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HomeMy WebLinkAbout08.C- City Manager RESOLUTION(ID#2131) DOC ID: 2131 CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION p Conveyance of Property From: Andrea Travis-Miller M/CC Meeting Date: 11/19/2012 Prepared by: Teri Baker, (909) 663-1044 Dept: City Manager Ward(s): All Subject: A Resolution of the Mayor and Common Council of the City of San Bernardino Serving in Its Capacity as the Successor Housing Agency to the Redevelopment Agency of the City of San Bernardino Approving a Short Sale and Authorizing the Reconveyance of the Deed of Trust and Termination of Covenants Relating to Real Property Located at 808 West 26Th Street, San Bernardino, California Financial Impact: Account Budgeted Amount: «Inert Amount>> Account No. «Inert Account No.>> Account Description: «Insert Account Description Balance as of: «Insert Date>> Balance after approval of this item: «Insert Amount» Please note this balance does not indicate available funding. It does not include non-encumbered reoccurring expenses or expenses incurred,but not yet processed. Motion: Adopt the Resolution. Synopsis of Previous Council Action: None. Background: On October 17, 1994, the Community Development Commission of the City of San Bernardino ("Commission") approved the Mortgage Assistance Program, subsequently renamed Homebuyer's Assistance Program, which made available a limited number of deferred payment (principal and interest) second mortgages, not-to-exceed ten percent (10%) of the maximum permitted purchase price of$250,000. This Program was designed to provide income qualified families with down payment/closing cost monies necessary to secure financing towards the purchase of single family detached homes in the City and provided an additional avenue for the former Agency to insure the availability of affordable housing to income qualified home buyers in the community. On January 9, 2012, Council adopted Resolution No. 2012-12 confirming that the City of San Bernardino would serve as the "Successor Agency" to the former Agency, in accordance with AB1X 26. On January 23, 2012, the Council adopted Resolution No. 2012-19 further confirming that the City would serve as the "Successor Housing Agency" to the former Agency and perform the housing functions previously performed by the Agency. Pursuant to the requirements of state legislation providing for the dissolution and wind down of the former Agency, October 22, 2012, the Oversight Board to the Successor Agency to the former Agency ("Oversight Board") met and acknowledged the various loans, covenants and other related documents recorded against the various properties that are the subject of the Updated: 11/15/2012 by Linda Sutherland 2131 Resolutions submitted herewith in favor of the former Agency are, in fact, housing assets and directed the Successor Agency to transfer such housing assets to the Successor Housing Agency. The Oversight Board further recommended approval of the Resolutions submitted herewith by the Successor Housing Agency. Notice of the Oversight Board's action was provided to the California Department of Finance County Auditor-Controller Office of the County Executive eP tY tY Officer, and the State Auditor Controller, who had five (5) business days to request review of these actions. None of these entities requested such review. The proposed actions contained in this report refer to twelve (12) separate property transaction requests. Three of the properties (218 E. Temple Street, 1460 Kendall Drive #48, and 3456 N. Sierra Way) originally received federal funding from the Agency. The remaining nine properties were subsidized with low- and moderate-income housing funds. In the future, it is the intent of Successor Agency staff to draft and submit a resolution to the Oversight Board for consideration that would enable the Oversight Board to (1) determine that all remaining deeds of trust, affordability covenants, and other instruments relating to housing and benefiting the former Agency but which were not included on the Housing Asset Transfer Form approved by the Department of Finance are "housing assets" as defined in Health & Safety Code Section 34176(e) and (2) direct the Successor Agency to transfer such remaining housing assets to the Housing Successor Agency in accordance with Health & Safety Code Sections 34176 and 34181(c). It is anticipated such a resolution would provide any title company with evidence of Oversight Board approval of the conveyance while at the same time not burdening the Oversight Board with numerous fixture unnecessary actions. CURRENT ISSUE: Reconveyance