HomeMy WebLinkAbout1980-176 RESOLUTION NO.�'Q°
RESOLUTION OF THE CITY OF SAN BERNARDINO ADOPTING THE FORM OF THE MORTGAGE
SERVICING AGREEMENT FOR THE PURPOSE OF SERVICING MORTGAGE LOANS MADE FOR
FINANCING RESIDENTIAL CONSTRUCTION
WHEREAS, the City of San Bernardino(the "City") is a municipal corporation duly created,established
and authorized to transact business and exercise its powers, all under and pursuant to the Constitution and
laws of the State of California, and the City Charter of the City, and the powers of the City include the
power to issue bonds for any of its corporate purposes; and
WHEREAS, pursuant to Ordinance No. 3853 the City may issue Revenue Bonds for the purpose of
Financing Residential Construction as authorized by said Ordinance; and
WHEREAS, in connection with its proposed issuance of Revenue Bonds for the purpose of Financing
Residential Construction authorized by the Ordinance, it is necessary that the City adopt a Mortgage
Servicing Agreement, pursuant to said Ordinance, for all Residential Construction to be undertaken or
completed pursuant thereto.
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE MAYOR AND COMMON
COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:
SECTION 1. Approval.
The Mortgage Servicing Agreement set forth on Exhibit A, attached hereto and made a part hereof, to
be used by the City in Financing Residential Construction, is hereby adopted and approved as to form with
the Servicer named therein.
SECTION 2. Authorization to Execute.
The Mayor and City Clerk shall execute the Mortgage Servicing Agreement on behalf of the City at
such time as said agreement is presented to the City in final form upon further authorization by the City to
so execute said agreement.
SECTION 3. Effective Date.
This Resolution shall take effect upon adoption. fM
ADOPTED AND APPROVED the . 1 day of ... 190..
[SEAL]
r ,
/Mayor of the ity
( of San Bernardino
ATTEST:
City Clerk of the City
of San Bernardino
60,005-39-2 1 5/l/80
STATE OF CALIFORNIA
COUNTY OF SAN BERNARDINO ) SS. CITY CLERK'S CERTIFICATE
CITY OFFSAN BERNARDINO ) RE ADOPTION OF RESOLUTION
I,&AuuA..47A1Clb, City Clerk of the City of San Bernardino, DO HEREBY CERTIFY that the
foregoing Resolution was duly adopted by said City at a meeting of said City held on the s: day
of ....yhay.......... 19AD, and that the same was passed and adopted by the following vote, to wit:
/c+'�ry;��pserd
AYES: Membs:
NOES: Members:
ABSENT.- Members: u , .�
ABSTAIN: Members:
City Clerk of the City
of San Bernardino
[SEAL]
STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) SS. CITY CLERK'S CERTIFICATE
CITY OF SAN BERNARDINO ) OF AUTHENTICATION
I. ........................ City Clerk of the City of San Bernardino, DO HEREBY CERTIFY that the above
and foregoing is a full, true and correct copy of Resolution No. .... of said City and that said Resolution was
adopted at the time and by the vote stated on the above certificate, and has not been amended or repealed.
City Clerk of the City
of San Bernardino
[SEAL]
60,005-39-2 2 5/l/80
(EXHIBIT A)
CITY OF SAN BERNARDINO
MORTGAGE SERVICING AGREEMENT
This Mortgage Servicing Agreement (the "Agreement") is entered into as of the date of execution
hereof, by and between the City of San Bernardino (the "City"), pursuant to the Ordinance, and the
Servicer named on the signature page hereof.
W I T N E S S E T H :
WHEREAS, the City is a municipal corporation duly created, established and authorized to transact
business and exercise its powers, all under and pursuant to the Constitution and laws of the State of
California,and the City Charter of the City,and the powers of the City include the power to issue bonds for
any of its corporate purposes; and
WHEREAS, pursuant to the Ordinance the City has promulgated Rules and Regulations with respect to
the making of Mortgage Loans to Finance Residential Construction in the City designated by resolution of
the City pursuant to the Ordinance; and
WHEREAS, the City has undertaken to purchase certain Mortgage Loans as provided by the Ordinance,
pursuant to a Mortgage Loan-Purchase Agreement, and, in connection therewith, to enter into this
Agreement with the Servicer whereby the Servicer will agree to service such Mortgage Loans for the City in
a competent and professional manner; and
WHEREAS, the City and the Servicer wish to set forth the terms and conditions upon which the Servicer
will service such Mortgage Loans for the City;
Now, THEREFORE, in consideration of the acceptance of the Servicer by the City as an eligible and
approved servicer of Mortgage Loans, as evidenced by the City's execution hereof, and of the compensation
to the Servicer and the mutual agreements hereinafter provided, the parties hereby agree as follows:
ARTICLE I — DEFINITIONS
1.1. Certain Definitions.The terms defined in this Section shall have the following meanings unless the
context otherwise requires:
"Mortgaged Premises" means the real property covered by the Mortgage.
