Agenda 09/27/2011 Item #10G
9/27/2011ttem 10.G.
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EXECU'pVE SUMl\{AJY
Recommendation tltattlte Board of County Commissioners approve a Short Sale Policy and
Procedure for the State HollsiBg InitiativesPartBership (SHIP) program.
OBJECTIVE: . That tb.e8oard of County Commissioners approve a Short Sale Policy and Procedure for
the State Housing Initiatives Partnership (SH{P) program and to consider the short sale request of Mr.
Keith Roman.
CON~IDERATlO~S: On September .13, 2011, ~enda item 6B, the Board of County Commis.sioners
heard a public petition from Mr. Keith Roman seeking a.pproval for a repayment settlement of $2,000 for
aSHIP loan in the amount of $24,272.50. Following discussion, the County Manager directed staff to
bring back a policy and procedure for consideration at the September 27, 2011 Board of County
Commissioners meeting. Information specific to Mr. Keith Roman's request is included as Attachment
"A" of this agenda item.
The funding for the SHIP program was established in 1992 with the passage of the William E. Sadowski
Affordable Housing Act The Comer County SHIP down. payment assistance program has been in
existence for over '.15 Years. Since program inception at Collier County, in excess of $20 million.in SHIP
funds have ~n received, the majority of which have been applied to down payment assistance.
Individualloans have ranged . from $2,500 to as much as $45,000 over the dura.tion of the program, and _
thousands of individuals have been assisted.
~ Every three (3) years th~ Board of County Commissioners approves the SHlPLocal Housing Assistance
Plan (LHAP) to designate strategies eligible for funding through the SHIP program. Historically, Collier
County has not provided for forgiveness of the assistance provided through the SHIP program; the.only
exceptions have been in the' instance of death of the recipient or other catastrophic events. The program
contains no policy to provide forgiveness in an effort to facilitate a Short Sale.
Consultation with. the grantor agency has determined that the SHIP program does not regulate policies
and procedures relating to debt settlement. The state does not require that loans given under this prpgram,
be repaid. The County, as lender, has the ability and right to establish policiesJor settlement of the debt.
When a property is foreclosed upon historically we have recovered $0. A short sale is a method by
which a homeowner attempts to avoid foreclosure by negotiating with the first mortgage lender to.accept
an amount less than owed. Oftentimes in an effort to complete the short sale and recapture at least a
portion of their investment, . the fIrst mortgage lender wiJ) offer a significantly reduced payoff to others in
subordinate positions. By. concurring with the fIrst mortgage lender to ac~pt less than owed,. Collier
County may recapture a portion of funds rather than zero funds following foreclosure.
The policy brought forth. for consideration through this agenda item is only applicable to debt. settlement
to facilitate short sales for clients assisted through the down payment assistance program ("Purchase
Assistance"). To be eligible for a short sale, the policy applies the following minimum criteria:
1. The recipient as seUerofthe property shall not receive any funds from the Short Sale transaction.
2. To facilitate a ShortSale, Collier CoUnty shall forgive a percent of the assistance provided based
upon the following table.
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9/27/2011 Item 10.G.
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SHORT SALE
SETTLEMENT AMOUNT
25% or $2,500
whichever is more
F or example, if a recipient received SHIP assistance in the amount of $20,000 the settlement amount
would be $5,000 (25%).
In Mr. Roman's case his loan amount was $24,272.50, provided in 2007. Consequently, he would qualify
to have $] 8,204.37 (75%) forgiven, and he would pay $6,068.] 3 (25%).
FISCAL IMPACT: Approval of this policy will allow Collier County to recover a small repayment, in
lieu of no recovery under a foreclosure. These funds would then be reprogrammed for additional down
payment assistance.
LEGAL CONSIDERATIONS: This item has been reviewed and approved by the County
Attorney's Office and is legally sufficient. This item requires a majority vote. - JBW
GROWTH MANAGEMENT IMPACT: The State Housing Initiatives Partnership (SHIP) program
supports efforts to meet the goal, objectives, and policies set forth in the Housing Element of the Growth
Management Plan. A policy decision to allow debt settlement related to short sales only impacts the
ability of the SHIP program funds from the Trust Fund to be supplemented by potential repayments from
individuals, which further leverage SHIP funds. As a result, this policy does impact the goals of the
Housing Element by lessening the ability to further assist other individuals through the program
repayments.
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RECOMMENDATION: That the Board of County Commissioners approve a Short Sale Policy and
Procedure for the State Housing Initiatives Partnership (SHIP) down payment assistance program, and
that this policy apply to Mr. Roman's request for a short sale.
Prepared By: Kim Grant, Interim Director, Housing, Human and Veteran Services
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9/27/2011 Item 10.G.
COLLIER COUNTY
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Board of County Commissioners
Item Number: 10.G.
Item Summary: Recommendation that the Board of County Commissioners approve a
Short Sale Policy and Procedure for the State Housing Initiatives Partnership (SHIP) program.
