Morgan Hill officials are mulling a new plan to deal with the
amount of below-market-rate homes approaching foreclosure by giving
additional authority to City Manager and Redevelopment Agency
Executive Director Ed Tewes. They’re attempting to address a
problem that arose when city staff learned that 14 homes in the
city’s affordable housing program were on their way to foreclosure.
Some of those notices came just weeks, or even days, before a
trustee sale, making it difficult for the city to take action to
purchase the home and keep it in the city’s affordable housing
inventory, said Business Assistance and Housing Service Senior
Project Manager Erwin Ordonez.
Where is the breakdown?
Morgan Hill officials are mulling a new plan to deal with the amount of below-market-rate homes approaching foreclosure by giving additional authority to City Manager and Redevelopment Agency Executive Director Ed Tewes. They’re attempting to address a problem that arose when city staff learned that 14 homes in the city’s affordable housing program were on their way to foreclosure. Some of those notices came just weeks, or even days, before a trustee sale, making it difficult for the city to take action to purchase the home and keep it in the city’s affordable housing inventory, said Business Assistance and Housing Service Senior Project Manager Erwin Ordonez. In a normal year, at most two BMR homes enter foreclosure.
City mulls hastening process
To combat the problem and keep the stock of affordable homes healthy, Redevelopment Agency board members (city council members) adopted new criteria for the city to purchase such homes. And, to hasten the process, the board gave Tewes authority to approve the purchase of such homes for one year. That’s a good first step, because State law requires all cities to provide a certain amount of affordable and low-income homes.
Fix the miscommunication
But the larger question that not only needs an answer but a remedy, is why is the city not notified as soon as affordable housing homeowners default on their loans? Where is the communication breakdown? Does the city not have proper language in its mortgages, or is the county or banks failing to properly notify the city? The city must examine the BMR program and find a way to be notified immediately upon any BMR home beginning foreclosure procedures. Of course the city should be purchasing those homes at foreclosure prices and they should be put back into the affordable housing stock. Really, it should not be that difficult to remedy.
Contact City Manager Ed Tewes at 779-7271 or ci*********@***********ca.gov