"Mortgagor" means the maker of the Mortgage Loan and the maker of the Mortgage and, unless the
context otherwise requires, the owner of the Mortgaged Premises duly qualified to receive a Mortgage Loan
under the terms and conditions of the Law and the Rules and Regulations.
"Resolution" means the General Resolution and the Series Resolution for the issuance and sale of the
Bonds.
1.2. Definition of Terms in Resolution. Terms not otherwise defined herein shall have the meaning set
forth in the Resolution.
ARTICLE It — REPRESENTATIONS AND WARRANTIES OF SERVICER
2.1. Specific Representations and Warranties. The following representations and warranties are hereby
made by the Servicer:
(a) It is and will continue to be for the term of this Agreement a FNMA or FHLMC-approved
"servicer" for the type of Mortgage Loan being serviced.
(b) It is familiar with the Servicer Guide (the "Guide") of FNMA or FHLMC and all services and
duties customary to the servicing of mortgage loans.
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(c) It has, and its officers acting on its behalf have, full legal authority to engage in the activities
covered by this Agreement; and, furthermore, the execution and delivery of this Agreement and compliance
with the terms, conditions and provisions hereof will not conflict with or result in a breach of any of the
terms, conditions or provisions of the charter or bylaws of the Servicer or any agreement or instrument to
which it is bound, or laws or regulations of any administrative agency to which it is subject, or constitute a
default thereunder; the Servicer is not a party to or bound by any agreement or instrument or subject to any
charter or any other corporate restriction or any judgment, order, writ, injunction, decree, law or regulation
which now or in the future may materially and adversely affect the ability of the Servicer to perform its
obligations under this Agreement.
ARTICLE III — SERVICING
3.1. Continuous Service. The City hereby engages the Servicer and the Servicer agrees to service all
Mortgage Loans purchased by the City pursuant to the Mortgage Loan-Purchase Agreement, beginning
with the date of the first such purchase, until the principal and interest thereon shall have been paid in full.
With respect to every transaction whereby servicing duties as to Mortgage Loans owned by the City shall
hereafter be assumed by the Servicer, this Agreement shall be deemed to be part of every such transaction
and shall be deemed to be hereby incorporated in full by reference into any and all instruments evidencing
such transaction or any offer or acceptance pertaining thereto.
3.2. Servicing Obligations of Servicer. With respect to all Mortgage Loans to be serviced, the Servicer
shall perform all services and duties customary to the servicing of mortgages or as may be requested by the
City, and shall take all other steps requested by the City from time to time to perform the covenants,
representations and warranties herein contained, including, but not limited to the following:
(a) Files. The Servicer shall maintain an individual mortgage file on each Mortgage Loan and
related Mortgage. The Servicer shall maintain originals, or copies thereof, of all pertinent information,
notices, documents and correspondence relating to such Mortgage Loan, including an adequate record
of collection efforts. Each individual mortgage file shall be clearly marked to indicate the City's interest
in the Mortgage Loan and any loan number assigned to it by the City. The Servicer shall also maintain
such other files as the City shall from time to time reasonably request to be maintained, as set forth in
an Operating Memorandum.
