The Crested Butte News Serving the Gunnison Valley since 1999
Protecting the deed restriction from foreclosure
In an effort to protect a long-term affordable deed restriction on a dwelling near Paradise Park, the Crested Butte Town Council has authorized the staff to purchase the unit before it goes into foreclosure.
Unit B of the Redwell Townhouses at 818 Teocalli Avenue is slated to go to a Public Trustee foreclosure sale at auction on February 12. The original owner had died and the person who inherited the unit has been delinquent on paying the mortgage.
The property is under contract for purchase by a town-approved buyer but apparently there are financing issues and the closing date is set at the end of February.
Town attorney John Belkin said he has had conversations with the U.S. Department of Agriculture, which controls the mortgage. The USDA attorney has said the town should be prepared to exercise its option to purchase the property if it wants to protect the deed restriction on the property. The staff is on board with the strategy and the plan would be to then attempt to promptly resell the unit to a qualified buyer.
“The crux of the matter is that the deed restriction could go away if the unit goes into foreclosure and that’s not something we want to happen,” said Councilperson Shaun Matusewicz.
The town’s Affordable Housing Fund has $210,000 in it and the council authorized spending up to $160,000 to purchase the property. They understood that there was a chance to lose a small amount of money in the deal after dealing with fees, but anticipated that wouldn’t happen.
“If there was a chance of losing a significant amount of money, I think we would have to have a much more thorough discussion but that doesn’t seem to be the case here,” said Mayor Aaron Huckstep.
The council unanimously approved an emergency ordinance to allocate the funds in case they were needed.
