discussion the HRA has raised additional questions and issues regarding mortgage foreclosure and subordinations. Please reflect on your experiences to date with these two matters as a member of the HRA and come to the meeting with some feedback and ideas. Specific questions from staff include the following: 061807 Foreclosure Guidelines . . . . 1. What should the role of the HRA be in mortgage refinancing? . Should the HRA limit the number of times it subordinates its lien? . If staff dedicates more time to subordinations (checking debt more thoroughly, etc.), should the subordination fee be raised? 2. Should the HRA subordinate to reverse mortgages? (By taking a subordinated position the HRA places itself ina secondary position behind the primary lender. The primary lender typically has the largest mortgage and usually insists that the HRA be secondary to it. A reverse mortgage is a loan against a home that is not due and payable during the life of the homeowner. It is a method for a homeowner over 62 years of age to convert their home equity into cash to be used to help pay living expenses. Upon the death of the homeowner the house is sold and the mortgage is paid off). 3. How should "short sales" be administered? (A short sale is a sale in which the proceeds fall short of what the owner owes on the mortgage(s). Some lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed when the owner cannot make the mortgage payments. Accepting a short sale isa means to avoid foreclosure.) . Should the HRA establish a range of values within which staff is to work or a specific number possibly necessitating special HRA meetings? . Should staff spend as much time on a short sale at $.01 per dollar as it spends on a short sale at $.85 per dollar? 4. When the HRA redeems a property through the foreclosure process how should a sale price be determined? . I III. BASIS OF RECOMMENDATION I I A. POLICY I . Following discussion, staff will draft a policy position to guide the program and the administrative process. The policy position will be presented to the HRA in the near future. I B. CRITICAL ISSUES I . A policy position will provide staff with the structure in which to administer the program. I C. FINANCIAL I . With these policies the HRA is attempting to protect its financial interests. I D. LEGAL I . John Dean, HRA legal counsel will be available at the meeting. I IV. ALTERNATIVEREcOMMENDATION(S) I . Do not discuss ideas for staff to consider when redrafting the subordination and foreclosure policies. . Delay the discussion. I V. ATTACHMENTS I . Mortgage Foreclosure Response Program Procedural Guidelines . Policy for Subordination Requests . I VI. PRINCIPAL PARTIES EXPECTED AT MEETING . N/A . . . . 5-1 Mortgage Foreclosure Response Program Procedural Guidelines This document has been developed as a guidance tool for program administration. This document should not be interpreted as constituting any contractual agreement or liability by the City or HRA. Statement of Purpose The goal of the Richfield Mortgage Foreclosure Response Program is to consider the various options when a property with a HRA mortgage interest enters foreclosure. Proaram Obiectives . To protect the HRA's mortgage interest. . To improve the housing stock for future homeowners. . To prevent foreclosure and keep homeowners in their home whenever feasible. Proaram Basics 1. After receiving a notice of foreclosure, staff contacts City Manager and HRA Chair. 2. Staff visits homeowner with information regarding foreclosure prevention. 3. Analysis on property, mortgage amount, foreclosure status, etc. is completed. 4. Decision is made to: purchase/rehab/sell, purchase/demolish/sell, or negotiate repayment of HRA lien. . . Redemption/Purchase 1. Redemption should only be pursued when a comfortable margin exists between the potential resale price and the estimated costs of redemption, rehabilitation, and sale. Rehabilitation 1. The purchased homes will be rehabilitated to meet the Point of Sale requirements. This level of rehabilitation will ensure a safe living environment for the future homeowner and conserve HRA resources. 2. Staff will coordinate the rehabilitation, with assistance from non-profit organizations as needed. Demolition 1. In some instances, the property in foreclosure may be a qualifying substandard dwelling that is in a condition that it should be demolished as substandard and by removal becomes a vacant lot for an affordable New Home or a Richfield Rediscovered home. Sale 1. Once the HRA purchases the property, the HRA will consider an offer from former owner to purchase the home back at market value. . 2. The rehabilitated homes, at a minimum, will be sold at a price to cover HRA costs. The HRA will decided the level of sale on a case by case basis (market-rate, 80% AMI, 60% AMI, etc.). 3. Staff will market the home for sale and facilitate the sale. The use of non-profit organizations or realtors may be used when needed. Legal counsel will be utilized during the resale process. 071607 Foreclosure Policy . . . . . . 5-'d- "Short Sales" 1. It is not unusual for a mortgage company to approach the HRA with an offer to buy the HRA's mortgage interest due to a "short sale". A short sale typically occurs under dire circumstances. In such sales, the lender lets the borrower sell the house for less than the outstanding loan amount, takes the proceeds and forgives any remaining overage. Banks are willing to do so because they often lose less on these deals than they do in foreclosures. Short sales are pre- foreclosure strategies that allow a homeowner to get out before foreclosure proceedings occur. 2. Staff will consider short sale offers and negotiate as high of repayment as possible. Action will be taken quickly as to not to disrupt the short sale opportunity and cause the homeowner to enter into foreclosure. . . . . . . 5-3 Policy for Subordination Requests Transformation, First-Time Advantage, Deferred Loan: When processing subordination requests, staff decides to approve or deny the request based on the loan-to-value ratio. Requests are approved as long as the loan-to-value ratio is 85 percent or below. If the loan-to-value ratio is above 85%, the request is denied. Staff receives a copy of the bank appraisal to determine the value of the property. A copy of the title commitment is also received to verify the new loan amount and current debts against the property. New Home/First-time Buyer homes: The same process is used with the following exception-staff re-verifies income. If the household income exceeds the limit of the program, the request is denied and the loan must be re-paid. Process for Subordination Requests When calls come in, send the person a subordination request form found under CDAdmin/Subord_Payoffs/Subord/Forms. They must fill out the form completely. The following items must be received: Request form Copy of Title commitment Copy of appraisal $50 processing fee Once you have the required documents, calculate the loan-to-value ratio. The title commitment tells you the total current debts against the property. The appraisal gives you the value. See "Policy" section above for limits. All subordination requests must be made by the end of the business day Wednesday. If any forms or documents are missing, the request will not go through until the following Wednesday, and will take an extra week to process. If all forms are turned in by the deadline, the subordination will be ready within a week. . . .