(b) Insurance Settlements. The Servicer agrees to present, on behalf of the City, claims against all
insurers with respect to the Mortgage Loans or Mortgaged Premises and, in this regard, to take such
reasonable actions as shall be necessary to permit recovery under all insurance policies with respect to
the Mortgage Loans or Mortgaged Premises. The Servicer shall promptly notify the City of losses
exceeding$2,500 incurred under any insurance covering the Mortgaged Premises and shall recommend
a course of action. The Servicer, its successors or assigns shall be named as payee on insurance loss
drafts in place of the City. In the case of losses not exceeding $2,500 incurred under any insurance
covering the Mortgaged Premises, the Servicer shall collect the insurance proceeds and apply the same
as it deems most beneficial to the City, either to restore the Mortgaged Premises or to reduce the
principal-amount of the Mortgage Loan. In the case of losses exceeding $2,500, the Servicer shall carry
out the collection and application of insurance proceeds after consultation with the City. The Servicer
shall adhere to the terms of any Mortgage Loan and all applicable laws regarding the application of
insurance proceeds, all applicable PMI insurance requirements, City insurance requirements, other
insurance or guarantee requirements and prudent practices concerning notification, inspection and
approval.
(c) Notice of Lien, Bankruptcy; Probate Proceedings; Etc. The Servicer shall, at all times, use due
diligence to prevent the attachment of any prior liens to the Mortgaged Premises, and shall promptly
notify the City upon becoming aware that such a lien has or will attach. The Servicer shall promptly
notify the City upon becoming aware of any state insolvency or federal bankruptcy proceeding in which
any Mortgagor is seeking relief or is a defendant debtor, or the death of any Mortgagor or the sale,
transfer or vacancy of the Mortgaged Premises. The Servicer shall endeavor to ascertain the occurrence
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of waste, deterioration or lack of repair of any Mortgaged Premises or the occurrence of any other
default under the terms of any Mortgage, and shall promptly report such occurrence to the City.
Accurate records of the aforesaid matters shall be maintained by the Servicer.
(d) Protection/Enforcement of Security Interest. The Servicer shall take any and all actions
necessary to protect the City's security interest in any Mortgaged Premises (regardless of whether the
Mortgage Loan is in default), including, without limitation, any foreclosure or comparable proceeding
to convert the ownership of the Mortgaged Premises and representing the City in any proceeding which
might affect any Mortgage Loan or related Mortgage or its status and obtaining the full benefit of any
insurance benefits, subject to supervening instructions by the City. If such protective actions require
out-of-pocket expenses, the Servicer is authorized to expend up to one thousand dollars ($1,000.00) for
such purposes without the prior written consent of the City and up to two thousand dollars ($2,000.00)
upon the telephonic consent of the Project Coordinator appointed by the City; any greater expenditure
shall require the City's written consent.Any amounts so expended will be reimbursed by the City to the
Servicer without interest upon delivery to the City of proper receipts for such expenditures. Any
amounts due and payable hereunder from the City to the Servicer shall be paid solely from the Pledged
Revenues of the Program. Servicer may at its option offset any amounts due Servicer from City for
amounts expended under this paragraph against any remittances which shall be due or thereafter
become due from Servicer to City under paragraph (h) of this Section 3.2.
(e) Modification; Release. The Servicer will not modify, release, waive, change or amend any
term(s) or condition(s) of any Mortgage Loan or related Mortgage without the prior written consent of
the City. If the Servicer is authorized by the City to take any such action, the Servicer shall complete
any and all necessary documentation to effect the modification and to protect the City's security
interest in the Mortgaged Premises without expense to the City, unless the City expressly agrees to
assume such expense. The Servicer may at its option offset any amounts due the Servicer from City for
amounts expended under this paragraph against any remittances which shall be due or thereafter
become due from the Servicer to City under paragraph (h) of this Section 3.2.
(f) Change of Ownership. The Servicer shall immediately notify the City of any change of
ownership of any Mortgaged Premises of which the Servicer becomes aware and will take any and all
action required to protect the City's security interest therein.
In any case in which property subject to a Mortgage has or is about to be conveyed by the
Mortgagor, the Servicer is authorized to release the original Mortgagor and to take or enter into an
assumption agreement from or with the person to whom such property has been or is about to be
conveyed, provided that the Mortgage Loan shall satisfy both the underwriting criteria used in making
the original Mortgage Loan and the provisions of the Mortgage Loan-Purchase Agreement subsequent
to such assumption.The assumption agreement shall be inserted in the related mortgage file whereupon
it shall be deemed a part of such mortgage file for all purposes hereof. In connection with any such
assumption agreement, the interest rate of the related Mortgage Loan shall not be changed, and the
Servicer may charge the Mortgagor such fees as could be charged for a new Mortgage Loan under the
Mortgage Loan-Purchase Agreement.
