Explanation
BACKGROUND: The City uses Community Development Block Grant Funds (CDBG), HOME Funds and other sources of funding to make loans for housing development and rehabilitation. A requirement for receiving CDBG, HOME and other funds for construction and rehabilitation loans from the City is to obtain hazard insurance for the buildings on the premises. An authorized agreement between the City and a mortgage servicing agent currently exists for the management of the City's loan portfolio for construction or rehabilitation loans. The servicing agent acts on behalf of the City and as such is responsible for insuring that mortgagees maintain such insurance. In the event that a claim is made for repairs, the City and/or its servicing agent may be included as payee.
Steps include obtaining a signed contract detailing the repairs along with the name and address of the homeowner. The insurance company then issues a check to the homeowner, City and at times the servicing agency. The City Treasurer will endorse the check and it will be forwarded to the servicing agency for escrow until such repairs have been completed. Under such circumstances, it is the responsibility of the servicing agent to handle funds received as part of the settlement claim by placing the insurance funds in escrow and disbursing them for payment of damage repairs following inspections of the repairs by Department of Development staff and acceptance of repairs by the property owner.
This ordinance authorizes the City to endorse checks received pursuant to a hazard insurance claim settlement relative to properties on which the City has a mortgage as part of the CDBG, HOME or other program and to convey the endorsed check to the servicing agent.
FISCAL IMPACT: There is no fiscal impact.
Title
To authorize the City Treasurer to endorse checks received by the Department of Development pursuant to a hazard insurance claim settlement relative to properties on which the Cit...
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