HomeMy WebLinkAbout2007 Ordinance No. 068•
•
•
ORDINANCE NO . /t!._
SERIES OF 2007
BY AUTHORITY
COUNCO.. BO..L NO . 71
INTRODUCED BY COUNCO..
MEMBER MOORE
AN ORDINANCE AUTHORIZING THE REDEMPTION AND SALE OF PROPERTY
ACQUIRED THROUGH THE HOUSil•IG REHABO..IT ATION FUND LOCATED AT 2397
WEST HARV ARD AVENUE IN THE CITY OF ENGLEWOOD, COLORADO .
WHEREAS , the City Council of the City of Englewood accepted assignment from the
Englewood Housing Authority of all rights, assets and liabilities associated with the Housing
Rehabilitation Loan Program by the passage of Ordinance No . 23, Series 1999 ; and
WHEREAS, Englewood Cit y Council authorized amending Title, 4, Chapter 3, with the
addition of a new Section 13 entitled "Housing Rehabilitation Fund" by the passage of Ordinance
No. 26, Series 1999; and
WHEREAS, the Englewood Housing Rehabilitation Program was created in 1976 to preserve
the existing housing stock in Englewood and to address the problems of low-income families with
the financing of major household repairs; and
WHEREAS , the Rehab Program approves home impro ve ment loans that arc secured by deeds of
trust reco rded on the propcny representing generally second or third mo ngagcs ; and
WHEREAS , occasionally homeowners default on their loans and the lien holder initiates the
foreclosure process by filing the required documents with the Public Trustee's Office; and
WHEREAS, !he propcny located at 2397 West Harvard Avenue was acquired by the City of
Englewood through the foreclosure process; and
WHEREAS , this propcny went to public sale on August 8, 2007 , and the propcny was sold
back to the first mongagee who initiated the foreclosure; and
WHEREAS , the Englewood Rehab Loan Committee was consulted at their September, 2007
meeting and they recommended filing the Intention to Redeem Notice with the public Trustee's
Office ; and
WHEREAS, the homeowner failed to redeem the propcny, within their 75-day redemption
period; and
WHEREAS, the City (the second mongagee) was notified on October 23, 2007 of the amount
needed to redeem the propeny no later than November 1, 2007; and
WHEREAS , the City redeemed the property on October 31, 2007 and requested that the deed be
issued to the City of Englewood Housing Reha bilitation Fund ; and
11 bi
WHEREAS , the redeemed property located at 2397 West Harvard Avenue will be 10ld to a
private owner-<>CCUpied party who bu secured his own financing and the City funds used to •
purchase the property will be returned to the Housing Rehabilitation Fund when this property ia
10ld and the new ownu'a loan is cloaed; and
WHEREAS , if an offer to purchase is r..,;;j v.'d from any City employee, their family members,
or any business in which a City employ.., has a fuuu,ci •I interest, the offer will be submitted to the
Englewood City Co1tncil for approval;
NOW, f}{E RE FC'f! !:., E IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
ENGLEWOOD , COLORADO , AS FOLLOWS :
~~-The City Council of the City of Englewood hereby authorizes the redemption and
subseq uent sale of a Ho using Rehabilitation Property acquired through the foreclosure process
iocated at 2397 We,. fj ,rvard Avenue .
~ The Ma , rand the City Clcrk arc authorized to execute the proper form of deed for
the conv~yance ofth property located at 2397 West Harvard Avenue, Englewood, Colorado
pursuant to Section 1 I of the Englewood City Charter .
lntrod uC6J, rea d in full , and passed on first reading on the 19th day of November, 2007 .
Published as a Bill fo r an Ordinance on the 23"' day of November, 2007 .
Read by title and passed on final reading on the 3rd day of December, 2007 .
Published by title as Ordinance No(/l Series of 2007 , on the 7th day of December, 2007 .
I, Loucrishia A. Ellis , City Clcrk of the City of Englewood, Colorado, hereby certify that the
above and foregoing is,a JI:!• copy of the Ordinance passed on fina l reading and published by
,._.~-,;Smo,r,oo, ~~✓-~
Loucrishia A. Ellis
•
•
•
•
•
COUNCIL COMMUNICATION
Date: Agenda Item: Subject:
November 19, 2007 11 a i Redemption and Sale of Property acquired through
the Housing Rehabllltation Fund
Initiated By: I Staff Source:
Community Development Department Janet Grimmett, Housing Finance Specialist
COUNCIL GOAL AND PREVIOUS COUNCIL ACTION
Council passed Ordinance No. 23, Series 1999. accepting assignment from the Englewood Housing
Authority of all rights, assets and liabilities associated with the Housing Rehabilitation Loan Program
and also passed Ordinance No. 26, Series, 1999, amending Title 4, Chapter 3, by the addition of a
new Section 13 entitled "Housing Rehabilitation Fund ".
In 2005 and 2006, Council passed fi ve ordinan ces approving redemption and sal ,, .: five other
properties acquired through the foreclosure process.
RECOMMENDED ACTION
Staff recommends Council approve a Bill for an Ordinance for the redemption and subsequent sale
of 2397 West Harvard Avenue (a single family home) acquired through the foreclosure process as
defined by Colorado State Statutes.