Notwithstanding the foregoing paragraph or any other provision of this Agreement, the Servicer
shall not be deemed to be in default, breach or any other violation of its obligations hereunder by reason
of any assumption of a Mortgage Loan by operation of law or any assumption which the Servicer may
be restricted by law from preventing, for any reason whatever.
(g) Military Indulgence. When in the military service, a Mortgagor may be entitled to benefits
under the federal Soldiers' and Sailors' Civil Relief Act, as amended. The Servicer should be familiar
with and act in accordance with the requirements of such act. Upon receipt of the City's approval, the
Servicer may offer appropriate relief to such a Mortgagor such as a reduction in monthly payments
under the Mortgage Loan. In the event any such relief is granted, the Servicer shall continue to
maintain at least semiannual contact with the Mortgagor to determine whether such relief should be
revised in view of the Mortgagor's then current financial situation.
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(h) Collection. The Servicer shall proceed diligently and use its best efforts to collect all payments
due under the terms of the Mortgage Loans and related Mortgages as they become due and payable,
and shall use its best efforts to obtain compliance with all other terms of the Mortgage Loans and
related Mortgages. The Servicer shall maintain accurate records of such payments, indicating the
principal, interest, outstanding balance and any other charges. On or before the last day of each
calendar month, the Servicer shall remit to the City or its designated depository, by such method as
shall be acceptable to the City, all collections of such payments made through the twenty-fifth (25th)
day of such month, less (1) any amount paid and deposited into an escrow fund as provided in
paragraph (k) below, (2) Servicer's reimbursable expenses as provided in this Section 3.2, and (3)
Servicing Compensation as provided in Section 4.1 hereof. All moneys collected by the Servicer on
behalf of the City pursuant to this Section 3.2(h) shall be held by the Servicer in a non-interest bearing
trust account for the benefit of the City, separate and apart from other funds of the Servicer, and shall
be distributed from such account in accordance with the provisions of this Agreement. That portion of
such moneys to be remitted to the City shall be deposited with the Trustee for the City under the
General Resolution.
(i) Reporting. All funds and revenues sent to the City pursuant to paragraph (h) above shall be
accompanied by a report which shall identify the Mortgage Loans to which the payments apply, and
the amounts attributable to the payment of regularly scheduled principal payments and of other
principal payments (including insurance or liquidation proceedings representing either of them). Such
report shall also note any delinquencies or defaults in any of the Mortgage Loans or related Mortgages
and describe what action is being taken to correct such delinquencies or defaults, if such information is
requested. The Servicer shall also supply the City with such other reports as the City may reasonably
require, all as may be set forth in an Operating Memorandum.
0) Facilities; Property. The Servicer shall maintain adequate facilities satisfactory to the City for
the servicing of Mortgage Loans. The Servicer shall keep all mortgage files and related documents and
records held pursuant hereto with the same care exercised by private institutional mortgage investors
for their own investments. The Servicer shall bear the entire cost of restoration of any mortgage files
and related documents and records damaged or lost from any cause.
(k) Escrows. To the extent provided in the Mortgage Loan, the Servicer shall collect in a special
custodial account and administer all funds paid by Mortgagors under each Mortgage Loan and related
Mortgage to cover all expenses to be paid thereunder for taxes, special assessments, ground rents and
other charges which are or may become first liens upon the Mortgaged Premises, Hazard Insurance
premiums and Mortgage Insurance premiums, as directed by the City. The Servicer may, if requested
by the Mortgagor,also collect and administer funds for the payment of expenses not provided for in the
Mortgage Loan and related Mortgage,such as life insurance on the Mortgagor. All the aforesaid funds
are hereinafter referred to as "Escrows." In the event of any insufficiency in the collection of escrow
payments the Servicer shall make such payments for which escrow payments were provided prior to any
penalty or termination date. The City will reimburse the Servicer for such payments solely from
Pledged Revenues attributable to the Program. The Servicer's obligation to cause Hazard Insurance or
Mortgage Insurance to be maintained is absolute, provided such insurance continues to be available
through commercial or governmental sources, regardless of any failure of the Mortgagor to pay in
timely fashion the premiums therefor. The City shall reimburse the Servicer for the full amount of any
such premiums so paid by the Servicer. The Servicer shall analyze all Escrows at least once each year
for the purpose of determining that sufficient funds are being collected to meet all expenses. The
Servicer may at its option offset any amounts due the Servicer from City for amounts expended under
this paragraph against any remittances which shall be due or thereafter become due from the Servicer
to City under paragraph (h) of this Section 3.2. Any interest payable to the Mortgagor for Escrows or
any other funds held by the Servicer, whether due to contractual agreement or operation of law, shall
be paid by the Servicer, at the Servicer's sole expense.
