By Kurtis Ming

RIPON (CBS13) – A Call Kurtis investigation found more than a hundred homeowners in Ripon may be stuck in their homes, unable to refinance or sell. The state budget could be trapping those families until someone can write them a simple letter. When one family struggled to refinance, they called Kurtis.

“I don’t plan on going anywhere, I love this town,” said Ryan Hern of Ripon.

He and his wife Megan, who are both teachers, are trying to refinance. Megan will likely lose her temporary position at the end of the school year.

They figure a refinance could save them close to $400 a month.

“It’d mean a lot. It’d mean whether we keep the house or not,” said Ryan.

They have two loans on the home he bought in 2004; a traditional loan for most of it and a GAP loan, from the City of Ripon’s former redevelopment agency. A GAP loan is basically a loan that has income restrictions. The Herns don’t make payments unless their income goes above a certain level.

The Herns can’t refinance that first loan, without a letter of subordination from the second lender, but there’s no one to write one. Ripon’s redevelopment agency no longer exists. Like others up and down the state, it was dissolved in the 2011-2012 state budget leaving cities to fund their own programs.

“I wish the legislature hadn’t done this to us,” said Ripon City Attorney, Tom Terpstra.

Terpstra says the City can’t legally write Ryan’s letter because they transferred the program to the Housing Authority of the County of San Joaquin.

“This is a small town, small city with a small budget, and really didn’t have many options as far as retaining those functions with no funding,” said Terpstra.

But the Housing Authority says it can’t write Ryan’s letter either because their federal funding doesn’t allow it.

“We did not accept the program,” said Alan Coon, who serves as general counsel for the Housing Authority of the County of San Joaquin.

Ripon homeowners, 126 of them, just like Ryan may be stuck in no man’s land, unable to refinance or even sell their homes because there’s no one to sign off on the transactions.

We turned to the state’s Finance Department which told us, “… The state is looking into whether it would be possible for a state entity to assume responsibility for processing letters of subordination…”

But the state gave us no time frame.

“It’s just not fair. Like I said, you feel like you’ve done things the right way and you’d hope, as long as you walk through the proper hoops that things would work out. But I guess it doesn’t,” said Ryan.

The Herns hope something happens before their house payments are more than they can afford.

“It’s just a lot of stress when you’re worried about providing for your family,” said Ryan.

At this point it appears no one is monitoring the outstanding loans to make sure homeowners who should be making payments are. Some homeowners had already been making payments and we’re told the city of Ripon will likely give that money to whomever ends up managing the loans.

Ripon is one of five California communities that decided not to continue the housing portion of its redevelopment agency and the local housing authority refuses to take it on.

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