PORT ANGELES — City Councilman Max Mania and outgoing Port Angeles City Manager Kent Myers engaged in an email-fueled dispute last week over the listing of Myers’ house as a “short sale.”

Myers said Mania told him he had heard from two people who said that because the sale of Myers’ 3215 S. Peabody St. home was a short sale, Myers’ bank would pay the difference between what he owes and the eventual purchase price of his house rather than stick him with the debt, suggesting Myers was getting special consideration.

Mania also told Myers the short sale “apparently” meant Myers was behind in his mortgage payments.

Myers said he was “absolutely shocked” by Mania’s email.

Myers said he is not behind in his mortgage and that the final terms of the short sale involving his bank, First Federal of Port Angeles, will be determined at the time his house is sold.

Information wrong

Mania “got some information from some people, and it turned out to be wrong,” Mania said Friday.

“That’s the end of it to me.”

Mania made the inquiry because “I think it has to do with the image of our city,” he said, refusing to elaborate.

He would not comment on what the inquiry had to do with his City Council duties.

“It’s a non-issue to me,” Mania said of his exchange with Myers.

Myers emailed the email exchange with Mania to the remaining six City Council members, including Mayor Cherie Kidd.

“It’s not anything I’m aware of, I have authority over or need to be involved in,” Kidd said Friday as she prepared a basket of going-away gifts for Myers.

Myers’ last day as city manager is Tuesday, after which he will leave the North Olympic Peninsula for a job as city manager of Fredericksburg, Texas.

The four-bedroom Port Angeles home purchased by Myers and his wife, Dianne, for $330,000 in 2008 is assessed at $227,613 now, according to the Clallam County Assessor’s Office.

The Olympic Multiple Listing Service has listed his house for sale for $250,000 as a short sale.

In a short sale, the seller asks the bank to allow the house to be sold for less than what is owed on it, then agrees with the bank to pay the remaining debt or have the bank write off the debt, said Realtor Dick Pilling, president of the Port Angeles Association of Realtors.

“The seller may pay off the deficiency at the close of escrow or may have reached an arrangement with the lien holders to have some or all of the deficiency forgiven,” Pilling said.

“Anyone who has bought a house in the last couple of years is going to have difficulty selling it” because of the downturn in the economy, he added.

The terms of the Myerses’ mortgage agreement with the bank are not public information, Pilling said, and Myers would not comment on those terms.

Of the 621 property sales listed by the Multiple Listing Service that took place in 2010 and 2011 in the Port Angeles area, 27 were short-sale transactions, Pilling said.

Myers said that when and if he sells the house — he may eventually rent it, Myers said — then the bank and he will decide if he will pay the difference between what’s owed and what it sells for or if the bank will eat the difference.

‘Future issues’

“Those are all future issues,” he said.

“That there is some sort of special deal that has been cut is total speculation on the part of one council member,” Myers said.

“I had hoped to leave the city on a really happy note and get some of this behind me,” Myers said.

“I’m really disappointed this issue has been raised by a council member.

“I was shocked. Absolutely shocked.”

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Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 5060, or at paul.gottlieb@peninsuladailynews.com.