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(1) Hazard Insurance. The Servicer agrees to cause each Mortgagor to maintain Hazard Insurance
in effect on all Mortgaged Premises secured by a Mortgage, and agrees to indemnify the City for any
loss suffered by the City because Hazard Insurance is not in effect with respect to any Mortgaged
Premises at the time a loss that would otherwise be covered by Hazard Insurance is incurred, provided
that Hazard Insurance was commercially available immediately prior to the time such loss was
incurred and was not in effect due to a breach by Servicer of its obligation to maintain such insurance.
(m) Mortgage Insurance. With respect to Mortgage Loans insured by a PMI, the Servicer shall
satisfy and comply with, and use its best efforts to obtain compliance by the Mortgagor with, all
provisions and requirements of the applicable insurance. Notwithstanding anything contained herein to
the contrary, neither this Agreement nor the City shall take, perform, direct or require the Servicer to
take or perform any actions which may result in any Mortgage Loan losing insurance coverage or
guarantee protection.
(n) Delinquencies. The Servicer shall give special attention to delinquent accounts and shall use
due diligence to obtain current payment of such account. Without exclusion to or limitation of any
other rights or remedies the City may have under the terms of this Agreement or at law or in equity, the
following provisions shall apply to the servicing of delinquent accounts:
(1) Mortgage Loans. On any Mortgage Loan which is less than ninety (90) days delinquent,
the Servicer shall follow the customary, usual and prudent business practices of its geographic area
in collection efforts, provided that no change or modification shall be made in the terms of the
Mortgage Loan or related Mortgage without the prior written consent of the City.
(2) Delinquent Mortgage Loans. On any Mortgage Loan which is delinquent ninety (90) days
or more, the Servicer shall notify the City and Mortgagor of such delinquency, and shall make any
and every reasonable effort to rectify any such delinquencies and may, in connection therewith,
waive any prepayment charge or penalty interest in connection with the prepayment of a Mortgage
Loan and arrange a schedule for the liquidation of delinquent items, which schedule shall not be
longer than six (6) months. If no such schedule can be arranged, the Servicer shall, on behalf of the
City, foreclose upon or otherwise comparably convert the ownership of properties securing such
Mortgage Loans as come into and continue in default and as to which no satisfactory arrange-
ments can be made for collection of delinquent payments. In connection with such foreclosure or
other conversion, the Servicer shall, consistent with the foregoing, follow such practices and
procedures as it shall deem necessary or advisable and as shall be normal and usual in its general
mortgage servicing activities.
(o) Prepayment. The Servicer will not accept any prepayment of a Mortgage Loan except as
permitted by the terms of the Mortgage Loan.
(p) Advances for Uninsured Losses. In the case of damage to Mortgaged Premises from an
uninsured cause, the Servicer may (but is not obligated to) expend its own funds toward the restoration
of the property if it shall determine (i) that such restoration will increase the proceeds of liquidation of
the Mortgage Loan to the City, after reimbursement to itself for such expenses, and (ii) that such
expenses will be recoverable to it through liquidation proceeds (respecting which it shall have priority
for reimbursement of funds expended).
ARTICLE IV — COMPENSATION OF SERVICER
4.1. Servicing Compensation. Servicing compensation for the performance of the Servicer's duties
hereunder shall be withheld by Servicer from the amounts remitted monthly to the City pursuant to
paragraph (h) of Section 3.2 hereof, and shall consist of: (1) an amount equal to one-twelfth of .... one
percent of the aggregate unpaid principal amount as of the first day of such month that Mortgage Loans
owned by the City are serviced by the Servicer hereunder, (2) late payment charges collected by the Servicer
during such month, and (3) fees collected by the Servicer during such month for change of ownership,
modifications and mortgagee's statements and demands.
