RES 1998-2149 - Early depreciation of loan for Gwendolyn T Wells for rehabilitation of 2575 Pierce St '', O AHA,
` Planning Department
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City of Omaha Robert C.Peters
Hal Daub,Mayor Acting Director
Honorable President
and Members of the City Council,
Attached is a proposed Resolution allowing for the early depreciation of the principal of a deferred
payment loan executed by Gwendolyn T. Wells. The terms of the 1994 Deed of Trust securing this
loan provided for the partial financing of the rehabilitation of property located at 2575 Pierce Street,
such financing consisting of an HCD repayable loan in the amount of$11,350.00 and an HCD
deferred loan in the original amount of$20,000.00, subsequently reduced to $18,990.00. This
financing was provided through the Target Area Rehabilitation Program authorized by Resolution
No. 1633 adopted by the City Council on June 7, 1994.
Ms. Wells is unable to remain in Omaha and fulfill the occupancy requirements of the deferred loan.
She has also defaulted on her obligations related to her first deed of trust. A buyer has offered
$57,500.00 to purchase the property. This price is within the value range for the property as
estimated by market analysis. However, this amount is insufficient to pay off their current first
mortgage balance of$28,422.66,the City's second lien in the amount of$10,285.19, and the City's
third place lien in the amount of$18,990.00,as well as closing costs. Ms. Wells has requested that
the City depreciate the balance of the deferred loan to facilitate the sale of her property. The terms
of the Deferred Loan Promissory Note allow for the loan principal to depreciate 50%after five years
from the date of the Note and then 1/120th for each month thereafter. Although five years has not
transpired, the particular circumstances of this case warrant early depreciation in the amount of
$7,754.25. The depreciated balance due of$11,235.75,plus the balance of the repayable loan, will
be repaid at the time of sale from sale proceeds.
The proposed Resolution would allow for the early depreciation of the City's interest in the property
and repayment of a portion of the loan principal rather than the City suffering a total loss due to a
first mortgage foreclosure.
Your favorable consideration of the Resolution is requested.
Sincerely, Referred to City Council for Consideration:
• /- 11 5
- 7/Af---. 7. 2,./Z. Ot •
Robert C. Peters Date Mayor's Office/T tle 'l, Date
Acting Planning Director
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C-25A
CITY OF OMAHA
LEGISLATIVE CHAMBER
Omaha,Nebr 19
RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA:
WHEREAS, on June 7, 1994, an Agreement between the City of Omaha and
Gwendolyn T. Wells was approved by the City Council,by Resolution No. 1633, and executed by
the Mayor of the City of Omaha; and,
WHEREAS,the Agreement provided for the partial financing of the rehabilitation of
property located at 2575 Pierce Street, such financing consisting of an HCD repayable loan in the
amount of$11,350.00 and an HCD deferred loan,in the original amount of$20,000.00, subsequently
reduced to$18,990.00,the principal of which becomes due upon sale,lease or other transfer of any
kind or nature of the mortgaged property, or any part thereof, without the prior written consent of
the Mortgagee; and,
WHEREAS,the above-referenced financing is secured by a Repayable Loan Deed of
Trust recorded with the Douglas County Register of Deeds on July 14, 1994 in Book 4375 on Page
129, and a Deferred Loan Deed of Trust in Book 4375 on Page 148; and,
WHEREAS,Gwendolyn Wells is no longer able to occupy the Pierce Street property
and has obtained a buyer for that property; and,
WHEREAS, the purchase price of the property is insufficient to pay off the first
mortgage as well as the City's repayable and deferred payment loan Deeds of Trust in second and
third lien positions; and,
WHEREAS, Ms. Wells has requested that the City depreciate the principal balance
of the deferred payment loan in order to facilitate the sale of her property; and,
WHEREAS, it is in the best interests of the citizens of the City of Omaha that this loan
principal be depreciated and the property sold.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF OMAHA:
By
Councilmember
Adopted
City Clerk
Approved
Mayor (11)
• C-25A CITY OF OMAHA
LEGISLATIVE CHAMBER
Omaha,Nebr 19
PAGE-2-
THAT, as recommended by the Mayor, in consideration of the extenuating
circumstances regarding the ability of Gwendolyn T.Wells to comply with her loan obligations to the
City of Omaha related to her property located at 2575 Pierce Street, the City consents to the
depreciation of the original principal balance of the deferred loan in the amount of$18,990.00 by
0 1/120th for each month,or portion thereof,that has passed since the date of the Deed of Trust,June
7, 1994. The depreciated loan balance will be due along with the repayable loan balance upon the
sale of this same property. Be it further resolved that this depreciation applies only upon the sale of
the property.
AP ROVED AS TO 0" r.
0apaPA, 7 � y8
SIS ANT C ATTORNEY DATE
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