HomeMy WebLinkAbout2006 Ordinance No. 010•
•
•
ORDINANCE NO . jQ_
SERIES OF 2006
BY AUTHORITY
COUNCIL BILL NO . 11
INTRODUCED BY COUNCIL
MEMBER TOMASSO
AN ORDINANCE AUTHORIZING THE REDEMPTION AND SALE OF A HOUSING
REHABILITATION PROPERTY LOCATED AT 3030 SOUTH SHERMAN STREET IN
TH E CITY OF ENGLEWOOD , CO LORADO.
WHEREAS, the Cit y Council of the City of Englewood accepted assignment from the
Englewood Ho using Authoiity of all rights , assets and li abilities associated with th e Housi ng
Reh abili tat ion Loan Program by the passage of Ordinance No . 23, Series I 999 ; an d
WHEREAS , Englewood Ci !y Co un cil authorized amending Title , 4, Chapter 3, with th e
addition of a new Sec tion I 3 entitled "Housing Rehab ilitat ion Fund" by the passage of
Ordinance No . 26, Serie s I 999; and
WHEREAS, the Englewood Hou si ng Rehabilitation Program was created in I 976 to
preserve the existing housi ng stock in Englewood and to addre ss the problems of low -income
families with the financin g of major househ old repairs ; and
WHEREAS, the Re hab Program approves home improvement Joan s th at arc sec ured by
deeds of trust reco rded on the propert y represen ting generally second or third mortgages ; and
WH ERE AS, occasio nall y homeow ners default on their loans and the lien hold er ' it iate s the
foreclosure proces s by filin ~ the requi red docume nt s with the Public Trustee's Of . and
WHEREAS, the propert y located at 3030 South Shcnnan Street has a Reh ab il ita tion Loa n
wit h the Ci ty holdi ng a secon d mortgage; and
WHEREAS , thi s property went to public sale on December 28, 2005, and th e property was
sold back to the first mort gagee who initiat ed the foreclos ure; an d
WHEREAS , th e Englewood Rehab Loan Commi tt ee was consu lted at their Feb ruary , 2006
meeting and th ey re com mend ed liling th e lnt cnl to Rede em Notice wi th th e public Tm stcc 's
Office; an d
WHEREAS, th e homeowner failed to redeem the property , wi thin their 75 -d ay rede mpt io n
perio d; and ·
WHEREAS, the City (t he seco nd mortgagee) was notified on March 14, 2006 of th e
amou nt nee ded to redeem the properl y no later th an March 23 , 2006 ; and
WHEREAS, th e Cit y rede emed th e propert y on March 23, 2006 and re que sted on Apri l 11 ,
2006 th at the deed be iss ued to the Ci ty of Eng lewood Housi ng Rehabilitation Fund; and
WHEREAS , the redeemed property lo ca ted at 3030 South Shcnnan Street will be so ld to a
pri vate owner-occupied party who has secured hi s own financing an d the City funds used to
purchase the property will be return ed to th e Housi ng Rehabi lit ati on Fund when this prope rt y is
so ld and th e new owner's loan is clo sed ; and
9 b iv
WHEREAS, if an offer to purchase is received from any City employee, their family
members, or any business in which a City employee has a financial interest, the offer will be
submitted to the Englewood City Council for approval;
NOW, THEREFORE, BE IT ORDA INED 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 subsequent sale of a Housing Rehabilitation Property acquired through the foreclosure
process located at 3030 South Sherman Street.
~. The Mayor and the City Cle rk arc authorized lo execute the proper form of deed
for the conveyance of the property locate d al 3030 South Sherman Street , Englewood,
Colorado pursuant lo Section 7 I of the Englewood City Charter.
Introduced , read in full, and passed on first reading on the ISi day of May, 200 6.
Published as a Bill for an Ordinance on the 5th day of May, 2006 .
Read by title and passed on final reading on the 15th day of May, 2006 .
Published by titl e as Ordinance No . //2., Series of 2006, on the 19th day of May, 2006 .
~
I, Lou cri shia A. Ellis, City Clerk of the City of Englewood , Colorad o, hereby certify that
the above and foregoing is j _!rue copy of the Ordin ance pass ed o I al reading and publi shed
by title as Ordinance No . LJL, Serie s of 2006 .