(Kim Grant, Interim Director, Housing, Human and Veteran Services)
Meeting Date: 9/27/2011
Prepared By
Name: RamseyFrank
Title: Manager, Housing, Human and Veteran Services
9/15/20114:28:14 PM
Submitted by
Title: Manager, Housing, Human and Veteran Services
Name: RamseyFrank
9/15/20114:28:15 PM
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Approved By
Name: GrantKimberley
Title: Interim Director, HHVS
Date: 9/20/2011 5:32:49 PM
Name: AlonsoHailey
Title: Administrative Assistant,Domestic Animal Services
Date: 9/21/2011 8:21:21 AM
Name: AckermanMaria
Date: 9/21/2011 3:49:17 PM
Name: FoordMarlene
Title: Grant Development & Mgmt Coordinator, Grants
Date: 9/21/2011 3:55:25 PM
Name: RamseyMarla
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..-... Title: Administrator, Public Services
Date: 9/21/2011 4:00:16 PM
Name: WhiteJennifer
Title: Assistant County Attorney,County Attorney
Date: 9/21/2011 4:15:34 PM
Name: KlatzkowJeff
Title: County Attorney,
Date: 9/21/2011 4:20:54 PM
Name: PryorCheryl
Title: Management! Budget Analyst, Senior,Office of Management & Budget
Date: 9/21/2011 4:28:31 PM
Name: OchsLeo
Title: County Manager
Date: 9/21/2011 4:48:21 PM
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9/27/2011 Item 10.G.
9/27/2011 Item 10.G.
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ATTACHMENT "A"
BACKGROUND: On September 13, 2011, agenda item 6B, the Board of County Commissioners heard
a public petition from Mr. Keith Roman seeking approval for a repayment settlement of $2,000 for a
SHIP loan in the amount of $24,272.50. The loan was provided to assist Mr. Roman, a first time
homebuyer, with the down payment and closing costs associated with the purchase of a primary residence
in September 2007. The loan was secured by a second mortgage recorded September 10, 2007 in O.R.
Book 4280, Page 867, of the Public Records of Collier County, Florida.
The petitioner sought relief from the repayment obligation of the SHIP loan to facilitate a short sale, thus
attempting to avoid a foreclosure.
TIMELINE:
1. September 10. 20'07: Warranty Deed transfer ownership of the subject property to Mr. Keith
Roman recorded in O.R. Book 4280, Page 846, of the Public Records of Collier County, Florida.
2. September 10. 2007: Harris Bank provides first mortgage financing recorded in O.R. Book 4280,
Page 847, ofthe Public Records of Collier County, Florida.
3. January 14.2011: Harris Bank awarded a "Notice of Us Pendens" recorded in O.R. Book 4642,
Page 3492 of the Public Records of Collier County, Florida.
4. June 23. 2011: Harris Bank awarded a "Final Judgement of Foreclosure" recorded in O.R. Book
4694, Page 2739, of the Public Records of Collier County, Florida.
5. September 28. 2011: Foreclosure sale scheduled for 11:00 a.m. in Clerk's Case Number
11 0011 7 CA. ,,-......
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9/27/2011 Item 10.G.
A TT ACHMENT "B"
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Collier County
Housing, Human and Veteran Services Department
State Housing Initiatives Partnership Program
SHORT SALE POLlCY
Requests for short sale must be approved in advance and in writing by Collier County. The following
minimum criteria shall apply:
1. The recipient as seller of the property shall not receive any funds from the Short Sale transaction.
2. To facilitate a Short Sale, Collier County shall forgive a percent of the assistance provided based
upon the following table.
SHORT SALE
SETTLEMENT AMOUNT
25% or $2,500
whichever is more
For example, if a recipient received SHIP assistance in the amount of $20,000, the settlement amount
would be $5,000 (25%).
In order to determine if a recipient may qualify for Short Sale, the Department will require the following
~ information:
1. Evidence of the first mortgage lender's approval for Short Sale.
Following initial review, the Department will advise in writing ifthe recipient has been pre-approved for
Shoti Sale. However, the following documents will be required prior to closing of the Short Sale and
issuance of final approval:
] . Signed final HUD-l Settlement Statement; and'
2. Final singed sales contract; and
3. Name, phone number and email address of closing agent.
SHORT SALE PROCEDURE
If recipient has been pre-approved for Short Sale by the Department, the following shall occur:
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1. The Department shall recommend final approval for the Short Sale to the County Manager, or his
designee, prior to closing of the Short Sale transaction.
2. The County Manager, or his designee, with the understanding that time is of the essence in Short
Sale transactions, shall issue final approval of the recipient has conformed with the Short Sale
Policy contained herein.
3. Upon Collier County receipt of the Short Sale disbursement, an amount as described above, the
Department shall request that the Board of County Commissioner execute a satisfaction of
mortgage.
4. The fully executed, original copy, ofthe satisfaction of mortgage shall be recorded in the Public
Records of Collier County, Florida.
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9/27/2011 Item 10.G.
Collier County
Housing, Human and Veteran Services Department
State Housing Initiatives Partnership Program
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SHORT SALE APPLICATION
Recipient(s) name:
Recipient(s) address:
First Mortgage Infonnation
First Mortgage Lender:
Principal Balance:
Approved Short Sale Amount:
Net Proceeds to Recipient:
SHIP Second Mortgage Information
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SHIP Mortgage Amount:
SHIP File Number:
Date Recorded:
Required Repayment Amount:
Amount Paid by Lender:
Amount Paid by Other:
Net Proceeds to Recipient:
OFFICE USE ONLY
D PRE-APPROVED-PREPARE SATISFACTION
D DENIED - PREP ARE PAYOFF
Date
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