HomeMy WebLinkAboutR13-Redevelopment Agency
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R
AQENCY.RCMEST FOR CD.ISSION/COUNCIL AbtlON
From: Glenda Saul, Executive Director
Subject: APPROVING CERTAIN DOCUMENTS AND
ACTIONS - 1985 SINGLE FAMILY
MORTGAGE REVENUE BONDS
Dept: Redevelopment Agency
Date: November 25, 1985
Synopsis of Previous Commission/Council action:
12-17-84 Resolution 84-552 authorized submission of an application to the Mortgage
Bond Allocation Committee for Single Family Bonds in 1985.
09/85 Notified by the State that San Bernardino had been allocated $36 million
for the issuance of Single Family Bonds in 1985.
11-04-85 First reading of the Ordinance.
11-04-85 Approved current structure of the proposed 1985 issue.
11-18-85 Adopted Ordinance MC 483 establishing a Home Mortgage Finance Program.
Recommended motion:
(MAYOR AND COMMON COUNCIL)
RESOLUTION OF THE I'.AYOR AND _COMMON COUNCIL OF THE CITY OF SAN BERNARDINO,
CALIFORNIA, APPROVING CERTAIN DOCUMENTS AND AUTHORIZING CERTAIN ACTIONS
IN CONNECTION WITH THE AUTHORIZATION, SALE AND ISSUANCE OF ITS CITY OF
SAN BERNARDINO, CALIFORNIA, SINGLE FAMILY RESIDENTIAL MORTGAGE REVENUE
BONDS (GNMA MORTGAGE-BACKED SECURITIES PROGRAM), ISSUE 0",1985, IN
PRINCIPAL AMOUNT NOT TO EXCEED $36,000,000.
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Signature
GLENDA SAUL
Contact person:
FUNDING REQUIREMENTS:
Amount: $
N/A
Phone: 383-5081
N/A
Ward:
N/A
Project:
Date: December 2, 1985
Supporting data attached:
YES
No edverse Impact on City:
Council Notes:
nOL..")V'/~'D
Agenda Item Noll-/ .3
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CI'N OF SAN BERNARDIQ, - REQU~T FOR COUNCIL AC~ON
STAFF REPORT
On November 18, 1985, the Mayor and Common Council adopted Ordinance MC 483
establishing a Home Mortgage Finance Program to enable the City to issue a Single
Family Mortgage Revenue Bond in 1985.
The Resolution before you today approves certain actions and documents in connection
with this 1985 Single Family issue. The documents are as follows:
Rules and Regulations Establishing Eligibility Criteria for Mortgagors:
. Requires mortgagors live in house for at least 2 years.
. Residence not be used for a trade or business.
. Home mortgage may be assumed upon sale provided purchaser is eligible under bond
criteria.
Rules and Regulations Establishing Eligibility Criteria for Lenders:
. Lender must be authorized to do business in California.
. Must be approved by Government National Mortgage Association (GNMA) to sell and
service these mortgages.
. Delinquency ratio shall not exceed the average as reported by San Francisco Federal
Home Loans Bank Board.
Developer Agreement: Sets forth terms and conditions for both the City and the
participating developer.
Origination, Servicing and Administration Agreement: Sets forth terms and
conditions for First Interstate Mortgage Company of Colorado as Lender and Program
Administrator and Seattle First National Bank as Trustee and the City as Issuer.
Trust Indenture: Sets forth terms and conditions between the City and the Trustee.
The amount of the bond is not to exceed $36 million.
Following is a recap of the proposed issue:
75-0264
Clif OF SAN BERNARDI~O - REQU*'T FOR COUNCIL AC~ON
STAFF REPORT
"
SINGLE FAMILY 1985
Developer
Amount
fi of Units
Location
Price Ra1\j!;e
Willow Woods
$ 5,000,000
86
Pepper & Randall
Rialto
$73,990-93,990
Shadow Meadows
500,000
137 Condo Units
SW Corner of Olive
& Irvington, S.B.
