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HomeMy WebLinkAbout08.G- City Manager RESOLUTION (ID#2125) DOC ID: 2125 CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION 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 the Subordination of a Deed of Trust in Connection with a Refinancing of the Senior Mortgage Relating to Real Property Located at 3577 Wall Avenue, San Bernardino, California Financial Impact: Account Budgeted Amount: «Inert Amount» Account No. «Inert Account No» Account Description: «Inert Account Description Balance as of «Inert Date>> Balance after approval of this item: «Inert 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. Backaround• 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 2125 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 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 fixture, 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 future 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 29th Street each property owner obtained a down Updated: 11/15/2012 by Linda Sutherland 2125 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 fast 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 26th 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: Suaaortine Documents: (form of) Subordination Agreement (DOCX) reso 2115-3577 wall (PDF) Updated: 11/15/2012 by Linda Sutherland g. 524 © When recorded mail to: FORM OF SUBORDINATION AGREEMENT City of San Bernardino,acting in its capacity as the Successor Housing Agency to the Redevelopment Agency of the City of San Bernardino 201 N."E"Street,Suite 301 San Bernardino,CA 92401 Z, Borrower Name: (Name) m Loan number: 0000000 SPACE ABOVE THIS LINE FOR RECORDERS USE. u) M N C SUBORDINATION AGREEMENT N NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER y OR LATER SECURITY INSTRUMENT. 'o x This AGREEMENT, made this _day of 20_ by (Borrower Name, Owner of the N land hereinafter described and hereinafter referred to as"Owner,"and the City of San Bernardino,acting in its capacity as the Successor Housing Agency to the Redevelopment Agency of the City of San Bernardino, present owner and holder of the Deed of Trust and Note; c m E WITNESSETH m rn WHEREAS,Borrower(s)did execute a Deed of Trust,dated to the ¢ Redevelopment Agency of the City of San Bernardino,as trustee,covering: o R [Legal Description of Parcel here] 0 to secure a Note in the sum of$XXXXX,dated in favor of the Redevelopment Agency of the City of San Bernardino first hereinafter described and hereinafter referred to as'Beneficiary",which Deed of Trust was recorded , as Instrument No. , Official Records of said p county; E 0 WHEREAS, all rights and obligations of the Beneficiary have since been transferred to the City of San Bernardino as the Successor Housing Agency to the Redevelopment Agency of the City of San Bernardino ("Successor Beneficiary") pursuant to Mayor and Common Council Resolution No. 2012-xx E dated January 23,2012; WHEREAS,Owner has executed,or is about to execute,a Deed of Trust and Note in the sum of Q $XXXXX,dated in favor of Bank Name,N.A., hereinafter referred to as"Lender," payable with interest and upon the terms and conditions described therein, which Deed of Trust is to be recorded concurrently herewith;and WHEREAS, it is a condition precedent to obtaining said loan that said Deed of Trust last above mentioned shall unconditionally be and remain at all times a lien or charge upon the land herein before described,prior and superior to the lien or charge of the Deed of Trust first above mentioned;and © WHEREAS,lender is willing to make said loan provided the Deed of Trust securing the same is a lien or charge upon the above described property prior and superior to the lien or charge of the Deed of Trust first above mentioned and provided that Successor Beneficiary will specifically and unconditionally subordinate the lien or charge of the Deed of Trust first above mentioned to the lien or charge of the Deed of Trust in favor of Lender;and WHEREAS,it is to the mutual benefit of the parties hereto that Lender make such loan to Owner; and Successor Beneficiary is willing that the Deed of Trust securing the same shall, when recorded, constitute a lien or charge upon said land which is unconditionally prior and superior to the lien or charge i of the Deed of Trust first above mentioned. Q m NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, and in order to induce Lender to make the loan above referred to, it is hereby declared, understood and M agreed as follows: N G 1. That said Deed of Trust securing said Note in favor of Lender,and any renewals or extensions thereof, shall unconditionally be and remain at all times a lien or charge on the property m therein described, prior and superior to the lien or charge or the Deed of Trust above c mentioned. 