Middletown's Shrinking Rehab Revolving Loan Fund

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   Twenty-seven years ago the City of Middletown first allocated $250,000 of HUD Community Development Block Grant (CDBG) funds to establish a Housing Rehabilitation Revolving Loan Fund (HRRLF).  Its' purpose was to make available below market rate repayable loans for income-eligible, target area homeowners to remedy housing code violations and other basic deficiencies.

To date over $4.0 million in CDBG funds have been budgeted for this purpose with an undetermined number of single-family homes being rehabilitated.  However, with a present cash balance of $500,000+ and $1.0+ million in repayable mortgage loans, what's happened to the $2.5+ million (not including interest earned) that's unaccounted for?
According to Skip Batten, a long-time employee of the Community Revitalization Department, approximately $300,000+ in non-performing loans were written off by him and a member of the Finance Department in the fall of 2006.  Additionally, according to him, upwards of $500,000+ in previous non-performing loans were written off by the former Finance Director and the Planning Director in the early part of this decade.

When this information became known in April of 2008 the former Community Development Administrator ("RESIGNED") and members of the now-defunct HUD Consolidated Planning Committee (Chris Amburgey, Paul Renwick, Bert Grimes, Robyn M. French, Walter Leap, Cheryl Burns and Rosa Lean Lindsey) began meeting on an almost weekly basis.

They developed loan servicing procedures that had not been in place for a number of years in an effort to prevent newer loans in the shrinking portfolio from becoming non-performing as well.

Since no Guidelines and Procedures for the Housing Rehabilitation Program were in place since Mr. Batten's hiring in the early part of this decade, the CD Administrator and Consolidated Committee members prepared a "final draft" that was presented to senior city staff and the City Council Housing Sub-Committee at the July 2008 meeting.  Please note that the Planning Director disagreed with Mr. Batten's recollection and provided the CD Administrator a copy of guidelines and procedures that he used for this program activity in the 1990's before accepeting a position at that time in Lebanon.

Mr. Batten provided detailed documentation to the CD Administrator and the Consolidated Committee on the loan portfolio.  He along with the CD Administrator and a new employee hired in June 2008 met with three City Council members at the Barbecue Junction restaurant at which time he went into considerable detail explaining these problems as well as others such as FHA Dollar Homes, etc.

Sad to say, despite a number of people knowing of these serious problems including the local print media, nothing has been publicly mentioned.  These events and others played a role in certain aspects of the City's departmental reorganization last summer, and the "RESIGNATION" of the CD Administrator, the "SUDDEN RETIREMENT" of the new Community Revitalization Director and the "TEMPORARY ASSIGNMENT" of the Prosecutor since January of this year!

I can only speak for myself and I have paid dearly for trying to fix a broken, wasteful and mismanaged HUD program.  I will not remain silent on this matter!

Nelson Self
CD Administrator (Resigned)

"The truth will set the captives free!"

