Rehabilitation Review Committee

MINUTES OF THE REHAB REVIEW COMMITTEE MEETING FEBRUARY 17, 2010 8:45 AM Members Present: Chairman Rodney Bowie, Alderman H. Tucker Braddock, Joe East, Susan Goldman, and Jim Roberts Others Present: Denise Blake, Wayne Sharkey, and Aimee Wickless Chairman Rodney Bowie called the meeting to order at 8:48 AM. Motion was made by Tucker Braddock and seconded by Jim Roberts to accept the minutes of the January 13, 2009 meeting. The motion carried unanimously. Rodney Bowie made a motion to suspend the rules and adjust the order of the agenda items so that Aimee Wickless could discuss Reverse Mortgages first. All were in favor. New Business Discussion began with Wayne Sharkey introducing Aimee Wickless (of Brown- Jacobson) for a discussion regarding reverse mortgages, to help determine if and how the CD office can process potential applications with those terms. Wayne explained that CD does not currently have any specific guidance on applicants with reverse mortgages; however, when determining eligibility overall for both the lead and rehab programs, negative equity is not allowed. Wayne went on to explain that the term of the lead and rehab programs for the elderly (age 65 and over) is a 30-year deferred loan, so typically the funding loaned is recouped upon sale and/or transfer of the property and no monthly payments are required, which is positive for elderly since many of them are on very fixed incomes. Susan mentioned that the concern with reverse mortgages is that they are not clear-cut as to how much of the reverse mortgage is actually being utilized by the homeowner, therefore making it difficult to determine the equity status. Aimee Wickless stated that reverse mortgages are available to persons age 62 or older, and if for example, a person took out a reverse mortgage for $100,000 but might only pay out $35,000 to pay down debts, etc. So at the outset, this person will only be out $35,000, but down the line the maximum available is $100,000, so you will need to assume that the person will live through the entire loan, and the CD office would need to base determination of eligibility on the entire loan amount. Susan stated that that is what is generally done when, for example, an applicant has a home equity line of credit. The entire amount is considered as indebtedness, even if at the time application, only a portion of that line of credit has been used. In that sense, Aimee felt that reverse mortgages should be looked at for their entire face value, and as a result, are not any different than a traditional mortgage. She also offered to have a representative from a bank attend the next RRC meeting to clarify any other concerns or questions the committee might have. Rodney Bowie felt that no vote is necessary regarding the reverse mortgages specifically, just additional clarification within the policies and procedures that reverse mortgages will be considered in the same way a traditional mortgage or equity line of credit would. 1 Wayne noted that the classification as elderly for the lead and rehab programs is age 65 or older, but Aimee stated that to get a reverse mortgage, the minimum age is 62. This could potentially create a conflict in the deferred loan terms, and suggested that the committee consider (possibly at the next RRC meeting) changing the elderly age for both programs from 65 to 62. Old Business Wayne stated that there was no old business to discuss. New Applications Mr. Sharkey told the committee that there was one new property to be approved for the Lead and Rehab Programs. It meets the eligibility requirements, including paid taxes. Max. Lead Max Rehab RLP0909 OwnerOccupied 1 unit $13,000 $30,000 Motion was made by Joe East and seconded by Rodney Bowie to approve the new application. Motion carried unanimously. Tucker Braddock asked how much funding is currently available in both the lead and rehab accounts. Susan stated that $702,000 remains in the lead account for construction projects, but there is other funding within the grant for administration, training, etc. She also stated that while it may look as though a certain amount is available in the Rehab program, a portion of it is committed but not yet spent, so the balance doesn’t always reflect actual dollars available. Tucker asked if a report could be created to give a running account balance for each program. Susan stated she will provide this at the next meeting. Wayne Sharkey stated that the Lead program received the third quarterly report rating, and the office received another 100% score. Wayne said that this is very important to maintain exceptional scores and exceed goals, as this will help secure future funding for the program. Wayne is looking to apply for other grants in the future as well. The next Rehabilitation Review Committee meeting is scheduled for Wednesday, March 10, 2010 at 8:45 AM, and notification will be e-mailed with the minutes. Motion was made by Rodney Bowie to adjourn, seconded by Tucker Braddock. The motion carried unanimously. The meeting ended at 9:31 AM. 2