$81,900-$93,900
NuTech
8,400,000
16 Townhomes
56 Single
9th & Del Rosa
San Bernardino
$55,500-$64,500
$81,900-$95,900
$75,000
security Pacific
360,000
7
W. Loyola & Windsor
San Bernardino
Southpointe
5,000,000
$19,260,000
Barton & Waterman
$89,900-$108,900
RDA
In-Fill
2,000,000
Enterprise Zone
Rehab-Remodeling
2,000,000
$23,260,000
City Wide
First Interstate
of Colorado
8,000,000
$31,260,000
Existing
The buyer must be a first time home buyer except for target area homes and except for
ten percent of the aggregate amount of mortgage loans. Eligible incomes may range
from $27,000 to $49,000 for buyers.
0863K{EB
12-02-85
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SBE 068_6(2,232)/1247S/kl
11121/85
RESOLUTION NO.
A RESOLUTION OF THE MAYOR AND COMMON COUIlCIL or
THE CITY OF SAN BER)lARDUIO, CALIFOlUlIA, APPROVING
CERTAIN DOCUMENTS AND AUTHORIZING CERTAIN ACTIONS
IN CONNECTION WITH THE AUTHORIZATION, SALE AND
ISSUANCE OF ITS CITY OF SAN BBRNARDINO,
CALIFORNIA, SINGLE FAMILY RESIDENTIAL MORTGAGE
REVENUE BONDS (GNMA MORTGAGE-BACKED SBCURITIES
PROGRAM), ISSU! OF 1985, III PRINCIPAL AMOUIIT NOT
TO EXCEED $36,000,000
WHEREAS, there is a shortage in the City of San Bernardino,
California (the .City.), of decent, safe and sanitary housinlJ Mhich
is affordable by persons and families in the lower end of the
purchasing spectrum and a consequent need to encouulJe the
( ,nstruction or development of homes affordable by such persons and
otherwise to increase the housing supply in the City for such
penons; and
WHEREAS, the City has, by the approval by the Mayor and
common council of Ordinance No. MC483. dated November 18, 1985,
adopted a home mortgage finance program (the .pro;ram.) pursuant to
Section 52000. !! seq., of the Health and Safety Code of the State
of California (the wAct.) for persons and families within the income
limits established by the Act and the City desires at this time to
issue ainlJle family residential mort;a;. revenue bonds pursuant to
the Act to provide funds to implement the prOlJrami and
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WHEREAS, the city finds and determines that the proljlum
complies with the Land Use Element and the HOusing Element of the
City's General Plan and such Program shall be implemented to finance
the purchase of mortgage loans pursuant to the proljlram; and
WHEREAS, all acts. conditions and things required by the
Act, and by all other laws of the State of California. to esist. to
have happened and to have been performed precedent to and in
connection with the issuance of the aforelaid ain;le family
residential mortgage revenue bonds exist, have happened and have
been performed in regular and due time. form and manner as required
by law. and the City is now duly authorized and empowered. pursuant
to each and every requirement of law. to issue such single family
l_.'esidential mortgage revenue bonds for the purpose. in the mlnner
and upon the terms herein provided; and
WHEREAS. said single family residential mortgage revenue
bonds are to be issued hereunder in an aggreljlate principal lmount
not to exceed $36.000.000 for the purpose, amonljl others. of
providing moneys to purchase mortgage loans pursuant to the program
and are to be designated as the "City of Sin Bernardino, California.
Single
Family
Residential
Mortga;e
Revenue
Bonds
( GNAA
Mortga;e-Blcked Securities Program). Issue of 198~" (the "Bonds").
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HOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO, CALIFORNIA, DO HEREBY FIND, RESOLVE, DETEDtIIlE AND
ORDIR AS FOLLOWS:
Section 1.
The above recitals, and each of them, are
true and correct.
Section 2.
The Program complies with the Land Use
ilement and the Housing Element of the City's General Plan.
Section 3.
The City hereby and finds and determines
that the public purpose of increasing the supply of housing in the
e City will be furthered hereby, and this Resolution is being adopted
, pursuant to the powers granted by the Act.