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Truth Teller Members Profile Send Private Message Find Members Posts Add to Buddy List MUSA Resident Joined: Apr 06 2009 Location: Franklin Status: Offline Points: 53	Post Options Post Reply Quote Truth Teller Report Post Thanks(0) Quote Reply Topic: Middletown's Shrinking Rehab Revolving Loan Fund Posted: Apr 19 2009 at 3:10pm
	Twenty-seven years ago the City of Middletown first allocated $250,000 of HUD Community Development Block Grant (CDBG) funds to establish a Housing Rehabilitation Revolving Loan Fund (HRRLF). Its' purpose was to make available below market rate repayable loans for income-eligible, target area homeowners to remedy housing code violations and other basic deficiencies. To date over $4.0 million in CDBG funds have been budgeted for this purpose with an undetermined number of single-family homes being rehabilitated. However, with a present cash balance of $500,000+ and $1.0+ million in repayable mortgage loans, what's happened to the $2.5+ million (not including interest earned) that's unaccounted for? According to Skip Batten, a long-time employee of the Community Revitalization Department, approximately $300,000+ in non-performing loans were written off by him and a member of the Finance Department in the fall of 2006. Additionally, according to him, upwards of $500,000+ in previous non-performing loans were written off by the former Finance Director and the Planning Director in the early part of this decade. When this information became known in April of 2008 the former Community Development Administrator ("RESIGNED") and members of the now-defunct HUD Consolidated Planning Committee (Chris Amburgey, Paul Renwick, Bert Grimes, Robyn M. French, Walter Leap, Cheryl Burns and Rosa Lean Lindsey) began meeting on an almost weekly basis. They developed loan servicing procedures that had not been in place for a number of years in an effort to prevent newer loans in the shrinking portfolio from becoming non-performing as well. Since no Guidelines and Procedures for the Housing Rehabilitation Program were in place since Mr. Batten's hiring in the early part of this decade, the CD Administrator and Consolidated Committee members prepared a "final draft" that was presented to senior city staff and the City Council Housing Sub-Committee at the July 2008 meeting. Please note that the Planning Director disagreed with Mr. Batten's recollection and provided the CD Administrator a copy of guidelines and procedures that he used for this program activity in the 1990's before accepeting a position at that time in Lebanon. Mr. Batten provided detailed documentation to the CD Administrator and the Consolidated Committee on the loan portfolio. He along with the CD Administrator and a new employee hired in June 2008 met with three City Council members at the Barbecue Junction restaurant at which time he went into considerable detail explaining these problems as well as others such as FHA Dollar Homes, etc. Sad to say, despite a number of people knowing of these serious problems including the local print media, nothing has been publicly mentioned. These events and others played a role in certain aspects of the City's departmental reorganization last summer, and the "RESIGNATION" of the CD Administrator, the "SUDDEN RETIREMENT" of the new Community Revitalization Director and the "TEMPORARY ASSIGNMENT" of the Prosecutor since January of this year! I can only speak for myself and I have paid dearly for trying to fix a broken, wasteful and mismanaged HUD program. I will not remain silent on this matter! Nelson Self CD Administrator (Resigned) "The truth will set the captives free!"

Truth Teller Members Profile Send Private Message Find Members Posts Add to Buddy List MUSA Resident Joined: Apr 06 2009 Location: Franklin Status: Offline Points: 53	Post Options Post Reply Quote Truth Teller Report Post Thanks(0) Quote Reply Posted: Apr 19 2009 at 3:39pm
	Besides obtaining legal counsel and reporting these abuses to the HUD Office of the Inspector General, does anyone have other suggestions how to make these examples of government waste and abuse public? "The truth will set the captives free!"

Perplexed Members Profile Send Private Message Find Members Posts Add to Buddy List MUSA Citizen Joined: Apr 22 2009 Status: Offline Points: 315	Post Options Post Reply Quote Perplexed Report Post Thanks(0) Quote Reply Posted: Apr 23 2009 at 11:07am
	How much HUD money is really in the City's coffers to assist fixed income elderly, disabled and out of work home owners who got those code violation tickets? Don't they have a lengthy waiting list too? What should we believe?

Perplexed Members Profile Send Private Message Find Members Posts Add to Buddy List MUSA Citizen Joined: Apr 22 2009 Status: Offline Points: 315	Post Options Post Reply Quote Perplexed Report Post Thanks(0) Quote Reply Posted: Apr 28 2009 at 9:06pm
	Taking a number of factors into consideration, there should be $4.0 million plus in the HUD Housing Rehabilitation Revolving Loan Fund of the City of Middletown today. With a balance of $1.5 million plus in cash and repayable mortgages, where did the $2.5 million plus go to? We're told that $800,000 plus of that amount was written off as non-performing loans by City staff since 2000. I'm certain that the City has detailed records that account for this and the other $1.7 million plus in other funds??? Accountability and full disclosure go hand in hand.

Perplexed Members Profile Send Private Message Find Members Posts Add to Buddy List MUSA Citizen Joined: Apr 22 2009 Status: Offline Points: 315	Post Options Post Reply Quote Perplexed Report Post Thanks(0) Quote Reply Posted: Apr 28 2009 at 9:13pm
	To his credit, City Councilman Tony Marconi is the only one of our elected officials who has attempted to get answers to the Housing Rehabilitation Revolving Loan Fund questions that have been raised. Thank you for asking the tough questions and please continue in your quest.