•
•
•
•
•
•
C"' ':O.CIL COMMUNICATION
Date: Agenda Item : Subject :
May 1, 2006 11 a i Redemption and S ,le of 3030 South Sherman
acquired through t~e Housing Rehabilitati o n Fund
Initiated By: I Staff Source:
Co mmunity D evelopment Department Janet Grimmett, H ousi ng Financ e Specialist
COUNCIL GOAL AND PREVIOUS COUNCIL ACTION
Cou ncil passed Ordinance No. 23 , Series 1999 accep ti ng ass ignm ent fr om the Engle wood H ousing
Authority of all rights, assets anci li abiliti es as sociated wi th th e H ousing Rehabilitation Loa n Program
and also pa sse d O rdinance No. 26, ~e ri es, 1999 am ending Titl e 4. Chapter 3, by th e additio n of a
new Section 13 entitl ed "Housi ng Rehabilitation Fund ".
In 2005, Council passed fo ur ordin ances approving redempti o n and sa le of four oth er properti es
ac quired through th e foreclosure process.
RECOMMENDED ACTION
Th e Co mmunity Deve lopment D epartm ent recommends Council adopt a Bill for an Ordinance for
th e redempti on and subs equent sale of 3030 South Sh erm an Stre et (a single-fa mily hom e) acquired
thro ugh the fo recl osure proce ss as defined by Colorado St ate Statutes .
BACKGROUND, ANALYSIS, AND ALTERNATIVES IDENTIFIED
Th e H o using Rehabilitati on Program was crea ted in 1976 by th e City of Engle wood to prese rve th e
ex isting hm1sing stoc k in Engl ewoo d and to also addr ess th e probl ems that hon1 eowners exper ience
with th e finan ci ng of ,r.a j or hous ehold improvem ents. Th e City Atto rn ey required that th e new
H ousin g Rehab Progra m not be administered direc tl y by th e City to avoid any co nflicts wi th a State
Sta tute th at prohibited any municipal govern ment fr om n ,ak in g loans to its ci ti ze ns . It Wii h decided
to use th e Englewood H ousi ng Authority (EHA) as th e co nduit to mana ge and ope rat e th e Program .
Th e lega l auth ority to operate and manage th e Rehab Prog ram was assig ned to th e Ci ty in 1999
through an ag ree m ent with th e EHA. It was determin ed at th ,1t tim e that th e Program and c ity staff
sh ould b e under th e direc t m ana ge ment of th Community D eve lopm ent Direc tor. In o rd er to
av oid any conflict w ith Colorado State Sta l ut es, an ent erp ris e fund was created un de r TAB OR
regulati ons kn own as th e Housing Rehabili tati on Fund {Fund ). Th e Rehab Program retain ed its own
fund in g sources desig nated as Fun d 45 and Fund 46 that are us ed to support th e op erati o ns of th e
Program .
One of the functi ons of the Fund is to redeem properties that ha ve gone through the foredosure •
procesr,. The H ousing Rehabi litation Loan Progra m approves home improve ment loa:,s th at are
secure d by deeds of trust , generall1• as second or third mortgages (junio r li ens ). The procedures of
the Pr ogram require staff to have all foreclos ures rev iewed by th e Rehab Loa n Committee (RLC)
afte r the pro perty has be en sold at a pt1blic sale . Th e RLC consists of three members, currently: 1)
Je ,1nnette Espinoza, Engl ewood Bran ch Manager, Vectra Bank; 1) )ennifer Nolan, Accountant, City
of Englewood Accounting D epartmen t; and 3) Bea tri ce Lane, low-in com e hom eowner and
Engle wood res ident.
The foreclosure process is th e primary tool for lenders to use 10 ;nsurc repaym ent of th eir loa ns .
When a ho me owner defaults, the lien holder is able to initiate t,1e foreclosure proce ss to coll ec t th e
moni es that are owed to th em . This process is started by filin~ the req1•ired legal documents w ith
the Publ ic Trust ee's Office. This filing triggers a w h-1 le sequen ce of even\; 1hat is di ctated by stat e
sta tut es . Th e Public Trust ee w ill set a Public Sale date fo r the property and publish thi s information
in a news paper of general ci rc ul ati on fo r a min i m u•n of fou r wee ks . Ea ch recorded li en holder
rece ives a copy of th at advert isement as well as a Pu b li c Trust ee'< N o ti ce of Rights to Cure or
Red ee m. Each junio r lien holder must fil e a N o ti ce of Intention to Redee m within 60 da ys of th e
Pu blic Sale date if th ey are int erest ed in rede eming the property to collect their own ind ebtedness.