Section 4.
The Rules and Regulations Establishing
Eligibility Criteria for Mortgagors and the Rules and aegulationll
EstabliShing criteria for Lenders in connection with the program in
the form presented at this meeting and on file with the City Clerk
are hereby approved and adopted for the program and tor mortgage
loans purchased with the proceeds of the Bonds.
Section 5.
pursuant to the Rules and Regulations
Establishing Elililil:lility Criteria for Mortgagors, the City hereby
establishes $32,750 as the Median Houllehold Income. Said Median
Household Income may be adjusted from time-to-t1me by the city.
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laction ~.
Based upon information available to the City
with respect to salas prices of new single family residences within
the
Riverside-San Bernardino-Ontario
standard
Metropolitan
Statistical Area, it is hereby determined that the -Aver'lIe Are.
Purchase Price - New" (within the meaning of that phrase set forth
in the form of Origination, Servicing and Administration Agreement
hereafter approved) for the one year period beginning August 1,
1985, is $117,100.
Section 7.
Baaed upon the information set forth in
Revenue Procedure 81-31, it is hereby found and determined that
there are no qualified census tracts (within the meaning of that
phrase set forth in Section l03A of the Internal Revenue Code of
(,
~.
1954, as amended) located within the area covered by the Program.
Section B.
First
Interst.te
Mortgage
Company
of
Colorado, or such other person as the Mayor and Common Council may
from time-to-time designate, is hereby designated to administer the
Program.
Section 9.
The
proposed
form
of
the
Developer
Allreements preliented to the City at this meet!nll, each of which is
dated as of December 1, 1985. by and amonll a Developer, the city and
the Trustee and on file with the City Clerk (the -Developer
AlIreementlS") are hereby approved: and the Mayor .nd the city Clerk
are hereby authorized and directed, for and in the name of the City,
to execute such Developer AlIreementlS with the Developers speciUed
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tberein. Sai~ Agreements shall b6 executed in sUbltantially t.he
form bereby approved, with such chllllil'U therein ;u. the officers
executing the same may approve prior to the issuance and delivery Of
the Bonds with tbe approval by the City Attorney and Bond Counsel of
any cbanges, amendments or modifications, and such approval to be
conclusively evidenced by the execution and delivery thereof.
Section 10.
The proposed form of the Origination,
Servicing and Administration Agreement presented at this meeHng,
d.ted as of December 1, 1985, by and among the City, the Trustee,
First Interstate Mortgage Company of Colorado, as lender (the
-Lender-) and the Pro'ilram Administrator and on file with the City
Clerk (the -Agreement-) is hereby approved: and the Mayor and the
"-_<:itY Clerk are hereby authorized and directed, for and in the name
and on behalf of the City, to execute the A'ilreement which meets the
criteria established in the Rules and ReQulations referred to
bereinabove. Said Agreement sball be executed in substantially the
form bereby approved, with such changes therein as the officers
executing the lame may approve with the approval thereof by the City
Attorney .nd Bond Counsel, sucb approval to be conclusively
evidenced by tbe execution and delivery thereof.
Section 11.
The City Staff together with the City
Attorney and Bond Counlel are hereby authorized and directeCS to
herewith ae1ect and designate a proljJram administrator to administer
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~he ProQum (the -prOQram Administrator-) II may be evidenced by a
sep.rate agreement with the City and/or by extension of the
OriQination, Servicing and Administration Agreement.
Section 12.
The Preliminary Official Statement relating
to the Bonds pre.ented at this meeting and on file with the City
Clerk is hereby approved in substantially the form presented with
such changes thereto as may be approved by the Director of HousinQ,
the City Attorney and Bond Counsel; and the distribution of such
Preliminary Official Statement is hereby authorized, and such
Preliminary Official Statement may be converted to a Final Official
Statement together with such changes or modifications .s deemed
desirable by the Executive Director. the City Attorney and Bond
~:;ounsel. The Mayor is hereby authorized to execute and deliver said
Pinal Official Statement, and the execution thereof Ihall be deemed
to be the final approval of same by the City.
