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Home My WebLink About1983-132 1 2 3 4 RESOLUTION NO. 83-132 RESOLUTION OF THE CITY OF SAN BERNARDINO APPROVING AND ADOPTING COLLECTION PROCEDURES AND FORECLOSURE POLICIES RELATING TO THE COMMUNITY DEVELOPMENT BLOCK GRANT REHABILITATION LOANS. 5 WHEREAS, the City of San Bernardino is the recipient of Community 6 Development Block Grant Funds; and 7 WHEREAS, said funds, administered by the Community Development 8 Commission, are used in part for a rehabilitation program; and 10 relating to collections and foreclosures in connection with Community 9 WHEREAS, HUD has recommended the adoption of established procedures 11 Development Block Grant rehabilitation loans. 12 NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 13 14 15 hereto as Exhibit "A", relating to the collection and foreclosure of rehabilitation SECTION 1. The Collection Procedure and Foreclosure Policy, attached 16 loans, is hereby approved and adopted. 17 SECTION 2. The Community Development Commission of the City of San 18 Bernardino is hereby charged with the responsibility of implementing the collection 19 procedure and foreclosure policy herein adopted as it relates to Community 20 Development Block Grant Rehabilitation Loans. 21 I HEREBY CERTIFY that the foregoing resolution was duly adopted by the 23 22 Mayor and Common Council of the City of San Bernardino at a n adjourned regular meeting thereof, held on the 9th day of Mav , 1983, by the 24 following vote, to wit: 25 26 27 28 AYES: COUNCIL MEMBERS Castaneda, Reilly, Hernandez, Marks, Ouiel, Strickler NAYS: None ABSENT: Council Member Hobbs ~;J#7/dld~ / City Clerk 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 May The foregoing resolution is hereby approved this /():;;i day of , 1983. Approved as to form: k)~~t~ City ttorney - 2- COLLECTION PROCEDURES In order to maintain a low delinquency rate, time is of the essence. Prompt action must be taken when an account becomes delinquent. Generally, Borrowers are conscientious in paying their accounts. but unforeseen circumstances can arise, which cause a hardship on the Borrowers. Since the program concentrates on low-to-moderate income Borrowers. their budget is usually very tight. and, therefore, arrangements on a delinquent account should be made as soon as possible. This does not mean the delinquent status should be taken for granted or overlooked. 1) Accounting - By the 10th of each month a "Community Development Aging of Notes Receivable" report will be completed by the Accounting Department. Copies will be distributed to the Operations Coordinator, Loan Counselors. and Executive Director. 2) Collection - It is the Loan Counselor's responsibility to contact the Borrower or designate a collection form letter to be sent to the Borrower. When the account is 30 days delinquent, collection form 1 etter #1 shoul d be sent. The Loan Counse 1 or wi 11 send out the 1 etter with a 10-day suspense. The Loan Counselor wi 11 foll ow up on the letter, or, if the Borrower contacts the office, repayment arrangements will be discussed and approved by the Operations Coordinator or the Executive Director. Any changes in the Borrower's financial status should be determined at this time; if appropriate, financial counseling should also be offered. When repayment arrangements are agreed upon, a repayment form will be completed, if the term of repayment exceeds a month's time. Continual moni tori ng of repayment arrangements is necessary, so the Borrower is not allowed to continue the account in a delinquent status. If no response is made by the Borrower after the #1 letter is sent, the procedures listed in the Foreclosure Policy shall be initiated. EXHIBIT "A" FORECLOSURE POLICY Prompt action shall be taken to collect amounts due from the borrowers to mi nimi ze the number of accounts in a del i nquent or default status. In determining cause to foreclose, the circumstances peculiar to each individual case must be taken into account. When it is apparent the borrower is unwilling to cooperate, then the property should be foreclosed upon. 1. When the account is del inquent two months, and no contact from the borrower has been made, collection form letter #2 will be sent, certified mai 1, to notify the borrower of the default status of the account. There should be a 10-day suspense date to follow up on the letter. If the account is reinstated and again becomes delinquent, collection form letter $1 will be sent, followed by collection form letter #2. 