Wednesday, May 11, 2011

Posting of Contract With Further Development for Pilot Hardest Hit Program in Deschutes and Jackson Counties.

In response to my public records request OHCS/OHSI staff have provided me with a copy of the executed contract HERE with Further Development LLC to help operate a $10 million Hardest Hit pilot program in Jackson and Deschutes counties. (The President of Further is Bend based Erik Sten, former City of Portland Commissioner, whose portfolio included the Bureau of Housing and Community Development).

This program will acquire at a significant discount the existing mortgages of homeowners who are working, and help those families get a new mortgage based on the current value. The target group as stated in the contract is : 
.. homeowners who have recovered from a financial hardship, are saddled with negative equity mortgages, and demonstrate the capability to pay a loan refinanced at the home’s current value.
As these new mortgages are paid off sales proceeds will revolve back to help additional homeowners [less any discounts payable to Further]; the projection is that the program will help an estimated 330 homeowners over 5 years.

Some items I noted in reviewing the contract.
  • It provides a flat payment of $50,000 per month, with a maximum of $5 million, including incentive payments.
  • It provides for a possible quarterly incentive payment in addition to the monthly payment.
  • OHSI has the ability to terminate the contract for its convenience with a 30 day notice.
  • It includes a detailed Statement of Work, outlined in Exhibit A, [starts on PDF page 11]. That work includes "high touch" follow up for 3 months after the acquisition.
  • It appears that OHCS will be funding the acquisition loans, with Further then facilitating the taking out of those loans in the secondary market. 
Stay Tuned
As the program gets closer to a summer roll out I expect more information will become available, including how the application process will work and some examples of how the program might work financially to insure that revolving funds are available to reach the target number of loans. 
Originally created and posted on the Oregon Housing Blog.

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