of Restrictive Covenants In the case of 4905 Lakewood Drive, 218 East Temple Street, and 3456 North Sierra Way, the homeowners purchased their homes over 10 years ago. The homeowners obtained first mortgages from private lenders and down payment assistance through the Agency's Homeowner Assistance Program. The loan agreements provided that after 10 years, the loans would be forgiven and the affordability covenants removed. That 10-year period has passed. The recorded covenants also include maintenance conditions that would,by their terms,remain for an additional twenty years; thus, if these homes are sold, the new buyer must observe and adhere to the remaining maintenance covenants. In the past, this result has been achieved by using a partial reconveyance of the affordability portion of the covenant while the continuing effect of the maintenance covenant was evidenced by a Partial Satisfaction of Home Program Affordable Housing Regulatory Agreement and Covenants, signed by the homeowner. Now that the former Agency no longer governs affordable housing it is advisable to release property owners of this extended restriction; therefore rather than issue a partial reconveyance, staff recommends the Successor Housing Agency to cause to be recorded a full reconveyance of the regulatory agreement and covenants in addition to the reconeveyance of the respective Deeds of Trust. Resolutions have been provided for consideration as Attachments "R-A", "R-B" and "R-C" for each of these reconveyance requests. Subordination Requests In the case of 3577 Wall Avenue, 3248 Greystone Road, 2813 Crescent Avenue, 3395 North Mayfield, 5904 Robin Road and 597 East 29« Street each property owner obtained a down Updated: 11/15/2012 by Linda Sutherland 2131 payment assistance loan from the Agency and each homeowner wishes to refinance their existing first mortgage to obtain a lower interest rate and monthly payment. To proceed with the refinancing, the new lenders and title companies require the Agency's deeds of trust to be expressly subordinated to the new first trust deed. Each of the property owners of the properties listed above have submitted a subordination request to Successor Housing Agency staff and each application has been underwritten and approved. Presently, staff requests that the City Manager, or her designee, be authorized to sign and cause to be recorded the respective subordination agreements which will allow the property owners to refinance their first mortgages. Separate resolutions corresponding to each property are attached to this report as Attachments "SR-A", "SR-B", "SR-C", "SR-D", "SR-E", and"SR-F",respectively. Short Sale Requests In the case of 808 West 26`h Street, 1460 Kendall #48, and 5585 Aster Street, the property owners desire to conduct Short Sales of their respective properties. In each case the property owners purchased their homes utilizing Agency down payment assistance. Now that they must sell their homes, there is not sufficient equity to pay off the Agency second mortgage in full. These property owners are requesting that the Successor Housing Agency consent to the short sales, forgive the outstanding Agency loans, and reconvey the associated Deeds of Trust. Staff recommends that the City Manager, or her designee, be authorized to execute appropriate Requests for Reconveyance of the Deeds of Trust and other appropriate documentation. City Attorney Review: Supporting Documents: (form of) Reconveyance of Deed of Trust (DOCX) (form of)Termination of Covenants (2) (DOCX) reso 2115-808 w 26th st (PDF) Updated: 11/15/2012 by Linda Sutherland 8.C.a © FORM OF RECONVEYANCE OF DEED OF TRUST Recording Requested By: CITY OF SAN BERNARDINO, acting in its capacity as the Successor Housing Agency to the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO 201 NORTH "E" STREET, SUITE 301 m SAN BERNARDINO, CA 92901 d N When Recorded, Mail to: Economic Development Agency cc Of the City of San Bernardino N San Bernardino, CA 92901 Space Above For Recorder's Use Only o 00 Recording Fee Exempt Pursuant to yr Government Code Section 6103 r 0 .0 RECONVEYANCE OF DEED OF TRUST N C A The undersigned, as the owner(s) and holder(s) of a Deed of Trust dated on or � about made by Horrover(s) (Trustor) , to Designated Title Company 0 (Trustee) , for the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO •y (Beneficiary) , which Deed of Trust was recorded XX/XX/XXXX, Instrument number 3 0 Official Records of San Bernardino County. The CITY OF 2 SAN BERNARDINO, ACTING IN ITS CAPACITY AS THE SUCCESSOR HOUSING AGENCY TO THE ® REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("Successor