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Home My WebLink AboutR-98-0582J-98-568 05/18/98 RESOLUTION NO. 9 R- 582 A RESOLUTION ESTABLISHING A HOUSING LOAN RECOVERY FUND IN THE AMOUNT OF $500,000.00, FOR THE PURPOSE OF PROTECTING THE CITY'S HOUSING LOAN PORTFOLIO FOR LOANS PROVIDED THROUGH THE CDBG FUNDED SINGLE-FAMILY AND MULTI -FAMILY REHABILITATION LOAN PROGRAMS, HOME INVESTMENT PARTNERSHIP ("HOME") PROGRAM AND STATE HOUSING INITIATIVES PARTNERSHIP ("SHIP") PROGRAM; AUTHORIZING AND DIRECTING THE CITY MANAGER TO ALLOCATE THE AFOREMENTIONED FUNDS FROM THE SALE PROCEEDS OF THE ST. HUGH OAKS VILLAGE CONDOMINIUMS; FURTHER AUTHORIZING AND DIRECTING THE CITY MANAGER AND THE CITY ATTORNEY TO UTILIZE AND DISBURSE SAID FUNDS ON A CASE -BY -CASE BASIS, AFTER IT HAS BEEN DETERMINED THAT IT IS IN THE CITY'S BEST INTEREST TO MITIGATE AND/OR PURSUE LEGAL ACTIONS AGAINST LOAN ACCOUNTS WHICH ARE IN DEFAULT IN EXCESS OF 120 DAYS. WHEREAS, since 1980, the City of Miami has provided low interest loans to owners of single-family homes (1-4 units) and owners of sub -standard multi -family apartment buildings (5 units or more) for the rehabilitation of said housing units; and WHEREAS, since 1993, the City of Miami has also received funding from the U.S. Department of Housing and Urban Development through the Home Investment Partnership ("HOME") Program for the development of affordable housing units in the City; and CITY COMMISSION MEETING OF J U N 0 9 1998 flon N. 98- 582 WHEREAS, since 1995, the City of Miami has also received funding from the State of Florida through the State Housing Initiatives Partnership ("SHIP") Program; and WHEREAS, through the aforementioned housing programs, the City of Miami has made available various low interest loans to private owners of single-family and multi -family housing units, in addition to loans to not -for -profit housing corporations, for the development and/or rehabilitation of affordable housing units in the City; and WHEREAS, the U.S. Department of Housing and Urban Development's District Office of the Inspector General ("OIG") in its Audit Report dated March 26, 1998, identified several findings and concerns relative to the City's ability to properly safeguard the City's housing loan portfolio; and WHEREAS, it has been determined that it is in the City's best interest to establish a Housing Loan Recovery Fund to pursue the collection of defaulted loans on a case -by -case basis which are in default on loan payments in excess of 120 days. NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. The recitals and findings contained in the Preamble to this Resolution are hereby adopted by reference thereto and incorporated herein as if fully set forth in this Section. 0"8— �� Section 2. The City Commission hereby establishes a Housing Loan Recovery Fund for the purpose of aggressively pursuing the collection of delinquent loan accounts in the City's housing loan portfolio, with funds therefor in the amount of $500,000 hereby allocated from the sale proceeds of the St. Hugh Oak Village Condominiums. Section 3. The City Manager and the City Attorney are hereby authorized and directed to utilize and disburse said funds on a case -by -case basis, after it has been determined to be in the City's best interest to mitigate and/or aggressively pursue legal actions against delinquent loan accounts in the City's housing loan portfolio which are in default in excess of 120 days. Section 4. This Resolution shall become effective immediately upon its adoption. PASSED AND ADOPTED this 9th day of June 1998. JOE CAROLLO, MAYOR 9 i accordance wt'h Miami Code Sec. 2-35, since the Mayor did not indicgts I of it in the designated place proOdad, s.aic ° is e"' ctive with the elapse of ten (10) days from the date of Commiss:cn action ATTEST: regarding same, without the Mayor exercising a v o. Walter J an, City Clerk WALTER J. FOEMAN, CITY CLERK 98- 52 3 DEPA#TMENT OF COMMUNITY DEVELOPMENT GyPEND-0LY*/C . WARREN, DIRECTOR DEPARTME14T OF COMMUNITY DEVELOPMENT v OFFICE OF BUDGET AND MANAGEMENT ANALYSIS REVIEW: "J-/- DIPAK PARELIH, D-INRECTOR OFFICE OF BUDGET AND MANAGEMENT ANALYSIS REVIEWED AS TO ACCOUNTING AND TREASURY REQUIREMENTS: V LOURDES' EYES, COMPTROLLER DEPARTMENT OF FINANCE PREPARED AND APPROVED BY: LINDA EELLY EE SO ASSISTANT CITY ATTORNEY APPRD A, TO F AND CORRECTNE S• JALEJ-A-NDRO, VIL-ARELLO C CITY ATTORNEY AK/W2591 f� i 4 98- 582 CITY OF MIAMI, FLORIDA INTER -OFFICE MEMORANDUM Honorable Mayor, Joe Carollo and TO: Members of the City Commission FROM (0Z(fJ0*WarShaW City Manager RECOMMENDATION: 27c May 11, 1998 DATE: FILE Resolution Establishing SUBJECT: Housing Loan Recovery Fund City Commission Agenda Item REFERENCES: May 26, 1998 ENCLOSURES: It is respectfully recommended that the City Commission adopt the attached resolution, approving the establishment of a Housing Loan Recovery Fund in the amount of $500,000. The proposed fund would be utilized by the City to facilitate foreclosure action against outstanding default loan accounts, in addition to protecting the City's interest when foreclosure action has been initiated by a superior lien holder (s) against a loan (s) in the City's housing loan portfolio. The attached resolution further allocates funding in the amount of $500,000 from the sale proceeds of the St. Hugh Oaks Village Condominiums Project. BACKGROUND: Since 1980, through the Community Development Block Grant Program the City of Miami has provided low interest loans to owners of single family homes (1-4 units) and multifamily apartment buildings (5 units or more), for the rehabilitation of substandard housing units on a citywide basis and in the City's eight (8) CDBG target areas. Moreover, since 1993, through the Home Investment Partnership (HOME) Program and the State Housing Initiatives Partnership (SHIP) Program, the City has also made available low interest loans to not -for -profit housing corporations, for the development and/or rehabilitation of affordable housing units in the City. In March of 1998, the U.S. Department of Housing and Urban Development's District Office of the Inspector General, in its audit report dated March 26, 1998, cited weaknesses in the City's loan collection procedures. One of the weaknesses identified included the City's inability to take the appropriate actions necessary to protect its interests upon foreclosure by superior lien holders. The establishment of the Housing Loan Recovery would provide the City with the financial resources 98- 582 Honorable Mayor, Joe Carollo and Members of the City Commission May 11, 1998 Page 2 necessary to pursue legal remedies to cure default and/or recover losses, in addition to the ability to take the appropriate action required to protect the City's interest upon foreclosure by a superior lien holder. JGP/CMC/GCW/JBH:fs Gwendolyn C. Warren, Director <sharedfran>may26commissitemhousloan 98- 582