Agenda

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C.63

To:	Board of Supervisors
From:	Catherine Kutsuris, Conservation & Development Director
Date:	November 10, 2009

Contra

Costa

County

Subject:

Community Development Block Grant Neighborhood Preservation Program Partial Loan Repayment

APPROVE	OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR	RECOMMENDATION OF BOARD COMMITTEE

Action of Board On: 11/10/2009

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

AYE:

John Gioia, District I Supervisor
Gayle B. Uilkema, District II Supervisor
Mary N. Piepho, District III Supervisor
Susan A. Bonilla, District IV Supervisor
Federal D. Glover, District V Supervisor

Contact:

Kara Douglas 33-7223

I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown.
ATTESTED: November 10, 2009
David Twa,

BY:	, Deputy

RECOMMENDATION(S):

1. APPROVE request from North American Title Company to accept $10,000 in lieu of a full repayment of $53,210 in Community Development Block Grant (CDBG) funds: and
2. AUTHORIZE the Deputy Director – Redevelopment, or his designee, to execute the appropriate documents to reconvey the Deed of Trust.

FISCAL IMPACT:

No General Fund impact. The CDBG funds are provided to the County on a formula allocation basis through the U.S. Department of Housing and Urban Development (HUD).
CFDA number 14.218

BACKGROUND:

In 2005, the County provided a $53,210 no interest loan in CDBG funds through the Neighborhood Preservation Program to the owner of 1314 Chestnut Street, Martinez. At that time, the appraised value of the home was $400,000. In 2007, the County subordinated its loan to a new first mortgage loan in the amount of $337,000. The home value was then over $430,000. A Notice of Default was recorded June 29, 2009.

The owner of the property has a purchase offer of $250,000, which is substantially below the total outstanding loans of approximately $390,000. The first lender, Wachovia (now Bank of America) has agreed to a payoff of $220,000. The seller is requesting the County agree to a payoff of $10,000. The remaining proceeds from the sale will be used to pay property taxes, escrow fees, and Realtor commissions.

With the significant loss of home values in the County, staff expects that the County may be requested to consider additional requests for partial loan repayment. Staff will prepare a Board report and recommendation that would permit staff to handle such requests administratively subject to conformance to Board policy and direction. Staff will bring a recommendation forward in the first quarter of 2010.

CONSEQUENCE OF NEGATIVE ACTION:

If the Board of Supervisors does not approve this request, the buyer will not be able to purchase the home and the bank will foreclose on the property. If the bank does foreclose, the County will not receive any payment.

CHILDREN'S IMPACT STATEMENT:

CLERK'S ADDENDUM

ADOPTED the recommendations; and REQUESTED a report be prepared for the Board's consideration in January 2010 with an estimate of the number of CDBG property loans that may be subject to this type of in lieu settlement, the possible financial ramifications to the CDBG fund and the County, and an overview of options to manage these actions.