Housing Agency") , M pursuant to Mayor and Common Council Resolution No. 2012-xx dated January 23, 2012, hereby substitutes the Successor Housing Agency, as Trustee in lieu of the w Trustee herein. F w As successor Trustee the undersigned does hereby RECONVEY WITHOUT WARRANTY, TO 0 THE PERSON OR PERSONS LEGALLY ENTITLED THERETO, all estate now held by it under y v said Deed of Trust. p 0 0 This day of m U r CITY OF SAN BERNARDINO, ACTING IN ITS CAPACITY AS THE SUCCESSOR HOUSING AGENCY TO THE r- 0 REDEVELOPMENT AGENCY OF THE m CITY OF SAN BERNARDINO 0 O E November 15, 2012 `o Authorized Representative Title c d E r U R Q 1 Packet Pg. 488 © On before me, ACKNOWLEDGMENT , a notary public, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their signature(s) on the instrument the person(s) , or the entity upon behalf of which the person(s) acted, executed the instrument F I certify under PENALTY OF PERJURY under the laws of the State of California that m the foregoing paragraph is true and correct. f r WITNESS my hand and official seal. � N Signature: Signature of Notary Public 0 i N C O U m N C m t- r c .y 0 0 X ® C) N, N 7 h O d d O 0 O d r C >1 d C O U d 0 O E O w c m E r U R Q 2 Packet Pg.489 FORM OF TERMINATION OF AFFORDABLE HOUSING REGULATORY AGREEMENT RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of San Bernardino, acting in its capacity as the Successor Housing Agency to the Redevelopment Agency of the City of San Bernardino 201 North"E" Street, Suite 301 L San Bernardino, California 92401 N Space Above For Recorder's Use Only 3: 0 Recording Fee Exempt Pursuant to 0 Government Code Section 6103 c 0 TERMINATION OF HOME PROGRAM AFFORDABLE HOUSING REGULATORY AGREEMENT °m AND COVENANTS( ) This TERMINATION OF HOME PROGRAM AFFORDABLE HOUSING REGULATORY a AGREEMENT AND COVENANTS ( ) is made pursuant to the terms of that certain HOME S PROGRAM AFFORDABLE HOUSING REGULATORY AGREEMENT AND COVENANTS 'o ( ) (the "Covenant") executed by (the "Qualified Homebuyer") and the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency"), , dated as of and recorded on , as Instrument Number in the Official Records of the County of San Bernardino. All housing assets and functions of the Agency have been transferred to the City of San Bernardino as the successor housing agency to the former Agency(the"City a as Successor Housing Agency") pursuant to Mayor and Common Council Resolution No. 2012-xx dated January 23,2012. c m The Covenant affects the real property (the "Property") located at coi San Bernardino, California, and the Property is more particularly described in the legal description attached `o hereto as Exhibit"A". o io The City as Successor Housing Agency hereby certifies that the Covenant has been satisfied and c terminated, and the Covenant is no longer in force and effect and the Oversight Board of the Successor Agency to the Redevelopment Agency of the City of San Bernardino has consented to such termination pursuant to Resolution No. effective o E CITY OF SAN BERNARDINO,acting in its capacity as the SUCCESSOR HOUSING AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO E U A Q Dated: By: Authorized Representative Title err/[ (Notary Acknowledgment Attached) 1 Packet Pg.490 © EXHIBIT "A" LEGAL DESCRIPTION Legal Description here m d L r N N APN: 3 w 0 0 N C O U A 41 C A L F C N 3 O 2 N N C A C d O U w O C O A C E L d I H 0 O E L 0 i w C d E r U Q Packet Pg. 491 8.C.c 1 RESOLUTION NO. 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE 3 CITY OF SAN BERNARDINO SERVING IN ITS CAPACITY AS THE SUCCESSOR HOUSING AGENCY TO THE REDEVELOPMENT 4 AGENCY OF THE CITY OF SAN BERNARDINO APPROVING A SHORT 5 SALE AND AUTHORIZING THE RECONVEYANCE OF THE DEED OF TRUST AND TERMINATION OF COVENANTS RELATING TO REAL 6 PROPERTY LOCATED AT 808 WEST 26TH STREET, SAN BERNARDINO, w CALIFORNIA ` 7 8 WHEREAS, on January 9, 2012, the Mayor and Common Council of the City of co 9 San Bernardino ("Council") adopted Resolution No. 2012-12 confirming that the City of o 10 San Bernardino would serve as the "Successor Agency" to the Redevelopment Agency of the City o 11 of San Bernardino ("Agency") effective February 1, 2012, pursuant to AB1X 26 (The N 12 Redevelopment Agency Dissolution Act); and WHEREAS, on January 23, 2012, the Council adopted Resolution No. 2012-19 confirming 13 that the City would serve as the"Successor Housing Agency"to the former Agency and perform the o 14 = housing functions previously performed by the Agency; and 15 WHEREAS, pursuant to Health & Safety Code Section 34181(c), added by ABIX 26, the N 16 Oversight Board for the Successor Agency ("Oversight Board") is required