City of Madison, Wisconsin | Legislative Information Center
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File #: 26484    Version: 1 Name: Authorizing the Community Development Division (CDD) and Finance Department to write off $14,100 of a $15,000 mortgage loan debt between the City of Madison and Brenda Boylan for the property at 1921 Huxley Street due to borrower hardship.
Type: Resolution Status: Passed
File created: 5/24/2012 In control: BOARD OF ESTIMATES (ended 4/2017)
On agenda: 7/3/2012 Final action: 7/3/2012
Enactment date: 7/5/2012 Enactment #: RES-12-00490
Title: Authorizing the Community Development Division (CDD) and Finance Department to write off $14,100 of a $15,000 mortgage loan debt between the City of Madison and Brenda Boylan for the property at 1921 Huxley Street due to borrower hardship.
Sponsors: Tim Bruer, Lauren Cnare, Matthew J. Phair, Satya V. Rhodes-Conway
Attachments: 1. Resolution Memo 1921 Huxley.pdf
Fiscal Note
The City of Madison has a variety of loan programs, administered primarily by the City's Community Development Division (CDD) and Economic Development Division (EDD), that provide financial assistance to residents to enable the purchase and/or rehabilitation of residential properties. CDD estimates that the City currently has approximately $20 million invested in owner-occupied properties, with individual loans ranging from $1,200 to $128,223; the average loan balance is $21,000. The vast majority of funding for the loans is derived from Federal HUD and other grant monies.

While CDD estimates that the foreclosure rate in which City funds are invested is below 2% (in 2011, CDD estimates total write off amounts of approximately $155,000 due to foreclosure actions), in the event of a bank foreclosure on a residential property, the City is likely to lose its investment. The loss of these funds means that these proceeds are not available for re-investment in other projects.

For distressed properties, a short sale allows for a negotiated settlement among the City, private lending institutions, and homeowners, which may preclude a foreclosure and allow the City to recover some of its investment. CDD estimates that there have been 5 requests for short sales over the past three years.

The Resolution authorizes a write-off of $14,100 of $15,000 mortgage loan. This will preclude the re-use of these funds for other projects.
Title
Authorizing the Community Development Division (CDD) and Finance Department to write off $14,100 of a $15,000 mortgage loan debt between the City of Madison and Brenda Boylan for the property at 1921 Huxley Street due to borrower hardship.
Body
WHEREAS, City of Madison provided a $15,000 deferred payment mortgage loan to the homeowner at 1921 Huxley Street in 2004 when the homeowner bought the property from Operation Fresh Start for $125,000. The property has been on the market since 2008 with only one offer in 2009 which...

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