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ARTICLE V — REMEDIES
5.1. Remedies Cumulative. Each party hereto shall have all remedies available at law or in equity to
enforce any of the terms and provisions of this Agreement, including, but not limited to, actions at law for
damages and equitable actions seeking rescission of this Agreement and/or injunctive relief(mandatory or
prohibitory) to prevent the breach or threatened breach of any term or provision hereof or to enforce the
performance of all terms and conditions herein. All remedies shall be cumulative; the exercise of any one or
more of them shall not in any way alter or diminish the rights of the exercising party to any other remedy
provided herein or at law or in equity.
5.2. Attorney's Fees. In the event of any default and/or breach by the Servicer of any of the terms and
conditions of this Agreement, the City shall be entitled to reimbursement from the Servicer of all of the
City's costs and expenses in enforcing any of the terms and conditions of this Agreement, including all
reasonable and necessary attorney's fees incurred therein. In the event of any default and/or breach by the
City of any of the terms and conditions of this Agreement, the Servicer shall be entitled to reimbursement
from the City of all the Servicer's costs and expenses in enforcing any of the terms and conditions of this
Agreement, including all reasonable and necessary attorney's fees incurred therein. The Servicer may at its
option offset any amounts due the Servicer from City hereunder against any remittances which shall be due
or thereafter become due from the Servicer to City under paragraph (h) of Section 3.2 hereof.
5.3. Waiver. No failure on the part of any party hereto to enforce any covenant or provision herein
contained, or any waiver of any right hereunder, shall discharge or invalidate such covenant or provision or
affect the right of such party to enforce the same in the event of any subsequent breach or default; failure to
demand strict performance of any covenant or condition of this Agreement shall not be deemed a waiver of
such covenant or condition.
ARTICLE VI — TERMINATION
6.1. Defaults. "Event of Default", wherever used in this Section, means any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary or involuntary, or be
effectual by operation of law pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body superior to the City):
(1) Failure by the Servicer to deposit or remit collections of revenue pursuant to Section 3.2(h)
hereof on the days specified therein,or, in case such collections are not received, within five (5) business
days after written notice thereof; or
(2) Default or breach by either party in the performance of any provision of this Agreement, and
continuance of such default or breach for a period of thirty (30) days after there has been given, by
registered mail, return receipt requested, to the defaulting or breaching party by the other party, a
written notice specifying such default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(3) The entry of a decree or order by a court having jurisdiction in the premises adjudging the
Servicer bankrupt or insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Servicer under the Federal Bankruptcy
Act or any other applicable federal or state law, or appointing a receiver, liquidator, assignee, trustee,
sequestrator or other similar official for the Servicer or for any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of one hundred twenty (120) days; or
(4) The institution by the Servicer of proceedings to be adjudged bankrupt or insolvent, or the
consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Act or any
other applicable federal or state law, or the consent by it to the filing of any such petition or to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the
Servicer or of any substantial part of its property, or the making by it of an assignment for the benefit
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of creditors, or the admission by it in writing of its inability to pay its debts generally as they become
due, or the taking of corporate action by the Servicer in furtherance of any such action.
(5) If the City shall fail or refuse to comply with the provisions of the Ordinance, or shall default
in the performance or observance of any of the covenants, agreements, or conditions on its part in the
Resolution, any Supplemental Resolution, or in the Bonds contained, and continuance of such default
for a period of ninety (90) days; or if the City shall file a petition or answer seeking reorganization or
arrangement under the federal bankruptcy laws or any other applicable law of the United States of
America, or if a court of competent jurisdiction shall approve a petition, filed with or without the
consent of the City, seeking reorganization under the federal bankruptcy laws or any other applicable
law of the United States of America,or if, under the provisions of any other law for the relief or aid of
debtors, any court of competent jurisdiction shall assume custody or control of the City or of the whole
or any substantial part of its property.
If an Event of Default occurs, the party adversely affected by such Event of Default, at its sole option,
may terminate this Agreement in whole, or as to one or more or all Mortgage Loans and related Mortgages
serviced hereunder, at any time by giving thirty (30) days' notice.