to direct the transfer of 17 the former Agency's housing assets and functions to the Successor Housing Agency; and N 3 18 WHEREAS, pursuant to Health & Safety Code Section 34176(e)(1), added by AB1484, o deeds of trust and restrictions on the use of real property such as affordability covenants benefiting 19 the Agency are considered"housing assets"; and o 20 WHEREAS, the Agency provided a down payment assistance loan("Loan")to the purchaser ` 21 ("Homeowner") of real property located at 808 West 26' Street San Bernardino, California d E 22 ("Property")in the amount of$15,000; and U 23 WHEREAS, the Loan was secured by a Deed of Trust, executed by the Homeowner on a 24 August 18, 2003, and recorded against the Property in the Official Records of the County of 25 San Bernardino on September 24, 2003 as Instrument Number 2003071745 ("Deed of Trust"); and WHEREAS, in connection with the Loan, the Homeowner executed certain affordability 26 covenants against the Property in the Official Records of the County of San Bernardino on 27 September 24, 2003 as Instrument Number 20030717546("Covenants");and 28 1 Packet Pg. 492 1 WHEREAS, now the Homeowner must sell the Property and there is not sufficient equity to pay off the Loan; and 2 WHEREAS, the Homebuyer has requested that the Successor Housing Agency agree to 3 forgive repayment of the Loan, reconvey the Deed of Trust, and terminate the Covenants, all in 4 order to enable the Homeowner to sell the Property, and 5 WHEREAS,the Oversight Board adopted a resolution(Resolution SBOB/2012-15)pursuant 6 to which it confirmed that the Covenant and Deed of Trust are housing assets and authorized 7 Successor Agency staff to transfer all rights and interests in the Covenant and Deed of Trust to the s City in its capacity as the Successor Housing Agency; and N 8 WHEREAS, the State of California Department of Finance, the State of California co 9 Controller's Office, the County Auditor-Controller of the County of San Bernardino and the Office C' 10 of the Chief Executive Officer of the County of San Bernardino were each properly notified prior to `o 11 the adoption of Oversight Board Resolution SBOB/2012-15. N 12 NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL 13 SERVING AS THE SUCCESSOR HOUSING AGENCY,AS FOLLOWS: N Section 1. Pursuant to Health & Safety Code Sections 34176(e) and 34181(c), the 14 Oversight Board found and determined that the Deed of Trust and Covenants are"housing assets"as M 15 defined in Section 34176(e) and directed Successor Agency staff to transfer the Deed of Trust and 16 Covenants to the City in its capacity as the Successor Housing Agency. r 17 Section 2. The Mayor and Common Council hereby approves the forgiveness of the 3 18 Loan in connection with the proposed sale of the Property and further approves the termination and Q 19 full reconveyance of the following instruments, concurrently with the sale of the Property: (1) the Deed of Trust as described as Instrument Number 2003071745 in the Official Records of the County c 20 of San Bernardino; and (2) the Covenant as described as Instrument Number 20030717546 in the 21 d Official Records of the County of San Bernardino. E 22 Section 3. The City Manager, or designee, is hereby directed to effectuate the execution 23 of a request for reconveyance of the Deed of Trust and termination of the Covenants and to cause a 24 such instruments to be recorded against the Property in the Official Records of the County of 25 San Bernardino concurrently with the proposed sale of the Property. 26 Section 4. This Resolution shall take effect from and after its date of adoption by this Council. C 27 28 2 Packet Pg. 493 8.C.c RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE 1 CITY OF SAN BERNARDINO SERVING IN ITS CAPACITY AS THE 2 SUCCESSOR HOUSING AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO APPROVING A SHORT 3 SALE AND AUTHORIZING THE RECONVEYANCE OF THE DEED OF TRUST AND TERMINATION OF COVENANTS RELATING TO REAL 4 PROPERTY LOCATED AT 808 WEST 26TH STREET, SAN 5 BERNARDINO,CALIFORNIA 6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 2 7 Common Council of the City of San Bernardino at a meeting thereof, held on the 8 N day of 2012, by the following vote,to wit: 9 0 10 Council Members: Ayes Nays Abstain Absent 0 11 MARQUEZ U 12 JENKINS 13 VALDIVIA 14 SHORETT x° 15 KELLEY — M N JOHNSON 16 N MCCAMMACK 17 N 3 18 C0 0 m 19 Georgeann Hanna, City Clerk N 20 The foregoing Resolution is hereby approved this day of 2012. 21 E 22 Patrick J. Morris, Mayor 23 City of San Bernardino 24 Approved as to Form: 25 JAMES F. PENMAN, 26 City Attorney 27 By: 28 3 Packet,Pg.494