COMMITTEE SUBSTITUTE
FOR ORDINANCE NO. 090757
Authorizing the Director of
Housing and Community Development and/or the court-appointed Receiver of the
Housing and Economic Development Financial Corporation (HEDFC), pursuant to
approval by the Federal Court, to liquidate all single family loans currently
in HEDFCs portfolio that require payments by first offering the loans to the
individual homeowner to payoff said loan at a discounted percentage and second,
by bundling and selling the remaining loans in the secondary market.
WHEREAS, prior
to 2005 the City provided funding received from the U.S. Department of Housing
and Urban Development (HUD) to the Housing and Economic Development Finance
Corporation (HEDFC) through yearly contracts for the purpose of administering
housing and community development programs for the City; and
WHEREAS, as part
of said funding, HEDFC created and administered a loan portfolio which consists
of single-family and multi-family loans; and
WHEREAS, the
loan portfolio currently administered by HEDFC consists of HOME, HOPE 3, UDAG,
PIN, FLAME, CDBG and other mortgage loans; and
WHEREAS, the
City has prepared and submitted an Asset Transfer and Capacity Building Plan
(Plan) to the U.S. District Court for the Western District of Missouri in the
case styled City of Kansas City, Missouri v. HEDFC, Case No.
4:05-CV-00368-GAF, as part of its request for transfer of the assets of HEDFC
to the City; and
WHEREAS, said
Plan establishes that the City will bundle and sell loans by November 30, 2009; and
WHEREAS, it is recommended that individual homeowners be given first
offer (first offer) to payoff the balances of said loans at a discounted rate
of fifty percent (50%) of the remaining balance of the loans in first position
and a discounted rate of seventy-five percent (75%) of the remaining balance of
all other loans; and
WHEREAS,
individual homeowners will be given thirty days from the date of written offer
to either accept or reject the offer; and
WHEREAS,
individual homeowners who accept the offer will be given ninety days from the
date of the written offer to pay the payoff amount to HEDFC; and
WHEREAS,
individual homeowners participating in the first offer opportunity must either
attend one or more financial/credit counseling session(s) to obtain approval of
all refinance terms and conditions or sign a waiver for exemption; and
WHEREAS, any
loans remaining after first offer to individual homeowners will be bundled and
sold in the secondary market to the highest bidder; NOW THEREFORE,
BE IT ORDAINED
BY THE COUNCIL OF KANSAS CITY, MISSOURI:
Section 1. That
the Director of Housing and Community Development and/or the court-appointed
Receiver for the Housing and Economic Development Financial Corporation (HEDFC)
in the case styled City of Kansas City, Missouri v. HEDFC, Case No.
4:05-CV-00368-GAF, pursuant to approval of the Federal Court, are hereby
authorized to liquidate all single family loans currently in HEDFCs portfolio
that require payments by first offering the loans to the individual homeowner
to payoff the balance at a discounted rate of fifty percent (50%) of the
remaining balance of the loans in first position and a discounted rate of
seventy-five percent (75%) of the remaining balance of all other loans and
second, by bundling and selling the remaining loans in the secondary market to
the highest bidder.
Section 2. That
the Director of Housing and Community Development and/or the court-appointed
Receiver for the Housing and Economic Development Financial Corporation (HEDFC)
in the case styled City of Kansas City, Missouri v. HEDFC, Case No.
4:05-CV-00368-GAF, pursuant to approval of the Federal Court, are further
authorized to allow the individual homeowners thirty days from the date of the
written offer to either accept or reject the offer; and for homeowners who
accept the first offer to be given ninety days from the date of the written
offer to pay the payoff amount to HEDFC and to require the individual
homeowners participating in the first offer opportunity to either attend one or
more financial/credit counseling session(s) to obtain approval of all refinance
terms and conditions or to sign a waiver for exemption.
__________________________________________
Approved
as to form and legality:
____________________________
Nicole
Rowlette
Assistant City Attorney