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HRA Meeting Minutes – Tuesday, May 17, 2011 Page 4 1 those families who had significant roots in their community and the difficulties in facing such 2 a situation even though they were working hard to keep their homes. Mr. Finzell noted that, 3 unfortunately, they often came to the agencies for help when it was too late; thus the RLT’s 4 interest in getting ahead of the problems. Mr. Finzell advised that often the RLT was 5 successful in working with the existing lender to modify the mortgage; and noted that the 6 RLT’s goal was to work with the family, whether their current lender stayed the course with 7 the family or not, and if necessary to remove that lender from the picture to facilitate an 8 affordable thirty-year mortgage that is calculated on realistic figures based on current and 9 potential ability for the family to pay long-term based on an affordable income. 10 11 Member Elkins sought additional information on the counseling work done by the RLT with 12 families so they understand the trust concept. 13 14 Mr. Finzell advised that the RLT provided an orientation session, followed by individual 15 discussions with RLT staff. Mr. Finzell advised that the RLT required each family to take all 16 the legal documents they would be required to sign, and go to an attorney of their choice, 17 reimbursed by the RLT, for a thorough review and understanding of those documents. Mr. 18 Finzell advised that the RLT would pay for an interpreter if one was needed; and if the family 19 chose to continue the process, they moved forward in the process. Mr. Finzell advised that the 20 RLT wanted to be as transparent as possible; noting that the trust program was not an option 21 for everyone and people were used to having 100% equity in their homes, and the RLT 22 respected and understood that. 23 24 Member Elkins noted that a ground lease for 99 on the property would be recorded along with 25 the mortgage; further noting that the MN Housing Agency accepted these types of mortgages, 26 and most banks would include them in their portfolios as well. 27 28 Mr. Finzell noted that the loans were also hand underwritten, to ensure that it will work; with 29 property records showing both the Trust and the homeowner on recorded documents and 30 property tax statements so the Trust always remained part of any financing options and averted 31 potential scams once it was apparent that it was a leasehold property. 32 33 From her personal experience in the banking field, Member Elkins spoke in support of land 34 trusts as a great instrument; noting that Bremer Bank did a lot of them; and provided options 35 for a lot of people who would never get into home ownership without such an option; and that 36 they typically worked well. 37 38 Mr. Finzell noted that, even though the RLT had limited lenders in the metropolitan area, they 39 retained very good relationships with those lenders. Mr. Finzell noted that the RLT was no 40 different than others in the housing situation, and that some people had lost their homes. 41 However, Mr. Finzell further noted that if a property went into foreclosure and redemption, the 42 lender had the right to put the land and building back together to sell on the open market, and 43 the Trust respected that. Mr. Finzell noted that in MN and especially in the RLT case, they 44 had worked out agreements with their three (3) lenders where, should the Trust resell the 45 homes as land trust homes, the subsidies in those homes were preserved, which the lenders 46 didn’t have to do; but speaking well of the relationship on both sides and benefits of keeping 47 affordable housing. 48 49 Mr. Finzell distributed additional RLT informational materials to the HRA and staff. 50 51 Chair Maschka thanked Mr. Finzell for his informative presentation. 52 53 9.Action/Discussion Items 54 55 a.HRA working with Rondo Land Trust