If the Intention to Red ee m is n ot filed , th en th e lien hold er los es th eir ri ghts under th e dee d of tru st
provisio ns and the property is 110 longe r co llat era l for th eir loan.
The homeowner ca n cure th e defa ult any tim e from th e initial notifica ti on th rough the 75-day
perio~ fv ll owin g th e Publi c Sale . Thi s time frame represents .pproxima tely a four-mont h time
per;v d. If th e hom eowner red eems th e property, th en th e foreclosure process is ended and th ere is •
nothin g th e juni or lien hold er is required to do. All li ens remain in full effec t. If the hom eowner
does no t redeem w ithin th e 75 -day time p eri od, the first junior li en hold er has 10 da ys from th at
date to ac t u n th eir Intention to Rede em and to pay th e Public Trust ee's Office the tota l red emp1i on
amoun t in cer tifi ed funds . Eac h subseq uent junior li en ho lder th en ha s 5 days in w hi ch to redee m .
Thi s m ea ns that a j uni or li en h older will no t know if th ey need 1e, a.,I o n th eir Intenti on to Redee m
until the homeowner's red emption p eriod ha s ex pired and th en onl y w hen notified by the Public
T ru sl ee as to th e amount necessary l o redee m th e property.
Given th e ve ry short lime fram es of th e junior li en holde r redemption p eri od, prop e.rt•s; redeeme d
thro ugh th e H ousin g Rehab Pro gram are always b ro ught l o th e Council after the fo e• •>J r ordinan ce
approval. Section 72 of th e H ome Rul e Chart er requi res th at rea l properly may bt ,•,id, b ut onl y by
ordinan ce, not using th e emerg ency provi sion. Et1c h property is brought befor e Cm111cil as ea rl y in
th e proces s as p ossib le so that mark etin g efforts c,1 n begin. This process w ill expedite th e
subsequent sa le and clos in g of th e p roperty.
Th e initial foreclos ure notifica ti on fo r 3030 South ~ 1erman Street was receiv ed in May 1005. Th e
Rehab loa n was a deferred loa n using moni es fr om Arapa hoe Coun ty CDBG an d HOME progra m s.
Th e Public Sale was origi nall y set for lun e 19, 2005, b ut was continued until D ece mber 28, 2005 .
Th e properly was so ld ba ck to the first mortgagee who had initiat ed th e fo reclosu re. Th e RLC was
consulted at th eir Fe bruary 2005 meeting, and the y reco mmen ded filin g th e In tention to Redee m
notic e wi th th e Public Trustee's Office. Th at n otic e was fi led lat er in Feb ru ary. Th e homeowne r's
final redempti o n date was March 13 , 1006 As th e se c0 nd mortgagee, th e City of Englewood was
notified on M arch 14, 1006 by th e Publ i, Trust ee's Office of the am o unt needed to redeem th e
properly 11 0 later th an March 23 , 2006. A wire transfer from th e H ousing Rehab ilitatio n Fll!ld 46 •
was sen t on M arch 13, 1006 to th e Pu bli c Tru stee 's Office.
•
•
•
A third and fourth mortgagee had filed their own Intents to Redeem with the Public Trustee 's
Office. The tr:, d mortgagee had until March 28, 2006 to act on th eir Intent to R,•Jeem and wire
iunds to the Public Trustee 's Office. The fourth mortgagee had until April 3, 20' , to act on their
Intent to Redeem and wire funds to the Public Trustee 's Office. On April 10, it Lecame kn own that
neither the third or fourth mortgagee acted on the Intent to Redeem . A letter was hand delivered
0 11 April 11 requesting that a Public Trustee 's deed be issued in the name of the City of Engl ewood•
Housing Rehabilitation Fund. The redeemed property will be so ld to a private owner-occupied
party who has secured their own financing. The funds that were used to redeem the property will
be return ed to the Housing Rehabilitation Fund 46 when the property is sold.
If an offer to purchase the property is received fr om any City of Engl ewood employee, their famil y
members, or any business in which a City employee ha s a finan ci al interes t, th en staff will submit
th e offer to City C0uncil for approval of the sale.
