HomeMy WebLinkAbout08.I- City Manager RESOLUTION(ID#2130) DOC ID: 2130
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 597 East 29Th Street, San Bernardino,
California
Financial Impact:
Account Budgeted Amount: «Inert Amount»
Account No. «Insert Account No>>
Account Description: «Insert Account Description
Balance as o£ «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.
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
[fir other related documents recorded against the various properties that are the subject of the
Updated: 11/15/2012 by Linda Sutherland I Packet Pg. 540
2130
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 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 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
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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 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 2115-597 e 29th st (PDF)
Updated: 11/15/2012 by Linda Sutherland
t 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
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Borrower Name: (Name)
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Loan number: 0000000 w
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SPACE ABOVE THIS LINE FOR RECORDERS USE. v>
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SUBORDINATION AGREEMENT
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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 S
OR LATER SECURITY INSTRUMENT. 'o
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This AGREEMENT, made this _day of 20_, by(Borrower Name, Owner of the
land hereinafter described and hereinafter referred to as"Owner,"and the City of San Bernardino,acting in N
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;
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WITNESSETH d
WHEREAS,Borrower(s)did execute a Deed of Trust,dated to the a
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Redevelopment Agency of the City of San Bernardino,as trustee,covering: o
[Legal Description of Parcel here]
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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 rn
Deed of Trust was recorded , as Instrument No. Official Records of said o
county; E
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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;
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WHEREAS,Owner has executed,or is about to execute,a Deed of Trust and Note in the sum of 4
$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
of the Deed of Trust first above mentioned. L
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NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and w
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
agreed as follows: y
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1. That said Deed of Trust securing said Note in favor of Lender,and any renewals or extensions 0
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. m F-
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2. That Lender would not make its loan above described without this Subordination Agreement. S
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3. That this agreement shall be the whole and only agreement with regard to the subordination of z
the lien or charge of the Deed of Trust fast above mentioned to the lien or charge of the Deed o
of Trust in favor of the lender above referred to and shall supersede and cancel, but only M
insofar as would affect the priority between the Deeds of Trust hereinbefore specifically
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
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mortgage of mortgages. �
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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
Lender above referred to, and (ii) all agreements, including but not limited to any loan or v
escrow agreements, between Owner and Lender for the disbursement of the proceeds of a
Lender's loan; 3
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(b) Lender in making disbursements pursuant to any such agreement is under no obligation or 0
duty to,nor has Lender represented that it will, see to the application of such proceeds by the E
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; 44)
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(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 a
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. 544
(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 N
Redevelopment Agency of the City of San Bernardino
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Authorized Representative,Title Owner Ln
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Successor Beneficiary Owner —
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(ALL SIGNATURES MUST BE ACKNOWLEDGED)
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IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS SUBORDINATION S
AGREEMENT,THE PARTIES CONSULT WITH THEIR ATTORNEYS WITH RESPECT THERETO. M
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1 RESOLUTION NO.
2
3 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO SERVING IN ITS CAPACITY AS THE
4 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 597 EAST 29TH STREET, SAN BERNARDINO,
7 CALIFORNIA
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9 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
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11 San Bernardino would serve as the "Successor Agency" to the Redevelopment Agency of the City
12 of San Bernardino ("Agency") effective February 1, 2012, pursuant to ABIX 26 (The
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13 Redevelopment Agency Dissolution Act); and
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WHEREAS, on January 23, 2012, the Council adopted Resolution No. 2012-19 confirming =
14 °
that the City would serve as the"Successor Housing Agency"to the former Agency and perform the "
15
housing functions previously performed by the Agency;and
16 WHEREAS, pursuant to Health & Safety Code Section 34181(c), added by AB1X 26, the o
17 Oversight Board for the Successor Agency ("Oversight Board") is required to direct the transfer of
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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, c
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20 deeds of trust and restrictions on the use of real property such as affordability covenants benefiting
21 the Agency are considered"housing assets'; and E
WHEREAS,the Agency provided a down payment assistance loan ("Loan")to the purchaser U
22 "Homeowner" of real property u
("Homeowner") pro ert located at 597 East 29 Street San Bernardino California a
23 ("Property")in the amount of$75,000; and
24 WHEREAS, the Loan is secured by a Deed of Trust, executed by the Homeowner on April
25 26,2008, and recorded against the Property in the Official Records of the County of San Bernardino
26 on May 15, 2008 as Instrument Number 20080220355 ("Deed of Trust"); and
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E 1 WHEREAS, the terms of the Deed of Trust allow the Homeowner to refinance the senior
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2 purchase money mortgage recorded against the Property ("Senior Loan") in order to reduce the
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/2012-14) to r
8 (1) confirm that the Deed of Trust is a housing asset, (2) direct the Successor Agency to transfer the w
Deed of Trust to the Successor Housing Agency and (3) approve the subordination of the Deed of s
9 Trust to the deed of trust securing the Refinancing Loan; and N
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WHEREAS, the State of California Department of Finance, the State of California —
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11 Controller's Office, the County Auditor-Controller of the County of San Bernardino and the Office
12 of the Chief Executive Officer of the County of San Bernardino have been properly notified prior to
13 the adoption of Oversight Board Resolution SBOB/2012-14.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL
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SERVING AS THE SUCCESSOR HOUSING AGENCY, AS FOLLOWS:
15 Section 1. Pursuant to Health & Safety Code Sections 34176(e) and 34181(c), the
16 Oversight Board found and determined that the Deed of Trust is a "housing asset" as defined in o
17 Section 34176(e) and directed Successor Agency staff to transfer the Deed of Trust to the Successor
18 Housing Agency.
19 Section 2. The Mayor and Common Council hereby approves the subordination of the N
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20 Deed of Trust to the deed of trust securing the Refinancing Loan.
Section 3. The City Manager, or designee, is hereby directed to effectuate the execution d
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 Q
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.
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
I
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 597 EAST 29TH STREET, SAN BERNARDINO,
5 CALIFORNIA
6 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
7 Common Council of the City of San Bernardino at a meeting thereof, held on the
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8 day of 2012, by the following vote,to wit: �
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Council Members: Ayes Nays Abstain Absent c
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MARQUEZ N
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JENKINS _
12 VALDIVIA
13 W
SHORETT °
14 KELLEY M
���✓✓✓ 15 JOHNSON
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16 MCCAMMACK o
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Georgeann Hanna, City Clerk
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The foregoing Resolution is hereby approved this day of 2012.
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22 Patrick J. Morris, Mayor =°
City of San Bernardino a
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24 Approved as to Form:
25 JAMES F. PENMAN,
City Attorney
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(� 27 By:
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