2. If the account is not reinstated after the #2 letter is sent, then collection form letter #3 will be sent by certified mail. Every reasona 1 be effort shoul d be made to have a face-to-face i ntervi ew with the borrower to determine the cause of the del inquency and obtain the necessary verification of any changes in the borrower's financial status. The interview should be completed prior to the account becoming 3 months delinquent. If, at the interview or by phone, a repayment arrangement is made, a form stating the arrangement shall be completed and signed by the borrower. If default occurs under the written repayment arrangement, the borrower must be contacted or a reasonable attempt to arrange an interview must be made wi thi n 30 days before foreclosure is commenced. If arrangements were made in person, no 3D-day grace period is required before foreclosure is commenced. 3. Foreclosure can be commenced only if the account is 3 months delinquent and all of the procedures have been followed in Paragraph 1 above. A request for Notice of Default will be completed for the Trustee and a check for the fee deposit will be drawn. Approval for foreclosure will be requested. Approval to foreclose will be requested by memo to the Executive Director, and the City Adrri ni strator shall be noti fi ed of our intent. Proceedi ngs wi 11 be completed by the Trustee in accordance with applicable State laws. 4. REINSTATEMENT The borrower shall be permitted reinstatement of the account, even after the insti tuti on of foreclosure proceedi ngs, if the borrower tenders in a 1 ump sum all amounts requi red to bring the account current, including foreclosure costs and reasonable attorney's fees and expenses properl y associ ated wi th the foreclosure acti on. Reinstatement may not be accepted if any of the following conditions exists: (1) the borrower was reinstated after foreclosure proceedings had been instituted in the prior 2 years immediately preceding the current foreclosure action. (2) reinstatement will preclude foreclosure foll owi ng a subsequent defaul t, or (3) reinstatement will adversely affect the priority of the mortgage lien. MEMBERS 'W.R "808" HOLCOMB. CHAIRMAN .ROBERT A. CASTANEDA STEPHEN MARKS JACK REIU-V JOHN D. HOBBS JACK STRICKlER RALPH HERNANDEZ GORDON QUIEL REDEVEWPMENT AGENCY OF THE CITY OF SAN BERNARDINO, CALIFORNIA GARY VAN OSDEL EXEClITTVE DIRECTOR GLENDA SAUL DEPUTY DIRECTOR LOAN COLLECTION FORM LETTER '1 Payment on your COlTITuni ty Development Loan # for the month of is now past due. Please remit your payment of $ immediately. Please call 383-5081 if there is a problem or if you have any questions. Sincerely, Loan Counselor CITYHALL . 3OONORTH"D"STREET . RM.320 . SANBERNARDINO,CALIFORNlA92418 . PHONE: (714) 383-5081 TELEX: 675-508 MElIIBERS -W.R "BOB" HOLCOMB. CHAIRMAN ,ROBERT A. CASTANEDA STEPHEN MARKS JACtC. REILLY JOHN D. HOBBS JACK STRICKLER RALPH HERNANDEZ GORIX>N QUlEl REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, CALIFORNIA GARY VAN OSDEL EXECl!T1VE DIRECTOR GLENDA SAUL DEPUIT DIRECTOR LOAN COLLECTION FORM LETTER #2 Payments on your Community Development Loan # months of past due. Under the terms of the loan, a late charge of % of the amount past due may be imposed; or, if payments are not brought current, the City may elect to foreclose. for the a re now Please remit your payment for months immediately. Please call 383-5081 if you have any questions. Sincerely, Operations Coordinator CITYHALL. 3OONORTH"D"STREET . RM.320 . SANBERNARDINO.CAUFORNIA92418 . PHONE: (714) 383-5081 TELEX: 675-508 MEMBERS . . W.R "BOB" HOLCOMB, CHAIRMAN ROBERT A. CASTANEDA STEj'HEN MARKS JACK REILLY JOHN D. HOBBS JACK STRICKLER RALPH HERNANDEZ GORDON QUIEL REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, CALIFORNIA GARY VAN OSDEL EXECUTIVE DIRECTOR GLENDA SAUL DEPUTY DIRECTOR LOAN COLLECTION FORM LETTER '3 Dear Payments on your Community Development loan # months of due. for the are now past Kindly remit your payment for months immediately. Unless other satisfactory arrangements are made, payment must be made by If no such payment or a rrangements a re made, the City wi 11 exerci se its ri ght to foreclose upon its Trust Deed. Thi s may result in the loss of your home. Please call 383-5081, if you have any questions. Sincerely, Executive Director CITYHAU.. . 3OONORTH"D"STREET . RM.320 . SANBERNARDINO,CALIFORNIA92418 . PHONE: (714) 383-5081 TELEX: 675-508