Title
Chief Administrative Office recommending the Board consider the following:
1) Approve a short sale settlement offer and agreement to release a County lien securing a First-Time Homebuyer Loan;
2) Authorize the Assistant Chief Administrative Officer to negotiate subsequent short sale settlement offers for this transaction, if necessary; and
3) Authorize the Assistant Chief Administrative Officer to execute documents related to the short sale and, upon receipt of payment, issue a full Reconveyance and complete the necessary steps to internally discharge the remainder of the loan balance.
FUNDING: Federal CDBG Grant Funds.
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Fiscal Impact/Change to Net County Cost
No change. Loan repayments are added the County’s Revolving Loan Fund. Acceptance of a short sale offer would reduce the payoff amount of the loan and decrease the amount of revolving loan funds available for future loans.
Background
The Chief Administrative Office, Housing, Community and Economic Development Programs (HCED), provides housing acquisition loans to eligible borrowers through State and federal grant-funded programs.
On August 8, 2013, HCED received a request to accept a reduced payment or short sale offer to satisfy the terms of a first-time homebuyer loan. A short sale occurs when the sales price of a home is less than the total amount of liens encumbering the property. Staff reviewed the hardship conditions experienced by the borrower that necessitated the short sale and verified that they meet State policy requirements.
In December 2006, a Housing Acquisition Loan was provided to the borrower for the purchase of a home in El Dorado. The appraised value of the home at the time of purchase was $338,000. The borrower purchased the home for $328,193, which included a down payment of $60,718 and closing costs. Wells Fargo Bank provided a first mortgage of $167,475. The County Loan Program provided $100,000 through a grant from the State Community Development Block ...
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