BACKGROUND, ANALYSIS, AND ALTERNATIVES IDENTIFIED
The Housing Rehabilitation Program was created in 1976 by the City of Englewood to preserve the
existing housing stock in Englewood, and to also address the problems that homeowners
experience with the financing of major household improvements. The City Attorney required that
the new Housin g Rehab Program not be administered directly by the City to avoid any conflicts
with a State Statute that prohibited any municip • government from making loans to its cit izens . It
was decided to use the Englewood Housing Authority (EHA) as the conduit to manage and operate
the Program.
The legal authority to operate and manage the Rehab Program was assigned to the City in 1999
through an agreement with the EHA. It was determined at that time that the Program and city staff
should be under the direct management of the Community Development Director. In order to
avoid any conflict with Colorado State Statutes, an ente rp rise fund was created under TABOR
regulations known as the Housing Rehabilitation Fund (Fund). The Rehab Program retained its own
funding sources designated as Fund 45 and Fund 46 that are used to support the operations of the
Program .
One of the functions of the Fund Is to redeem properties that have gone through the foreclosure •
process . The Housing Rehabilitation Loan Program approves home ,.nprovement loans that are
secured by deeds of trust generally as second or third mortgages 0unior liens). The procedures of
the Program require staff to have all foreclosures reviewed by the Rehab Loan Committee (RLC)
after the property has been sol d at a public sale. The RLC consists of 3 members, currently : 1)
Barbara Singer, US Bank; 2) Christine Hart, Accountant, City of Englewood Accounting
Department ; and 3) a low-income homeowner and Englewood resident (position cu rrentl y vacant).
The foreclosure process is the primary tool for lenders to us e to insure repayment of their loans .
When a home owner defaults, the lien holder is able to initiate the foreclosure process to collect the
monies that are owed to them. This process is started by filing the required legal documents with
the Public Trustee 's Office . This filing triggers a whole sequence of even ts th ~t is dictated by State
Statutes . The Public Trustee wi ll set a Public Sale date for the property and p blish this information
in a newspaper of general circula ti on for a minimum of four we eks . Each r corded lien holder
recei ves a copy of that ad vertisement as well as a Public Trustee 's Notice of Rights to Cure or
Redeem . Each junior lien holder must file a Notice of Intention to Redeem within 60 days of th e
Public Sale date if they are interested in redeeming the property to collect their ow n indebtedness .
If the Intention to Redeem is not filed, then the lien holder los es their rights under the deed of trust
provisions and the property is no longer collateral for their loan .
The homeowner can cure the default any time from the initial notification through the 7S-day
period following the Public Sale . This time frame represents approximately a four -month time
period . If th e hom eow ner redeems the property, then the foreclosure pro cess is ended and there is
nothing the junior lien holder is required to do . All liens rema in in fu ll effect. If the homeo wne r
does not redeem within the 7S-day time period, the first junior lien holder has 10 days from that
date to act on their Intention to Redeem and to pay the Public Trustee's Office the total redemption
amount in certified funds . Each subsequent junior lier, holder then has S da ys in which to redeem .
This means that a junior lien holder will not know if they need to act on their Intention to Red ee m
until the hom eow ner', redemption period has expired and then onl y when notified by the Public
Trustee as to the amount necessary to redeem the property.
Given the very short time frame of the junior lien holder redemption period , properties redeemed
through the Housing Rehab Program are always brought to the Council aftP.r the fact for or~i:iance
approval. Sectio n 72 of the Home Rule Charter requires that re.•I µroperty may be sold, but only by
ordinance , not using the emergency provision . Each property is brought before Council as early in
the process as possible so that marketing efforts can begin . This process will expedite the
subsequent sale and closing of the property .
•
The initial foreclosure 1otification for 2397 West Harvard Avenue was received in June 2007 . The
Public Sale was set fo• August 8, 2007. The property was sold back to the first mortgagee who had
initiated the foreclosure . The RLC was consulted at their September 2007 meeting and they
recommended fi ling the Intention to Redeem notice with the Public Trustee 's Office. That notice
was filed later in September. The homeowner 's final redemption date was October 22 , 2007 . As
the only junior lien holder to file an Intent to Redeem , the City of Englewood was notified on
October 23 , 2007 by the Public Trustee's Office of the exact amount needed to redeem the
property no later than November 1, 2007. A wire transfer from Housing Rehabilitation Fund 46
was sent on October 31 , 2007 to the Public Trustee's Office. A letter requesting that a Public
Trustee 's deed be Issued in the name of the City of Englewood-Housing Rehabilitation Fund was
hand delivered on Noveml>er 2. A Publi c Trustee ·~ De ed was electronically filed and was recorded •
on November 6, 2007 at Reception #87142029.
•
•
•
The property will be listed for sale as soon as a ,taff lnsperllon has been completed and any
necessary repairs have been made. The property will be sold to a private owner-occupied party
who has secured their own permanent financing. The proceeds from the sale of the property will
be returned to Housing Rehabilitation Fund 46 . If an offer to purchase the property Is received
from any City of Englewood employee, their family members, or any business In which a City
employee has a financial lnteres~ then staff will submit the offer to City Council for approval.
FINANCIAL IMPACT
Fund 46 will cover all costs of the redemption and the subsequent sale of 2397 West Harvard
Avenue . There are no other financial Impacts to the City .
LIST OF ATTACHMENTS
Notice of Intention to Redeell' and Affidavit of Amount O wed
Public Trustee's Deed in name of City of Englewood-Housing Rehabilitation Fund
Bill for an Ordinance