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HomeMy WebLinkAboutMinutes Corpus Christi Community Improvement Corporation/Loan Review Committee - 06/17/1992 MINUTES OF LOAN REVIEW COMMITTEE JUNE 17, 1992 12 NOON STAFF PRESENT MEMBERS ABSENT Hector G. Vallejo, Program Manager Melody Cooper John Mulvenna, Administrative Assistant II Javier Leal L. David Ramos, Administrative Assistant I Armando Reyna Lana Taylor, Senior Secretary II Leroy San Miguel MEMBERS PRESENT Ernest Carter Burford Dobbins Ruben Fuentes Louis Garza Rose Huegele Paul Shamoun Forrest Smith Acting Chairperson Rose Huegele called the meeting to order in the Building Inspections' conference room. The first order of business was to introduce new members of the Committee, Mr. Bur Dobbins and Mr. Ruben Fuentes. The new members were replacing Servando Caballero and Sylvia Perez respectively. Ms. Huegele asked if a letter of thank you could be sent to those members who finished fulfilling their term of duty on the Committee, and chose not to serve for another term: Servando Caballero and Sylvia Perez. The next order of business was to approve the minutes of the April 10 and April 14, 1992 meetings. Ms. Huegele asked if there were any changes or corrections to the minutes. There being no changes or corrections, Ms. Huegele moved to approve the minutes as presented, seconded by Mr. Smith, passed unanimously. The next order of business was to elect a new Chairperson and Vice Chairperson. Mr. Vallejo stated that because Mr. Caballero was no longer on the Committee, it was necessary to vote for a new Chairperson and Vice Chairperson. The new Chairperson would conduct the meeting. Ms. Huegele asked if there were any recommendations. Mr. Smith nominated Ms. Huegele and Mr. Smith was nominated as Vice Chairperson. Mr. Garza moved to approve the nominations, passed unanimously. The following Single Family loan requests were presented: SCANNED Minutes of the Loan Review Committee June 17, 1992 Page 2 A demolition and replacement loan request for Henry H. and Mary H. Arguellas, 237 Edwards, in the amount of $33,400.00 at three 13%) percent interest amortized over a 20-year period. The loan included refinancing costs of S853.00 and a relocation grant of $1,750.00. Total monthly payment of principal, taxes and interest is $285.00. The Corporation will be in a first lien position. Ms. Huegele asked if the judgment on the abstract and the title search from the Credit Bureau had been received. Mr. Vallejo stated that he would look into the matter. Ms. Huegele stated that this was a case where all of the children used the parent's credit cards, thereby causing financial difficulties on Mr. and Mrs. Arguellas. Mr. Smith asked if the Arguellas' children had independent incomes. Mr. Vallejo stated that the daughter is receiving child support, but the two sons are not receiving an income. The Arguellas have a third son, living in Austin, who is paying on some of the bills listed. Mr. Dobbins asked how Mr. Arguellas was paying his current mortgage. Mr. Vallejo stated that the mortgage on the house has been paid off, but the new loan would have to pay off a paving lien in the amount of $853.00. Ms. Huegele asked whether any problems appeared during the title search the attorney conducted. Mr. Vallejo stated that none appeared and that part of their financial problems occurred when Mrs. Arguellas developed stomach cancer and had large medical bills, but she has now recovered. Mr. Dobbins asked that because he is an attorney for the Coastal Credit Union, who is the Arguellas' largest creditor, should he participate in this discussion or should he abstain because they owe such a large debt, and now they were going to be obligated for another debt which could affect his client? Mr. Vallejo questioned what Mr. Dobbins' connection to the Credit Union was. Mr. Dobbins stated that he represented the Credit Union in all matters. Ms. Huegele stated that, because this was a conflict of interest, Mr. Dobbins would have to abstain from voting on the loan. Mr. Vallejo explained to the Committee that he was presenting the case with two options. The reason being that Mr. Gonzales, the first contractor, filed a lawsuit against the City and we were waiting for a legal opinion on whether or not Mr. Gonzales can participate in the program. If the legal opinion comes back that he cannot participate, then we would go with the second contractor. Therefore, staff would like the Committee to act on both options. Mr. Garza moved to accept both applications as presented applicable