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HomeMy WebLinkAbout08344ORDINANCE NO. 8344 AN ORDINANCE APPROVING AND AUTHORIZING THE EXECUTION OF A MEMORANDUM OF UNDERSTANDING BETWEEN PUEBLO COUNTY AND THE CITY OF PUEBLO, A MUNICIPAL CORPORATION CONCERNING MORTGAGE LOAN ORIGINATION UNDER THE HOME CONSORTIUM BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The Memorandum of Understanding between the City of Pueblo, a Municipal Corporation, and Pueblo County, relating to the origination of residential mortgage applications for the County’s down payment and rehabilitation loans, is hereby approved substantially in the form attached hereto, with such minor changes therein as shall be approved by the President of City Council and the City Attorney, is hereby approved. SECTION 2. The President of City Council is hereby authorized to execute and deliver said memorandum of understanding in the name of and on behalf of the City of Pueblo, a Municipal Corporation, and the City Clerk shall affix the seal of the City thereto and attest the same. INTRODUCED: April 11, 2011 BY: Larry Atencio COUNCILPERSON PASSED AND APPROVED: April 25, 2011 _ Background Paper for Proposed ORDINANCE # R-9 DATE: AGENDA ITEM APRIL 11, 2011 DEPARTMENT: HOUSING AND CITIZEN SERVICES DIRECTOR – ADA RIVERA CLARK TITLE AN ORDINANCE APPROVING AND AUTHORIZING THE EXECUTION OF A MEMORANDUM OF UNDERSTANDING BETWEEN PUEBLO COUNTY AND THE CITY OF PUEBLO, A MUNICIPAL CORPORATION CONCERNING MORTGAGE LOAN ORIGINATION UNDER THE HOME CONSORTIUM ISSUE Should the City Council approve the Memorandum of Understanding (MOU) with the County, which provides for City Staff to underwrite loans for the County's HOME Programs for a set fee? RECOMMENDATION Approval of the Ordinance. BACKGROUND Under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act”) loan originators are required to be licensed by the State of Colorado as a “Loan Originator.” The County does not have licensed staff members, and wants to enter into an agreement with the City to underwrite their HOME Program loans. The City’s Loan Coordinator is licensed by the State. The County will reimburse the City for the Loan Coordinators time. The City currently underwrites the County’s Downpayment Assistance Loans at no cost to the County. This MOU will incorporate all the County Programs and will charge for those services. It is anticipated that no more than 5 loans will be underwritten. Current staff can undertake the work. FINANCIAL IMPACT The County is using HOME funds to pay for the City service and therefore these funds are considered program income and have all the general restrictions of the HOME Program. MEMORANDUM OF UNDERSTANDING CONCERNING MORTGAGE LOAN ORIGINATION UNDER THE HOME CONSORTIUM THIS MEMORANDUM OF UNDERSTANDING is made and entered into this 25th day of April , 2011, by and between the City of Pueblo, a Municipal Corporation, (hereinafter referred to as the "City "), and Pueblo County, Colorado (hereinafter referred to as the "County "), WITNESSETH. WHEREAS, City and County (collectively, the "Parties ") have heretofore entered into a Consortium Agreement effective October 1, 2009 (the "Agreement "), under which they formed and continued a Consortium for the purpose of receiving certain federal funds and undertaking housing assistance activities pursuant to the HOME Investment Partnerships Program ( "HOME Program ") as a Participating Jurisdiction in accordance with the provisions of said Agreement; and WHEREAS, the HOME Program allows the Parties to grant residential mortgage loans for the purpose of down payment assistance and rehabilitation programs, WHEREAS, the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 ( "SAFE Act ") requires that any individual employed at a non -profit or government agency who accepts applications for residential mortgage loans, and who offers or negotiates terms of a residential mortgage loan for compensation or gain, be licensed by the State of Colorado as a "Loan Originator ", and WHEREAS, the City has a licensed mortgage Loan Originator on staff underwriting its down payment and rehabilitation loans, and WHEREAS, the County does not employ a licensed Loan Originator; and WHEREAS, the parties desire to set forth in this Memorandum their mutual understanding concerning the origination of loans pursuant to the HOME Program guidelines NOW, THEREFORE, in consideration of the mutual covenants and promises herein, the parties agree as follows 1 The Parties agree that the City shall act as the Loan Originator for all down payment assistance and rehabilitation loans issued pursuant to the HOME Program. As the Loan Originator, the City will review any applications for down payment assistance and rehabilitation programs provided to it by the County, collect information from the applicant, offer and negotiate terms for loans, advise the applicant of the loan terms, prepare loan packages, and supervise the underwriting process. 2 The County shall pay the City thirty -one dollars and seventy -four cents ($31 74) per hour for this service. The City shall provide the County with periodic, but not more frequently than monthly, invoices for payment. Thereafter, the County shall pay the City the amount due within thirty (30) days of the date of the invoice. The City may discontinue this service if the County fails to remit payment within sixty (60) days of the date of the invoice. 3 Each party shall retain authority over its respective housing programs and agencies carrying out such programs on behalf of each party Each party shall set its own priorities for the use of any grant monies received by the Consortium and shall retain the right to determine how those funds attributed to each entity shall be expended in meeting those pnorrties. 4 This Memorandum shall become effective as a supplement to the Consortium Agreement immediately upon approval by the respective govenung bodies of each of the Parties, and shall terminate on December 31, 2011 5 Except as modified and supplemented by this Memorandum, all of the provisions set forth in the Consortium Agreement shall continue in full force and effect and shall apply to the operation -of -the Consortium. -- IN WI -TNESS WHEREOF, the parties have entered into this Agreement the day and year first above written. ATTEST PUEBLO COUNTY, COLORADO By. —. i By atP00117.-- Clerk to the Board- ,/ C irperson, Board of County Commissioners ATTEST CITY OF PUEBLO, A UNICI' AL CO' ' ORATION I B Y City Cl President of thd City Council