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HRA approves purchase agreement to recover $7,500 from foreclosed property lien
Summary
Hubbard County HRA approved a purchase agreement that would let an outside investor pay the HRA's $7,500 down-payment-assistance lien if the investor redeems a foreclosed property before the sheriff's-sale redemption period ends.
The Hubbard County Housing and Redevelopment Authority approved a purchase agreement to recover a $7,500 down-payment-assistance lien on a property currently in foreclosure, and authorized the HRA director to sign the agreement for administrative expediency.
Mary, HRA director, told the board that an investor who purchased the property at the sheriff's sale offered to redeem the property during the remaining redemption period by paying off liens and other costs. “They would be purchasing the property as is,” Mary said, and the investor’s stated plan is to perform “minor rehab, and then resell it as opposed to rental.”
The agreement would require the investor to pay off the HRA’s outstanding $7,500 so the HRA receives the principal back into its down-payment-assistance fund. Mary said that, absent this route, the foreclosure process could leave the HRA with only a judgment in small-claims court and a low likelihood of collection.
Board members discussed timing and mechanics. The board agreed the purchase agreement can be signed now and that assignment of the mortgage and deed would occur later at or just before closing; Mary said the assignment likely would require notarization close to the end of the redemption window. The board voted to approve the lien purchase agreement and to authorize Mary to sign the purchase-agreement documents now so the HRA can be paid if the investor redeems the property.
No formal vote tally was recorded in the meeting transcript beyond “aye” and “motion carried.” The board did not adopt any further policies or additional obligations for future foreclosures during the discussion.
The HRA director said the investor told staff the property appears abandoned and that the investor would pay outstanding mortgage balances, legal fees and costs in addition to the HRA lien in order to obtain clear title during the redemption period. Mary also noted she had the relevant state statutes on redemption but had not read them aloud at the meeting.
The board record shows the action was administrative: approval of the purchase agreement and direction that staff execute the agreement now and complete the assignment/mortgage paperwork at closing if the investor proceeds. No sale of the property by the HRA or changes to the HRA’s policies were approved.
The HRA indicated the recovered funds would be returned to the down-payment-assistance program rather than used for other purposes.