to the decision made in the best interest of the applicant regarding lower monthly payments, seconded by Mr. Carter, passed with Mr. Dobbins abstaining. Minutes of the Loan Review Committee June 17, 1992 Page 3 A demolition and replacement loan request for Bacilia G. Constante, 2730 Mary, in the amount of $7,750.00 at zero percent amortized over a fifteen-year period. The loan request includes a 815,000.00 minimum deferred loan; a $3,300.00 grant.; and a $1,400.00 relocation grant. Total monthly payment of principal, taxes and interest is $95.06. The Corporation will be in a first lien position. Mr. Garza moved to approve the loan as presented and alter the years from fifteen to twenty-five, seconded by Mr. Smith, passed with majority vote. Ms. Huegele and Mr. Shamoun opposed. A rehabilitation loan request for Margaret Lucich, 3750 Topeka, in the amount of $25,746.00 at zero percent interest amortized over a ten-year period. The request includes a $15,000.00 minimum deferred loan and a $3,300.00 grant. Total payment of principal, taxes and interest is $138.08. The Corporation will be in a first lien position. Discussion continued on the number of years of the loan. Mr. Carter suggested that the Committee increase the years from ten to twenty or twenty-five to decrease Ms. Lucich's monthly payment. Mr. Smith suggested that it should be at the owner's option up to twenty-five years. Mr. Smith moved to approve the request, but increase the years from ten to twenty or twenty-five at the owner's option, seconded by Mr. Garza, passed unanimously. A demolition and replacement loan request for Emma G. Segovia, 9149 Stock, in the amount of $25,961 .00 at zero percent interest amortized over a ten-year period. The request includes a $15,000.00 minimum deferred loan, a $3,300.00 grant, and a 81,400.00 relocation grant. Total payment of principal, taxes and interest is $110.50. The Corporation will be in a first lien position. Discussion continued regarding how Ms. Segovia had acquired $18,000.00 in savings. It was determined that Ms. Segovia received the money from an insurance policy when her husband passed away. Mr. Dobbins wanted to know what the criteria was for determining the interest rate for each loan. Mr. Vallejo stated the criteria was determined by income, handicap, age or a combination of factors. Mr. Dobbins felt that Ms. Segovia could go to a bank for a loan because of her savings assets and free up HCD monies for persons that could not qualify to go elsewhere. Mr. Vallejo stated that Ms. Segovia could go to a bank, but she did meet all of the criteria for the HCD loan program so HCD could not turn down her application. Also, she may not want to use the money because of a future emergency such as a large Minutes of the Loan Review Committee June 17, 1992 Page 4 medical bill. Ms. Huegele stated that the Committee did not have the luxury of requesting an applicant go elsewhere and apply for a loan. The Committee could only review the request and approve or disapprove. Mr. Vallejo stated that if the Committee turned down the applicant, she could come back to the Committee only one more time. The system works on a first-come first-served basis. Mr. Carter moved to approve the request, seconded by Mr. Garza, passed with Mr. Dobbins opposing. Next order of business was the sale of foreclosed properties: A loan request for Isador Prado to purchase the property at 321 Anchor. Mr. Prado would be buying the house as an investor and would not live in it himself. The bid amount for the house is $13,200.00 with a down payment of $200.00 at three (3%) interest amortized over a twenty-year period. Total monthly payment would be $146.58. Total loan amount would be $14,350.00. At the April 14, 1992 meeting the question was raised that, since Mr. Prado was on HCD's contractor list, whether or not this was a conflict of interest. The Committee tabled the loan request until an opinion from the Legal Department was received. Mr. Vallejo presented the legal opinion to Ms. Huegele which stated that the Legal Department had determined Mr. Prado's purchase of this property was not a conflict of interest because Mr. Prado is an independent contractor and not a City employee. Ms. Huegele signed the loan request. The next order of business was listed under Other Business: At the April 14, 1992 meeting, Ms. Huegele had requested to periodically review a list of loans that were slow pay or past due. Mr. Vallejo presented the Committee with the CCHIC Delinquent Report dated May 31, 1992. In July, some delinquent accounts may