Loading...
HomeMy WebLinkAboutItem No. 20 - Subordination of a Deed of Trust in Connection with 275 East 49Th Street, San Bernardino, California Consent Calendar City of San Bernardino Request for Council Action Date: June 17, 2020 To: Honorable Mayor and City Council Members From: Teri Ledoux, City Manager By:Michael Huntley, Community & Economic Development Director Subject: Subordination of a Deed of Trust in Connection with 275 East 49TH Street, San Bernardino, California Recommendation Adopt a Resolution No. 2020-141 of the Mayor and City Council of the City of San Bernardino, California, acting as the Successor Housing Agency to the Redevelopment Agency of the City of San Bernardino, approving a Subordination of a Deed of Trust in connection with refinancing the Senior Mortgage relating to real property located at 275 th East 49 Street, San Bernardino, California. Background On October 17, 1994, the Community Development Commission of the City of San Assistance Program, subsequently renamed the Homebuyer Assistance Program, which made available a limited number of deferred payment (principal and interest) second mortgages. 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 to ensure the availability of affordable housing to income-qualified home buyers in the community. On January 9, 2012, the Mayor and Common Council adopted Resolution 2012-12 the former Agency, in accordance with AB1X 26. On January 23, 2012, the Mayor and City Council adopted Resolution 2012-19 further confirming that the City would serve as housing functions previously performed by the Agency. Discussion The Homebuyer Assistance Program allows program participants to refinance their mortgage only to lower the interest rate and/or term. Should the homeowner request to , the subordination request would be denied and the Agency loan would become due. Page 1 6753 th The owner for the property located at 275 East 49 Street received down payment assistance and is now requesting to refinance their existing first mortgage. The owner of the property listed above has submitted a subordination request to Successor Housing Agency staff and the application has been reviewed and approved. To proceed with the expressly subordinated to the new first deed of trust. Therefore, staff requests that the City Manager, or her designee, be authorized to sign and cause to be recorded the subordination agreement and associated documents which will allow the property owner to refinance their first mortgage. 2020-2025 Key Strategic Targets and Goals Adoption of the attached resolution aligns with Key Strategic Target No. 3: Improved Quality of Life. Refinancing supports homeownership and sustains neighborhoods throughout the City. Fiscal Impact There is no fiscal impact to the General Fund since the staff processing the request is funded by the Recognized Obligation Payment Scheduled (ROPS). Conclusion It is recommended that the Mayor and City Council of the City of San Bernardino, California, acting as the Successor Housing Agency to the Redevelopment Agency of the City of San Bernardino California, adopt a Resolution No. 2020-141, approving a Subordination of a Deed of Trust in connection with refinancing the Senior Mortgage th relating to real property located at 275 East 49 Street, San Bernardino, California. Attachments Attachment 1 Resolution No. 2020-141 th Attachment 2 Subordination Agreement for 275 East 49 Street th Ward: 4 Ward Synopsis of Previous Council Actions: January 23, 2012 Mayor and City Council adopted Resolution 2012-19 further confirming that the City wou housing functions previously performed by the Agency. Page 2 RESOLUTION NO. 2020-141 RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, ACTING 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 275 TH EAST 49 STREET, SAN BERNARDINO, CALIFORNIA WHEREAS, on January 9, 2012, the Mayor and Common Council of the City of San -12 confirming that the City of San Bernardino would serve as the Successor Agency to AB1X 26 (The Redevelopment Agency Dissolution Act); and WHEREAS on January 23, 2012, the City Council adopted Resolution No. 2012-19 providing for the City to serve as the Successor Housing Agency and perform the housing functions previously performed by the Agency; and WHEREAS, pursuant to Health & Safety Code Section 34181(c) of AB1X26 the Oversight Board is to direct the transfer of housing responsibilities, including all rights, powers, duties, obligations and assets, to the Successor Housing Agency; and WHEREAS, pursuant to Health & Safety Code Section 34176(e)(1) of AB1484 the restrictions on the use of real property such as affordability covenants entered into by the Agency are considered a housing asset; and th WHEREAS, a Deed of Trust affecting real property located at 275 East 49 Street, San December 15, 2008, and recorded on January 30, 2009, as Instrument Number 2009-0042498 in the Official Records of the County of San WHEREAS, the terms of the Deed of Trust allow the Trustor to obtain the release of the security interest of the First Mortgage Lender in the Property for the purpose of a third-party lender which refinances the purchase money mortgage of the First Mortgage Lender; and WHEREAS, an escrow has been opened on the Property affected by the Deed of Trust on which owner(s) (Curtis W. Philbert) request the subordination so that they can proceed on a refinance and a clear lenders title policy can be provided to the new lender of the Property; and WHEREAS, the Successor Housing Agency desires to confirm that the Deed of Trust is a housing asset and/or housing