Reporting Kurtis Ming
Call Kurtis exposed more than a hundred Ripon homeowners who were stuck and unable to sell or refinance their homes because of the ending of a state program. But there has been progress since CBS13 aired its investigation in January.
Gap loans helped buyers afford homes. As long as they didn’t make above a certain amount of money, they didn’t have to pay the loans back. But after the state got rid of the agency that oversaw the program, more than one hundred homeowners in Ripon found themselves stuck.
“For us to get our loan now, is a really, really big deal,’ said Ryan Hern.
Hern and his wife, Megan are finally able to refinance their home to a payment they can afford. But it’s been a battle to get there.
When Hern bought the home in 2004, he took out two loans; a traditional loan for most of it and what’s called a gap loan, from the city of Ripon’s Redevelopment Agency.
Hern couldn’t refinance that first loan, without a letter okaying it from the second lender. But there was no one to write one, because Ripon’s Redevelopment Agency no longer exists.
It, just like others up and down the state were dissolved in the 2011-2012 state budget forcing cities to fund their own programs.
And CBS13 learned 126 Ripon homeowners just like Hern were stuck in no-man’s-land and unable to refinance or even sell their homes because there was no one to sign off on the transactions.
“I wish the legislature hadn’t done this to us,” said Ripon’s City Attorney Tom Terpstra in January.
Terpstra said they couldn’t legally write Hern’s letter because the city 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 said it couldn’t write Hern’s letter either because their federal funding doesn’t allow it.
“We did not accept the program,” The Housing Authority’s Alan Coon told CBS13 in January.
“It’s just a lot of stress when you’re worried about providing for your family,” said Hern when we first met him.
Back in January the Herns knew Megan would lose her teaching job at the end of the school year and were afraid they could no longer afford their home. But months after we got involved, the Herns learned of a huge development.
“And then finally… a letter!” exclaimed Hern.
The City of Ripon informed all of those borrowers they reached an interim agreement with the Housing Authority to transfer power back to the city, meaning the city could once again write letters, approving refinances and sales. Terpstra tells us they hope the state will step in and takeover the program eventually.
“It’s working now, yay! It’s actually working,” said Hern.
After getting their letter, the Hern’s refinance went through and their monthly house payment dropped $330.
“Just kind of a little relief knowing my wife’s not working this year and I think I’ll feel a lot more relief,” said Hern.
The family says their payments would have been lowered even more if they were able to get the interest rate they were locked in at last year, when they first wanted to refinance.
They did have to pay the city $97 to write that letter, which was something a loan officer we spoke with found odd.