6.2. Voluntary Termination. The parties hereto may, upon mutual agreement, terminate this Agree-
ment in whole,or as to one or more or all Mortgage Loans and related Mortgages serviced hereunder, at any
time, provided that the effective date of any such termination shall be no earlier than thirty (30) days after
such agreement or such earlier date as(1) all Mortgage Loans serviced hereunder have been repaid in full or
sold or otherwise assigned, transferred or conveyed by the City, and (2) all payments due either party hereto
by the other have been satisfied.
ARTICLE VII — MISCELLANEOUS
7.1. Indemnity. The Servicer shall indemnify the City and hold it harmless of and from any and all loss,
damage or expense, including attorneys' fees, that the City may sustain or incur as a result of any willful or
knowing failure on the part of the Servicer to properly perform its services, duties and obligations under the
terms and provisions of this Agreement.
7.2. Independent Contractor. Under the terms and conditions of this Agreement, the Servicer contracts
with the City as an independent contractor to service Mortgage Loans for the City. The Servicer is neither
an agent of the City nor the City's assignee. The contract between the Servicer and the City in each instance
consists of this Agreement, the Law, the Resolution and the Rules and Regulations which are incorporated
herein by reference. The City is entering into this Agreement because of and in reliance upon the skill and
expertise of the Servicer and the Servicer is acting in a fiduciary capacity as to the City.
7.3. Survival of Representations, Warranties and Agreements. The representations, warranties and
agreements of the parties contained in this Agreement shall remain operative and in full force and effect
regardless of any investigations made by either party or any termination of this Agreement.
7.4. Notices. Any notice to be given hereunder to either party shall be given by service thereof or by
depositing such notice in the United States mail in the State of California, duly registered or certified, with
postage prepaid, and addressed at the address shown on the then current letterhead and such notice to be
effective upon receipt.
Either party hereto may, from time to time by written notice to the other, designate a different address
which shall be substituted for the one specified above. If any notice or other document shall be sent
registered or certified mail as aforesaid, the same shall be deemed to have been effectively served or
delivered at the expiration of seven (7) calendar days following the deposit of said notice in the United
States mail in the State of California.
7.5. Governing Law.All questions with respect to the construction of this Agreement,and the rights and
liabilities of the parties hereto, shall be governed by the laws of the United States of America and the State
of California.
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7.6. Captions. None of the captions of the paragraphs of this Agreement shall be construed as a
limitation upon the language of said paragraphs, said captions having been inserted as a guide and partial
index and not as a complete index of the contents of the paragraphs.
7.7. Assignment. The City shall have the right, without consent of the Servicer, to assign, convey, or
transfer, in whole or in part, its interest in any Mortgage Loan or related Mortgage and in this Agreement,
and the assignee or transferee shall accede to the rights and obligations of the City with respect to such
Mortgage Loan or related Mortgage. All references to the City herein shall be deemed to include its
assignees, designees or transferees. The City shall have the right to direct the Servicer to send remittances,
notices, reports and other communications to any person or entity designated by the City and may designate
any such person to exercise any and all rights of the City hereunder, as set forth in an Operating
Memorandum. However, the Servicer agrees that because of the nature of the services to be performed, the
Servicer shall not have the right to transfer, assign, convey, hypothecate or pledge any of its interest in this
Agreement, without the express written consent of the City and the Trustee under the General Resolution,
which consent shall not be unreasonably withheld.
7.8. Inspection. Upon request of the City, either before or after the termination of this Agreement, the
Servicer shall permit the City at any time during normal business hours to inspect any files relating to
Mortgage Loans and related Mortgages and all of the Servicer's records pertaining to mortgage operations
relating to the City.
7.9. Amendments. This Agreement may be amended at any time by the substitution of pages which
have been initialed by authorized representatives of both the City and the Servicer, or by an Operating
Memorandum approved by the City and the Servicer and attached hereto as an addendum.
7.10. Equal Opportunity. The City and the Servicer shall each comply with Title VI of the Civil Rights
Act of 1964, and Title VIII of the Civil Rights Act of 1968, and any applicable regulations and orders
thereunder, and with Executive Order 11063, Equal Opportunity in Housing, issued by the President of the
United States on November 20, 1962.
7.11. Errors and Omissions. The Servicer shall at all times maintain adequate "fidelity coverage" or
"bond" and "errors and omissions insurance" covering losses with respect to Mortgage Loans and related
Mortgages which it is servicing, in form and amount and with a surety or insurance carrier satisfactory to
the City.
