Bill Text: CA AB2043 | 2009-2010 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Redevelopment funds: mortgage assistance.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2010-05-28 - In committee: Set, second hearing. Held under submission. [AB2043 Detail]

Download: California-2009-AB2043-Amended.html

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BILL NUMBER: AB 2043	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 19, 2010

INTRODUCED BY   Assembly Member Torrico

                        FEBRUARY 17, 2010

   An act to amend Sections 33020 and 33021 of, and to add  and
repeal  Section 33137  to   of  , the
Health and Safety Code, relating to redevelopment.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2043, as amended, Torrico. Redevelopment funds: mortgage
assistance.
   The Community Redevelopment Law authorizes the establishment of
redevelopment agencies in communities in order to address the effects
of blight, as defined, in those communities and requires those
agencies to prepare, or cause to be prepared, and approve a
redevelopment plan for each project area.  Existing 
 That  law authorizes the  agency  
agencies to  use  of  tax increment financing
for redevelopment projects and  for the  repayment
of redevelopment  agency  debts.
   This bill would redefine the term "redevelopment" to include the
provision of loan assistance to qualified homeowners 
participating in the federal Home Affordable Modification Program
  , until January 1, 2016, as determined by the agency
 . The bill would authorize a redevelopment agency to use
redevelopment funds to issue  loans, up to a maximum of
$75,000   a subordinate loan limited to low- and
moderate-income borrowers and to owner-occupied homes  , to
reduce the principal  mortgage  balance  on the
home mortgages  of  a borrower that has received a
mortgage modification under the federal Home Affordable Modification
Program and meets other specified requirements  
qualified homeowners, as prescribed, who reside in or outside of the
project area. The bill would authorize the use of funds outside the
project area only upon a specified resolution of the agency and the
legislative body. The bill would authorize the issuance of a
subordinate loan only upon the agreement of the lender to reduce the
principal balance of the primary loan so that the loan-to-value ratio
is equal to or less than 110%. The bill would repeal this
authorization on January 1, 2016  .
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 33020 of the Health and Safety Code is amended
to read:
   33020.  "Redevelopment" means the planning, development,
replanning, redesign, clearance, reconstruction, or rehabilitation,
or any combination of these, of all or part of a survey area 
,   ;  the provision of those residential,
commercial, industrial, public, or other structures or spaces as may
be appropriate or necessary in the interest of the general welfare,
including recreational and other facilities incidental or appurtenant
to them  , the provision of   ; 
assistance to qualified homeowners under Section 33137  until
January 1, 2016;  and payments to school and community college
districts in the fiscal years specified in Sections 33681, 33681.5,
33681.7, 33681.9, and 33681.12.
  SEC. 2.  Section 33021 of the Health and Safety Code is amended to
read:
   33021.  Redevelopment includes:
   (a) The alteration, improvement, modernization, reconstruction, or
rehabilitation, or any combination of these, of existing structures
in a project area.
   (b) Provision for open-space types of use, such as streets and
other public grounds and space around buildings, and public or
private buildings, structures and improvements, and improvements of
public or private recreation areas and other public grounds.
   (c) The replanning or redesign or original development of
undeveloped areas as to which either of the following conditions
exist.
   (1) The areas are stagnant or improperly utilized because of
defective or inadequate street layout, faulty lot layout in relation
to size, shape, accessibility, or usefulness, or for other causes.
   (2) The areas require replanning and land assembly for reclamation
or development in the interest of the general welfare because of
widely scattered ownership, tax delinquency, or other reasons.
   (d) Issuance of loans to reduce the principal balance on the
mortgages of qualified homeowners  participating in the
federal Home Affordable Modification Program.   under
Section 33137 until January 1, 2016. 
  SEC. 3.  Section 33137 is added to the Health and Safety Code, to
read:
   33137.   (a)    An agency may use redevelopment
funds to issue  subordinate  loans to reduce the principal
 mortgage balance of a qualified borrower who has received a
mortgage modification under the federal Home Affordable Modification
Program and has a mortgage payment that exceeds 31 percent of gross
income. Loans issued pursuant to this section shall be limited to
seventy-five thousand dollars ($75,000).   balance on
the home mortgages of qualified homeowners, as specified in
subdivision (g) and determined by the local agency, who reside in or
outside of the project area. The agency may use these funds outside
the project area only upon a resolution of the agency and the
legislative body that the use will be of benefit to the project area.
 
   (b) The funds authorized by this section shall not include the
20-percent set aside funds for the construction of low- and
moderate-income housing required under Section 33334.2.  
   (c) Any subordinate loan authorized by this section shall be
issued only if the lender agrees to modify an existing home mortgage
to reduce the principal balance of the primary loan so that its
loan-to-value ratio is equal to or less than 110 percent.  
   (d) The subordinate loan provided by the agency shall be no more
than 15 percent of the remaining balance of the primary loan after
its loan-to-value ratio is reduced pursuant to subdivision (c). 

   (e) It is the intent of the Legislature that the subordinate loan
authorized in this section provide leverage to secure greater
principal reduction. It is further the intent of the Legislature that
the subordinate loan have a rational relationship to the amount
needed to prevent foreclosure and to the present value of the
forgiven principal.  
   (f) The subordinate loan, plus any applicable fees or interest
charges as determined by the agency, may be repaid to the agency upon
sale or refinance of the home. Prior to the sale or refinance, no
monthly payments shall be owed to the agency that holds the
subordinate loan.  
   (g) The subordinate loan shall be limited to low- and
moderate-income borrowers and to owner-occupied homes.  
   (h) This section shall remain in effect only until January 1,
2016, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2016, deletes or extends
that date.