2 rn 2. That Lender would not make its loan above described without this Subordination Agreement. S M 7 3. That this agreement shall be the whole and only agreement with regard to the subordination of = the lien or charge of the Deed of Trust first above mentioned to the lien or charge of the Deed LO of Trust in favor of the lender above referred to and shall supersede and cancel, but only a insofar as would affect the priority between the Deeds of Trust hereinbefore specifically N described, any prior agreement as to such subordination including, but not limited to, those provisions,if any,contained in the Deed of Trust first above mentioned,which provide for the E subordination of the lien or charge thereof to another Deed or Deeds of Trust or to another E mortgage or mortgages. v m Q Successor Beneficiary declares,agrees and acknowledges that: o (a) He consents to and approves (i) all provisions of the Note and Deed of Trust in favor of c Lender above referred to, and (ii) all agreements, including but not limited to any loan or escrow agreements, between Owner and Lender for the disbursement of the proceeds of a Lender's loan; (b) Lender in making disbursements pursuant to any such agreement is under no obligation or O duty to,nor has Lender represented that it will,see to the application of such proceeds by the E o person or persons to whom Lender disburses such proceeds and any application or use of such proceeds for purposes other than those provided for in such agreement or agreements shall not defeat the subordination herein made in whole or in part; E z (c) He intentionally and unconditionally waives,relinquishes and subordinates the lien or charge of the Deed of Trust first above mentioned in favor of the lien or charge upon said land of the Q Deed of Trust in favor of Lender above referred to and understands that in reliance upon,and in consideration of,this waiver,relinquishment and subordination specific loans and advances are being and will be make and, as part and parcel thereof, specific monetary and other obligations are being and will be entered into which would not be made or entered into but for said reliance upon this waiver,relinquishment and subordination;and Packet Pg. 526 Q (d) An endorsement has been placed upon the Note secured by the Deed of Trust first above mentioned that said Deed of Trust has by this instrument been subordinated to the lien or charge of the Deed of Trust in favor or Lender above referred to. NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR REAL PROPERTY SECURITY TO OBTAIN A LOAN A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN IMPROVEMENT OF THE LAND. City of San Bernardino,acting in its capacity as the Successor Housing Agency to the Redevelopment Agency of the City of San Bernardino ¢ m r ti Authorized Representative,Title Owner M N C Successor Beneficiary Owner m (ALL SIGNATURES MUST BE ACKNOWLEDGED) c M rn IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS SUBORDINATION E AGREEMENT,THE PARTIES CONSULT WITH THEIR ATTORNEYS WITH RESPECT THERETO. 0 x (CLTA SUBORDINATION FORM"A") LO C N N, C v E v P rn c 0 C a `0 a V) 0 0 E 0 w c m E L U A Packet Pg. 527 &G.b 1 RESOLUTION NO. 2 3 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE 4 CITY OF SAN BERNARDINO SERVING IN ITS CAPACITY AS THE SUCCESSOR HOUSING AGENCY TO THE REDEVELOPMENT 5 AGENCY OF THE CITY OF SAN BERNARDINO APPROVING THE SUBORDINATION OF A DEED OF TRUST IN CONNECTION WITH A 6 REFINANCING OF THE SENIOR MORTGAGE RELATING TO REAL PROPERTY LOCATED AT 3577 WALL AVENUE, SAN BERNARDINO, 7 CALIFORNIA a 8 m 3 r 9 M WHEREAS, on January 9, 2012, the Mayor and Common Council of the City of 10 San Bernardino ("Council") adopted Resolution No. 2012-12 confirming that the City of 4 11 San Bernardino would serve as the "Successor Agency" to the Redevelopment Agency of the City N 12 of San Bernardino ("Agency") effective February 1, 2012, pursuant to AB1X 26 (The 13 Redevelopment Agency Dissolution Act); and ( 14 WHEREAS, on January 23, 2012, the Council adopted Resolution No. 2012-19 confirming = v that the City would serve as the"Successor Housing Agency"to the former Agency and perform the N 15 housing functions previously performed by the Agency; and 16 WHEREAS, pursuant to Health & Safety Code Section 34181(c), added by ABIX 26, the 3 17 Oversight Board for the Successor Agency ("Oversight Board") is required to direct the transfer of 18 the former Agency's housing assets and functions to the Successor Housing Agency;and 19 WHEREAS, pursuant to Health & Safety Code Section 34176(e)(1), added by A131484, N d 20 deeds of trust and restrictions on the use of real property such as affordability covenants benefiting the Agency are considered"housing assets'; and 21 L 22 WHEREAS, the Agency provided a down payment assistance loan("Loan")to the purchaser a ("Homeowner") of real property located at 3577 Wall Avenue, San Bernardino, California 23 ("Property") in the amount of$44,980;and 24 WHEREAS, the Loan is secured by a Deed of Trust, executed by the Homeowner on 25 January 9, 2009 and recorded against the Property in the Official Records of the County of San 26 Bernardino on February 2,2009 as Instrument Number 20090043893 ("Deed of Trust"); and 27 28 l ` I WHEREAS, the terms of the Deed of Trust allow the Homeowner to refinance the senior �'✓ purchase money mortgage recorded against the Property ("Senior Loan") in order to reduce the 2 interest rate and mortgage payments under such Senior Loan; and 3 WHEREAS, the Homebuyer has requested that the Successor Housing Agency agree to 4 subordinate the lien of the Deed of Trust to the lien of a deed of trust securing the Homeowner's 5 new first mortgage ("Refinancing Loan") in order to enable the Homeowner to refinance the Senior 6 Loan and 7 WHEREAS, the Oversight Board adopted a resolution (Resolution SBOB/2012-09) to a 8 (1)confirm that the Deed of Trust is a housing asset, (2) direct the Successor Agency to transfer the Deed of Trust to the Successor Housing Agency and (3) approve the subordination of the Deed of 9 Trust to the deed of trust securing the Refinancing Loan; and C? 10 WHEREAS, the State of California Department of Finance, the State of California o 11 Controller's Office, the County Auditor-Controller of the County of San Bernardino and the Office r 12 of the Chief Executive Officer of the County of San Bernardino have been properly notified prior to F 13 the adoption of Oversight Board Resolution SBOB/2012-09. N NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL 14 SERVING AS THE SUCCESSOR HOUSING AGENCY,AS FOLLOWS: N 15 Section 1. Pursuant to Health & Safety Code Sections 34176(e) and 34181(c), the 0 16 Oversight Board found and determined that the Deed of Trust is a "housing asset" as defined in 3 17 Section 34176(e) and directed Successor Agency staff to transfer the Deed of Trust to the Successor M 18 Housing Agency. Cq 19 Section 2. The Mayor and Common Council hereby approves the subordination of the y 20 Deed of Trust to the deed of trust securing the Refinancing Loan. c Section 3. The City Manager, or designee, is hereby directed to effectuate the execution E 21 of the subordination agreement in substantially the form submitted herewith, as required by the bank 22 providing the Refinancing Loan and to cause such instrument to be recorded against the Property in a 23 the Official Records of the County of San Bernardino. 24 Section 4. This Resolution shall take effect from and after its date of adoption by this 25 Council. 26 27 28 2 8.G.b 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 THE 3 SUBORDINATION OF A DEED OF TRUST IN CONNECTION WITH A REFINANCING OF THE SENIOR MORTGAGE RELATING TO REAL 4 PROPERTY LOCATED AT 3577 WALL AVENUE, SAN BERNARDINO, 5 CALIFORNIA 6 1 HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and d 7 Common Council of the City of San Bernardino at a meeting thereof, held on the < 8 day of , 2012, by the following vote,to wit: r n 9 M 10 Council Members: Ayes Nays Abstain Absent MARQUEZ JENKINS 12 VALDIVIA 13 SHORETT o 14 KELLEY LO 15 JOHNSON N 16 MCCAMMACK 3 17 r N M 18 Georgeann Hanna, City Clerk N 19 v° 20 The foregoing Resolution is hereby approved this day of , 2012. d m 21 22 Patrick J. Morris,Mayor a City of San Bernardino 23 24 Approved as to Form: 25 JAMES F. PENMAN, City Attorney 26 27 By: C(LL_l 28 (f—�) 3 Packet Pg. 530