7.12. Reference to Guide. With respect to any questions in connection with the servicing of Mortgage
Loans and related Mortgages which are not addressed hereby, the Servicer shall follow the practices and
procedures specified in the Guide unless it deems the same unreasonable in light of current mortgage loan
servicing activities for mortgage loans serviced for private investors in mortgage loans.
7.13. Changes in Organization/Bankruptcy/Fraud. The Servicer shall immediately notify the City of
any contemplated material change(s) in its organization such as mergers or consolidations, change of name
or corporate charter, etc. The Servicer shall immediately notify the City of any voluntary or involuntary
proceedings which might result in bankruptcy, reorganization, dissolution, liquidation, the appointment of a
trustee or receiver,an assignment for benefit of creditors or the Servicer having its activities restricted in any
manner related to its performance of material obligations hereunder by any governmental agency. The
Servicer shall promptly notify the City of all cases of embezzlement, fraud,criminal or dishonest acts of any
employee, officer or agent, or of the cancellation or non-renewal of fidelity bonding coverage relating to or
having an effect upon the City's rights with respect to any Mortgage Loan serviced hereunder. The Servicer
shall promptly notify the City of any other matter which might constitute an Event of Default hereunder.
7.14. Severability. Each and every section of this Agreement is, and shall be construed to be, a separate
and independent covenant and agreement. If any term or provision of this Agreement or the application
thereof shall to any extent be invalid or unenforceable, the remainder of this Agreement, or the application
of such term or provision to circumstances other than those to which it is invalid or unenforceable shall not
be affected thereby, and each term and provision of this Agreement shall be valid and shall be enforced to
the extent permitted by law.
60,005-39-2 8 5/l/80
7.15. Execution.This Agreement may be executed in counterparts,each of which shall be deemed to be
an original, and such counterparts shall constitute one and the same instrument.
EXECUTED at, z&6YlfJ. ?d,,11, California, this ..I*f. day of . ................. 19t�o
CITY OF SAN BERNARDINO
r
B it
Z
[SEAL]/
ATTEST:
City Clerk
APPROVED AS TO FORM:
Ole
City Attorney
SANTE FE FEDERAL SAVINGS & LOAN
ASSOCIATION
("SERVICER"),
a federally chartered mutual
savings and loan association
By
President
[SEAL]
By
Assistant Secretary
60,005-39-2 9 5/l/80
STATE OF CALIFORNIA ) ss.
COUNTY OF SAN BERNARDINO )
- q <
On this Z....-day of/'o/'.:t in the year :. q.;,; before me, .:..g. .-ae! ................... anotary
public in and for the State of California, duly commissioned and sworn, personally appeared .w..t?...
1c:11::�.,1�h
...................................I known to me to be the Mayor, and ..: h.s: r: �.... .l�x.u. ...................... known to
me to be the City Clerk, respectively, of the City of San Bernardino, that executed the within instrument,
and known to me to be the persons who executed the within instrument on behalf of said City therein
named, and acknowledged to me that such City executed the within instrument pursuant to a resolution of
said City.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal in the
County of San Bernardino on the day and year in this certificate first above written.
(OPFICIAL SEAL) Notary Public in and for the State of California
SANDRA A. BAXTER
NOTARY PUBLIC , CALIFORNIA
?7rHrlal IER;cZplyO COUNTY
My Commission Expires Dec. 7, 1981
--. My commission expires: ................................
STATE OF CALIFORNIA ss.
COUNTY OF...........................
On this ...... day of......... in the year ... , before me. ...............................................a notary public in and
for the State of California,duly commissioned and sworn, personally appeared ...............................................
.................. known to me to be the ............................................... and ............................................... known to
me to be the ............................................... respectively, of Santa Fe Federal Savings & Loan Association, a
federally chartered mutual savings and loan association, that executed the within instrument, and known to
me to be the persons who executed the within instrument on behalf of said association and acknowledged to
me that such association executed the within instrument pursuant to a resolution of its board of directors.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal in the
County of ........................... on the day and year in this certificate first above written.
Notary Public in and for the State of California
(Notarial Seal)
My commission expires: ................................
60,005-39-2 10 5/l/80