The URL can be used to link to this page

Home My WebLink About1990-11-13; Rehabilitation Loan Committee Ad Hoc; MinutesAdjourned Loan Committee Meeting November 13, 1990 1O:OO a.m. Attendees: Committee Members: Jim Elliot Staff: Kathy Graham, Lynn Brown Guests: Phil Wilson and Jeff Stone, San Diego Trust and Savings Jim Elliot asked the questions of the bank representatives which were outlined in an October 29, 1990, letter. Phil Wilson explained that the subsidy the city is providing to the interest makes the loans affordable to the applicant even though they are low income. The ratio of debt to income varies. The standard the bank uses is 35% to 45%. When the interest is lower the loan is less and therefore the ratio is better. San Diego Trust is not a collateral lender. Their goal is to get their money back. They do not have a specific standard but look at the cash flow of the applicant. Under I.D. of the agreement the fees for a loan up to $25,000 would be about $200. Anything over that loan amount which would cause higher fees would be paid by the city out of the administrative fund. The administrative fund would be a checking account for the city to keep the project administration funds to cover items such as printing and consultant salary. The representatives of the bank said that the city could contract with the Bank escrow service to provide the necessary paper work for deferred loans. (See letter from bank on fees) 1I.A. Loss reserve account is a pool of funds to cover bad loans. Ten percent (10%) of all loans go to cover the account. If there is a bad loan, the bank offers the city the right to buy the loan. If the city does not, then the bank forecloses and sells the property at a trustee sale. If the bank sells the property and loses money then the bank is reimbursed out of the loss reserve account. The city is then responsible for replenishing the fund so that there is always the equivalent of 10% of all loans. Jim Elliot announced that the new treasurer will be on board December 4 and may need to meet with the bank. He will be responsible for setting up new accounts. Meeting adjourned.