Perplexed Members Profile Send Private Message Find Members Posts Add to Buddy List MUSA Citizen Joined: Apr 22 2009 Status: Offline Points: 315	Post Options Post Reply Quote Perplexed Report Post Thanks(0) Quote Reply Posted: Apr 30 2009 at 3:45pm
	$100,000+ HUD-Funded Mystery Housing Project Located in the 3200 Block of Ottawa, Middletown, Ohio About six years ago a substandard single-family home in the 3200 block of Ottawa was targeted for demolition by the city planners. The owner-occupants of this home were an elderly couple with limited income. According to current staff who was involved with this project, CDBG funds were used to demolish this home. Furthermore, other HUD funds were used to build a new three bedroom/two bath ranch home for this couple. The total cost of the project was about $100,000. Since the homeowners received HUD assistance and were lower-income, they were required to pay only 30% of their monthly income as a mortgage payment to the City. It was said that their spotty credit history and limited income prevented obtaining a bank mortgage. Also, to the present day there is not one home within a significant radius of the 3200 block of Ottawa that appraised for anything close to $100,0000. A couple of years after the retired couple moved into their new home courtesy of the City of Middletown, the property was put up for sale because of unpaid property taxes. Somehow, they paid off the arrearage. About one year later the husband of the retired couple passed away. The surviving wife fell behind on taxes and the property was again put up for sale. However, because the City did not answer the notice of the pending tax sale it was forced to pay off the past due taxes. At the same time, to protect this large gift of HUD funds, the mortgage and mortgage deed were re-written with the surviving widow and her neice being the new owners. I have no idea how all of this happened. While it's nice to give someone a $100,000 new home with a miniscule monthly payment, is this what HUD funds are to be used for? If so, there are thousands of lower-income families who would love to stop by the 4th floor of One Donham Plaza to apply for one of these "PRICE IS RIGHT" handouts. This information was also shared with the members of the now-defunct HUD Consolidated Planning Committee. They can fully attest to the information presented by current city staff.

Smokey Burgess Members Profile Send Private Message Find Members Posts Add to Buddy List MUSA Resident Joined: Jun 04 2009 Status: Offline Points: 172	Post Options Post Reply Quote Smokey Burgess Report Post Thanks(0) Quote Reply Posted: Jun 08 2009 at 9:40pm
	During my sick leave in late September and early October of 2008, the following property at 2021 Logan Avenue was sold to a Mxxx Axx Smxxh. I had no involvement what so ever in this transaction. Kyle Fuchs, Neighborhood Improvement Advisor told me upon my return to work that this house was sold to an "non-qualified purchaser" and that the City of Middletown was the lien holder since no bank or mortgage company would approve a mortgage for Ms. Smxxh. This was and presumably still is the only FHA Dollar Home that was sold with the City of Middletown holding the mortgage. Mr. Fuchs told me that Mrs. Ginger Smith, recently suddenly retired Community Revitalization Director approved the sale to this "non-bankable" buyer.

spiderjohn Members Profile Send Private Message Find Members Posts Add to Buddy List Prominent MUSA Citizen Joined: Jul 01 2007 Location: United States Status: Offline Points: 2749	Post Options Post Reply Quote spiderjohn Report Post Thanks(0) Quote Reply Posted: Jun 09 2009 at 6:51am
	Hmmmm... Outside of the last name and being stranded on Gilligan's Island, any relationship between the Smiths?

Smokey Burgess Members Profile Send Private Message Find Members Posts Add to Buddy List MUSA Resident Joined: Jun 04 2009 Status: Offline Points: 172	Post Options Post Reply Quote Smokey Burgess Report Post Thanks(0) Quote Reply Posted: Jun 09 2009 at 7:20am
	Spider John - I have no idea if there is a blood relationship between the purchaser of 2021 Logan and the recently suddenly retired Mrs. Ginger Smith, Community Revitalization Director. The latter Smith had removed from all administrative responsibilities beginning in the latter part of July 2008. I was excluded from staff meetings and discussions of any importance by her.