be presented to the Committee for refinancing because, at the time of the previous loan, present financing terms were not available. It should give some owners the opportunity to lower their monthly payments and assist in keeping their account current. Mr. Smith asked if this included the rental rehabilitation loans they have approved. Mr. Vallejo answered yes, but funding does not come out of the same monies as single family loans. Ms. Huegele stated that some of the numbers on the delinquent report did not total Minutes of the Loan Review Committee June 17, 1992 Page 5 correctly. Mr. Vallejo stated that staff was trying to reduce the volume of copies made and maybe this was a good time to start streamlining the packets received by the members. Ms. Huegele suggested the specifications and drawings and the Recap of Bid form could be cut, but to include them in Mr. San Miguel's packet because he would probably want to look at it. Mr. Smith agreed with Ms. Huegele. Ms. Huegele said she did look at the last page and would like to continue receiving that, but the rest of the items, approximately ten pages, were totally unnecessary. Mr. Vallejo asked that the Committee look over the packets and determine just what was necessary for them to become familiar with the loan applications. Mr. Garza stated that he would like to entrust the decision to the Chairperson. Mr. Smith stated that he was in favor of cutting back the packets, as long as he got enough information to make a good decision. Ms. Huegele stated that she would like to see the appraisal because she did look at it. Mr. Vallejo asked if the Committee would like to see the affidavits. Ms. Huegele stated that she would like to see them. Ms. Huegele stated that the noon meeting has worked out well as far as attendance is concerned,and there have not been any quorum problems since moving to the noon hour. Mr. Vallejo stated that he was looking to have another meeting on Wednesday, June 24. Ms. Huegele said she could not attend that Wednesday, as she would be out of town. Mr. Smith stated that he would be on vacation next week. Ms. Huegele asked if Thursday, June 25, would be a good day to have a meeting. The rest of the Committee stated that either day would be fine with them. Mr. Vallejo said staff would work at setting up the next meeting for Wednesday or Thursday, if there was a quorum on either day. Mr. Shamoun asked how much money was left in the fund, and if we had the figure. Mr. Vallejo stated that right now we had expended all funds. There was $1.2 to $1 .3 million to work with in fiscal year 1991-92 and it has already been used. Next fiscal year (starting August 1, 1992), we will receive another million dollars. Mr. Shamoun said he was confused as to why the Committee was still approving loans, if there was no money left in the fund. Mr. Vallejo stated that what we are doing is getting ready for August, and we will try and get these loans through the Home Program. For loans that were approved at this meeting, a work order would be approved sometime in August. Mr. Shamoun questioned that we had already given away a portion of next year's million dollars. Mr. Vallejo agreed. Mr. Fuentes asked if the payments the homeowner's make come back to the City to be reprogrammed. Mr. Vallejo stated that the payments were reprogrammed into all the CDBG funding. Mr. Carter asked if monies left over from the rental rehab program were going into the CDBG program. Minutes of the Loan Review Committee June 17, 1992 Page 6 Mr. Vallejo stated that rental rehab was a different program and those funds could not be moved into other programs because they are controlled by HUD. Mr. Smith would like to know approximately how much receipts per month we are getting back from existing loans. Mr. Vallejo stated that it averaged out to approximately $38,000 to 548,000 per month. Mr. Smith stated that would fund at least one new loan a month. Mr. Vallejo said one or probably two loans. Ms. Huegele asked the Committee if they looked at the Recapitulation of Bid form sheets. Mr. Dobbins stated that he did not understand it. Mr. Vallejo answered that the form show the bid amount of each contractor. Ms. Huegele suggested that staff could have the information at the meeting and if any questions arose they could be answered at the meeting. Ms. Huegele stated that deleting this form from the packet would cut down on the paper used. The next meeting was tentatively scheduled for Wednesday, June 24, 1992 at noon. There being no further business, the meeting adjourned. mm.H.n.S2