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HRA Meeting Minutes – September 13, 2011 Page 3 1 their ability to do so now, she questioned if the first lien holder was offering the HRA more 2 than $3,000. 3 4 Ms. Kelsey advised that, if the property went into total foreclosure, it would eliminate the 5 HRA’s security interest completely; and noted that she was unsure how any additional funds 6 would or could be collected now or in the future. 7 8 At the request of Member Pust, Mr. Lundgren advised that the property owner had made their 9 last house payment six (6) months ago. 10 11 At the request of Member Masche, Ms. Kelsey advised that the first lien holder was willing to 12 provide a maximum $3,000 to the HRA, with a buyer in place for the property, with projected 13 closing on September 15, 2011, or the property would proceed into full foreclosure. 14 15 At the request of Members, Mr. Lundgren advised that the buyers were from the metropolitan 16 area and that the home would be owner-occupied; and confirmed that the proposed owner did 17 not currently own any other properties in the City of Roseville. 18 19 Further discussion included whether the HRA had any legal ability to enforce that the property 20 remain owner-occupied; and whether there was any way to keep the home as affordable 21 housing. 22 23 Member Pust opined, and Chair Maschka concurred, that this was an example of why the 24 public should not be in the banking business. 25 26 Chair Maschka further noted that this was an example of irresponsible lenders selling to people 27 that were not financial qualified in the residential market. 28 29 Additional discussion included the process for CBDG funds that were now recycled through 30 the HRA’s 720 Fund rather than going back to Ramsey County; with $145,000 now available 31 for first-time homebuyer assistance or for other single-family assistance programs, that 32 remained unused at this time. 33 34 Mr. Lundgren advised that it was the policy of Bank of America on any of their loans to 35 compensate a second mortgage holder; and further advised that Bank of America was the most 36 generous lender with their $3,000 compensation offer; but that they would not negotiate any 37 higher. 38 39 Ms. Kelsey advised that staff had stipulated, if this request was approved by the HRA, that the 40 GMAC not receive any compensation for their limited funds. 41 42 Motion: Member Lee moved, seconded by Member Pust to approve the write down of the 43 second mortgage for 279 Elmer Street from $58,000 to $3,000. 44 45 Members reluctantly agreed that this was the most prudent action; and by consensus 46 recognized that this young couple estimated to be in their late twenties with two (2) children 47 would unlikely be able to accommodate any further financial remedies to the HRA. 48 49 Ayes: 5 50 Nays: 0 51 Motion carried. 52 53 Member Pust asked Mr. Lundgren and staff to give the buyers the HRA’s best wishes; and 54 hoped they would be long-term members of the community and its school system. 55