function, and desires to authorize Successor Housing Agency Resolution No. ___ staff to transfer all rights and interest in the Deed of Trust to the City in its capacity as the Successor Housing Agency; and WHEREAS, Successor Housing Agency staff desires to cause to be signed and recorded a subordination agreement for the purposes of causing the new third-party lender to have a security interest in the Property senior to that of the Successor Housing Agency; and BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO, ACTING AS THE SUCCESSOR HOUSING AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, AS FOLLOWS: SECTION 1. The above recitals are true and correct and are incorporated herein by this reference. SECTION 2. Pursuant to Health & Safety Code Section 34176, the Successor Housing Agency to the Redevelopment Agency of the City of San Bernardino does hereby find and determine that the Deed of Trust is a housing asset and hereby authorizes the City Manager or his/her designee, to execute the Subordination Agreement (attached and incorporated herein as Bernardino County Recorder. SECTION 3. The City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. SECTION 4. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable. SECTION 5. Effective Date. This Resolution shall become effective immediately. APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the Acting City Clerk this ___ day of __________ 2020. John Valdivia, Mayor City of San Bernardino Attest: Genoveva Rocha, CMC, Acting City Clerk Resolution No. ___ Approved as to form: Sonia Carvalho , City Attorney Resolution No. ___ CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO) ss CITY OF SAN BERNARDINO ) I, Genoveva Rocha, CMC, Acting City Clerk, hereby certify that the attached is a true copy of Resolution No. 2020-___, adopted at a regular meeting held on the ___ day of _______ 2020 by the following vote: Council Members: AYES NAYS ABSTAIN ABSENT SANCHEZ _____ _____ _______ _______ IBARRA _____ _____ _______ _______ FIGUEROA _____ _____ _______ _______ SHORETT _____ _____ _______ _______ NICKEL _____ _____ _______ _______ RICHARD _____ _____ _______ _______ MULVIHILL _____ _____ _______ _______ WITNESS my hand and official seal of the City of San Bernardino this ___ day of ____________ 2020. Genoveva Rocha, CMC, Acting City Clerk 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 290 North D Street San Bernardino, CA 92401 Owner Name: Curtis W Philbert th 275 East 49 Street San Bernardino, CA 92404 SPACE ABOVE THIS LINE FOR RECORDERS USE. Form of SUBORDINATION AGREEMENT 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 OR LATER SECURITY INSTRUMENT. This AGREEMENT, made this day of , 2020, by (Curtis W Philbert), Owner of the 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; WITNESSETH WHEREAS, Owner(s) did on December 15, 2008, execute a Deed of Trust to Fidelity National Title Company, a California Corporation, as trustee, covering: LEGAL DESCRIPTION: The land herein after referred to is situated in the City of San Bernardino, County of San Bernardino, State of California, and is described as follows: LOT 7 IN BLOCK 19 OF TRACT 1834, SAN BERNARDINO HEIGHTS, IN THE CITY OF SAN BERNARDINO, COUNTY, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 26, PAGE(S) 52, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. to secure a Note in the sum of $67,500 dated December 15, 2008 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 January 30, 2009, as Instrument No. 2009-0042498, Official Records of said county; 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 pursuant to Mayor and Common Council Resolution No. 2012-19 dated January 23, 2012; WHEREAS, Owner has executed, or is about to execute, a Deed of Trust and Note in the sum of not to exceed $130,750, dated ________________________, in favor of Quicken Loans, LLC ISAOA , hereinafter referred be recorded concurrently herewith; and 1 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. 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 agreed as follows: 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 therein described, prior and superior to the lien or charge or the Deed of Trust first above mentioned. 2. That Lender would not make its loan above described without this Subordination Agreement. 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 of Trust in favor of the lender above referred to and shall supersede and cancel, but only 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 subordination of the lien or charge thereof to another Deed or Deeds of Trust or to another mortgage or mortgages. Successor Beneficiary declares, agrees and acknowledges that: (a) Lender in making disbursements pursuant to any such agreement is under no obligation or duty to, nor has Lender represented that it will, see to the application of such proceeds by the 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; (b) Successor Beneficiary 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 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 (c) 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. 2 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 as the Successor Housing Agency to the Redevelopment Agency of the City of San Bernardino _____________________________________ ____________________________________ Teri Ledoux, City Manager Owner City of San Bernardino Owner (ALL SIGNATURES MUST BE ACKNOWLEDGED) IT IS RECOMMENDED THAT, PRIOR TO THE EXECUTION OF THIS SUBORDINATION AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS WITH RESPECT THERETO. 3