FINANCIAL IMPACT
Fund 46 w ill cover all costs oi the redemption and the subsequ ent sale of 3030 South Sherman
Street. Th e, e are no other financial impac ts to th e City.
LIST OF ATTACHMENTS
Notice of Int enti on to Redeem and Affida vit of Amount Owed
Lett er req uesti ng deed fo r 3030 South She•man Street
Bill fo r an Ordinance
•
•
•
NOTICE OF INTENTION TO REDEEM AND AFFIDAVIT OF AMOUNT OWED
TO TiiE ~UBLIC TRUSTEE OF 7HE County of Anpahoe, State of Cclorado
lnfonn1tion Regarding Public Trustee's For«losurc Sale :
Public Trustee's Sale Number
Date of Sale
Last Day of Owner's Redemption Period
Date ofDeed of Trust
Grantor of Deed of Trust
Original 8eneficiuy ofDeed ofTrust
Reference Nos. of Recorded Deed of Trust
Information Regarding Right to Redeem:
Name of Redemptioner
Address and Phone No . of Redemptioner
Lien or Encumbrance Entitling the
Undersigned to Redeem
Date of Recording Lien or Encwnbrancc
County of Recording
Reference Nos. of Recorded Lien
1272-2005
December 28, 2005
Much 13, 2006
Auguat 14, 2002
Michtlle L Pedersen and Michr..cl Pedersen Jr.
Option One Mortgage Corporation
82152750
City of Englewood-Hawing Rehabilitation Fund
1000 Englewood Pkwy, Englewood, CO 80110
303 .762.2349
Deed of Trust
April 27, 2004
Arapahoe
84075769 •
You arc hereby notified that the undersigned intends to redeem the property •,old by you •'1 e public
Trustee's Sale described above. TI1c undersigned is entitled to redeem as the owner r nor
encumbrance described above .
You are further notified that the amoW1t owed on the lien or encwnbrance evidenced by the attached
instrument(s) is as follows:
Principal
Administrative Fees (inc. late charges)
Legal Fees
Interest to End of Owner's Redemption Period
Total
$25 ,000 .00
60 .00
2,378 .47
$27,438.47
Per Diem Interest After End of Owner's Redemption Peri od: $3.4722
I certify that the above amoW1ts are correct to the best of my knowledge.
City of Englewood -Housing Rehabilitation Fund
'
by: Rr~~=-:: Da1e : February B, 2006
Phone : 303. 762.2349
Fu 303 .783 .6895
This4 affidavit'is subscribed and swum to before me this
kap~,\$~if?.f fo,londo.
13th day of February, 2006, in the County of
wi~·~rh~d:~~-MY .~11)11¥,;~t\\n~ Sept. 22, 2009 ~d:1IA NOtPubliC ·:·, ... ~··· .: ... ,;_~-,~ .. J
• Atta~~ II• true ~.CCNT'Kt copy or the recorded imtn.1menL
•
•
•
C T y 0 F
C 0 M M U N I T
Apri l 11 , 2006
Arapahoe County Pub lic Trustee
2329 W. Main St, Suite 100
Li ttleton, CO 80120
To W horn It May Co ncern:
y
{'
E N G L E w 0 0 D
D E V E L O P M E N T
(hand delivered)
As a re sult of rede eming th e Public Trust ee's Foreclosure Sale No. 1272-20 05, please iss u e a
P11blic Trustee's Deed to:
City of Englewoo d -Housing Rehabilitation Fund
1000 En glewood Parkway
Eng lewood, CO 80 110-2373
Encl osed is $36 .00 to cover th e cos t of iss uing the Deed for the property located at 3030 South
Sherman Street, Engl ewood, CO 80 11 3. Pl ease let me know if yo u ha ve an y questi ons .
Sincerely, 91,U,t ;;l -i__ &1.,1\,1.,W\i".~
Janet M . Grimmett /
Housing Finance Specialist
Enclosure
H·~GhOOG 16/lgt.,u.pm~ li!an,1&~y,;, 15nti,...,.,~ 0di,mdo A6@l 1IO>n lo~(l)Jllff,~O&i6'l<I04Q ., ,lil<)(,d03•783-6895
www .englewoodgo v ors