Agenda 01/27/2009 Item #16K 1
Agenda Item No. 16K 1
January 27,2009
Page 1 of 3
EXECUTIVE SUMMARY
Recommendation that the Board of County Commissioners approves Staff's proposal (I) to
deny Mrs. Cynthia Dennis Pray's request that the Board waive the federal loan granted to
her by Collier County Housing and Human Services, (2) send a written demand to recover
the funds, and (3) not initiate litigation against Mrs. Pray.
OBJECTIVE: Recommendafion fhat the Board of Counfy Commissioners approve Sfaffs
proposal that would (1) deny Mrs. Cynthia Dennis Pray's request that the Board waive the
federal loan granfed fo her by Collier County Housing and Human Services, (2) provide for a
written demand to recover the funds, and (3) not initiafe litigation against Mrs. Pray.
CONSIDERATIONS: Mrs. Pray was granfed a federal HOME loan for home rehabilitation
from the Collier County Housing and Human Scrvices Departmenf (HHS).' HOME funds are
used to assist low and very low-income Amcricans wifh homc ownership. The funds may be
used for a varicfy of reasons including acquisition and rehabilitation. Pursuanf fo HOME
program requirements, Mrs. Pray was required to sign a Mortgage and Promissory Nofe securing
the $19,000 loan, The federal loan program requires fhaf the home remain affordable for a
minimwn of 10 years following the loan. The program also requires that the bOITower remain
fhe same, and thaf fhe home not be fransfeITed or sold wifhouf HHS' prior written approyal.
Finally, HOME requires that fhe County attcmpf fo recapture the federal funds in fhe evenf of a
breach or default by the hOITower. See 24 CFR part 92,
Mrs. Pray trans felTed ownership of her home to her fafher by a quif-c1aim deed dafed April 7,
2008, Mrs. Pray alleges thaf she was advised fa do this by a reverse-mortgage company, Calyary
Financial. When Mrs. Pray transfelTed owncrship of her home, by operafion of law, she
defaulted on her agreemcnt with fhe Counfy, As a result, the $19,000 loan became due and
payable immediafely.
Collier County was nof informed of fhe transfer in ownership until Mrs, Pray requested fhat
Collier Counfy waive fhe $19,000 loan, In fact, Collier County cannot legally waive fhis loan as
Collier County is required fo recapture the federal funds when fhe loan is no longer heing used as
intended,
Mrs, Prav's Requesf
Mrs. Pray appeared hefore fhe Board of County Commissioners on Deccmber 16, 2008, fo
rcquest that the Board "waive" fhc loan from Collicr County, When Mrs. Pray appeared, she
failed to advise fhe Board that her home had already been forcclosed with a Summary Judgmenf
of Foreclosure entered on Novcmber 20. 2008. The final salc was scheduled for Dcccmber 18,
2008, and Mrs. Pray advised the Board lbaf if thcy wcre to waive the loan, she could save her
hOllle with a reverse 1110ligage.
-
, Mrs. Pray has also rt'ceived two SHIP grants from Collier County which have been satisfied with a previous first
mortgage refinance. All SHIP funus used to it'i:.15t lVirS. PI'ay have been l"t'paid [0 Cullier County.
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?age 2 of 3
The Counfy Attorney agreed fo reyiew Mrs. Pray's request together wifh the Department of
Housing and Human Services, The foreclosure sale was rescheduled af fhe Counfy's requesf fo
allow Collier Counfy fo defermine what, if anything, could be done to assist Mrs. Pray. This
continuance allowed Mrs, Pray and her family to remain in the home fhrough fhe holiday season.
The mosf important consideration is that the Counfy is unable fo waive fhis loan as this loan is
subject to sfringent federal requiremenfs, The federal regulations require fhaf if fhe borrower
defaulfs on the agreement, fhe Counfy is required to recapture the loaned funds,
Procedux~
Mrs. Pray was advised hy a pnvafe company fhat a reverse mortgage could possibly save her
home if she transferred ownership fo her elderly fafher and if all other mortgages (or liens) were
waived. The complicafion is thaf the first mortgage ($127,000) is greater than the yalue of the
home (approximafely $65,(00). Even if Collier Counfy were authorized fo waive the federal
loan, it would only increase the money recovered by fhe first mortgage holder, and not directly
benefit Mrs. Pray. Ifthe property is sold in a foreclosure sale. fhe first mortgagce will be entitled
fo all of fhe proceeds from the sale, leaving no funds fo safisfy fhe Counfy's second mortgage.
Simply sfafed, Mrs. Pray would nof be able fo keep hcr home wifh or wifhouf fhe County's
waiver of the federal loan.
If Mrs, Pray had approached Collier County prior to transferring the propcrty fo her fafhcr, there
may have been addifional remedies fo research, For example. the County may have been able to
qualify Mrs. Pray's father for additional federal assistance. Howcver, when Mrs. Pray
transferred title to her fafher, and the Summary .Iudgmenf of Foreclosure was enfered, both Mrs.
Pray and the Counfy's options bccame limifed,
Fiscal Impact: There is no fiscal impact associated with this recommendation.
Growth Manal!emcnt Impact: There is no growfh managemenf impact associated with this
recommcndat ion,
Lel!al Considerations: The Counfy Attomcy Otlice has rescarchcd fhis issue and reviewed the
altematives with the Departmenf of Housing and Human Services, Collicr County is required by
law fo attempf to recapfure the j~deral funds thaf wcre loaned to Mrs. Pray, and as such the
Counfy may nof waive this federal loan.
This ifem is not quasi-judicial, and as such ex parte disclosure is not required. This item requires
majority vote only. This ifem is legally sulTicient for Board action. - CMG
Recommendation: The Dcpartmcnf of Housing and Human Scrvices and fhe County Attorney
rccommcnd that the Board of County Commissioncrs (I) fOl1nally deny Mrs, !'ray's requcst Jar
waiver of the fcdcralloan, (2) send a written demand to Mrs. Pray in an attempt to recover the
iCdcral funds, and (3) nof initiate litigafion against Mrs. Pray as rccovery is highly unlikcly,
Prepared hy: Cuiicl:l1 ivL Greene
Assistalll COUilty AL10rucy
Page I of I
ACJenda Item No. 16K 1
,January 27. 2009
Page 3 of 3
COLLIER COUNTY
BOARD OF COUNTY COMMISSIONERS
Item Number:
16K1
Item Summary:
Recommendation that the Board of County Commissioners approves Staffs proposal (1) to
deny Mrs. Cynthia Dennis Prays request that the Board waive the federal loan granted to her
by Collier County Housing and Human Services, (2) send a written demand to recover the
funds, and (3) not initiate litigation against Mrs Pray.
1/27/20099:00:00 AM
Meeting Date:
Prepared By
Colleen Greene
Assistant County Attomer
Date
County Attorney
County Attorney Office
1/15/20099:27:14 AM
Approved O}'
Jeff Klatzkow
Assistant County Attorney
County Attorney Office
Date
County Attorney
1/15/20091:08 PM
.A.pproved By
Colleen Greene
Assistant County Attomer
County Attorney Office
Date
County Attorney
1/15120Q9 2:05 PM
Approved B}'
OMS Coordinator
OMB Coordinator
Date
County Manager's Office
Office of Management & Budget
1/15/20093:2.9 PM
Approved BJ
John A. Yonkosky
County Manager's Office
Director of the Office of Management
Office of Management & Budget
Date
1/15/20096:24 PM
Approved By
James V. Mudd
County Manager
Date
Board of County
Commissioners
County Man~ger's Office
1/15/2009 ;:34 PM
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