,
Section 13.
Pursuant to the Act. the Bonds shall be sold
and issued as hereinafter provided in such aggregate principal
.
amount, not to exceed $36,000,000, as may be specified in the
Purch.se Contract hereinafter mentioned. The purposes for which the
proceeds of the Bonds shall be expended are for the deposit of a
portion of the Bond proceeOs with the Trustee for the establishment
.
of the necessary reserve fundi and the acquisition of mortQage loans
oriQinated by the ~ender on Developer Reserved Single Family
aesidences (as defined in the Developer Aoreements) pursuant to the
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~veloper Agreements and such other purposes IS are .et forth in the
proposed form of the Trust Indenture presented at this meeting,
dated as of December 1, 1985. by and between the City and the
Trustee and on file with the City Clerk (the -Indenture-).
Section 14.
The City Staff together with the City
Attorney and Bond Counsel are hereby authorized and directed to
herewith select and designate a commereial bank having appropriate
trust powers to serve as Trustee for the City and the owners of the
Bonds, with the duties and powers of such Trustee as set forth in
the Indenture.
Section 15. Said proposed form of the Indenture
,-,Jresented at this meeting, and on file with the City Clerk is hereby
approved; and the Mayor and the City Clerk are hereby authorized and
directed, for and in the name and on behalf of the City, to execute.
acknowledge and deliver to the Trustee the
Indenture in
substantially the form hereby approved, with such changes therein al
the officers executing the same may approve with the approval
thereof by the City Attorney and Bond Counsel (consistent with the
Purchase Contract approved pursuant to this aesolution), such
approval to be conclulively evidenced by the execution and delivery
thereof.
Section 16.
The form of the Bonds .IS let forth in the
Indenture (as the Indenture may be modified pursuant to the
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eceding Section hereof) is hereby approved. The Mayor and the
City Clerk are hereby authorized and directed to execute, for and in
the name and on behalf of the City and under its seal, such Sonds in
the aggregate not to exceed principal amount set forth hereinabove
in accordance with the Indenture.
Section 17.
The form of Purchase Contract presented at
this meeting, dated the date of execution thereof, by and between
the City and Miller' Schroeder Financial, Inc., as underwriter (the
"Underwriter") (the "Purchase Contract"), and on file with the City
Clerk and the sale of the Bonds pursuant thereto are hereby
approved, provided that the purchase price of the Bonds represents
an underwriter's discount not in exceS8 of three percent (3\) of the
\-.-rincip81 amount of the Bonds and at a rate or rates of interest
thereon to enable the City to purchue mott;a;e loans bearing an
interest rate not in excess of that rate set forth in the Developer
Agreements, and provided further that such purchase price anlS ute
or rates of interest shall have been approved by the Mayor or the
Executive Director; and, subject to such approval, the Mlyor or the
Executive Director are hereby authorized and directed to evilSence
the acceptance by the City of the offer made by said Purchase
Contract by executing and delivering said Purchase Contract in
substantially the form hereby approved. with such chanQes therein as
the officers executing the same may approve with the approval
thereof by the City Attotney and Bond Counsel, such approval to be
~onclu5ively evidenced by the execution Ind dellvery thereof.
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Section 18.
The Executive Director or the City Manager
are hereby authorized and directec:l to execute one or more
requisitions authorizing the Trustee under the aforesaid Indenture
to pay the Costs of Issuance <as defin.d in the Indenture) for the
BondS from the Funds established under and pursuant to the Indenture.
iection 19.
The offieen of the City are hereby
authorized and directed, jointly and severally, to do any and all
things to execute and deliver any anCS all documents, includin; the
Bonds, which they may Cleem necessary or advisable in order to
consummate the issuance, sale anCl delivery of the Bonds, anCl
otherwise to effectuate tbe purposes of this Resolution: and such
actions as previously taken by such officers are hereby ratified and
(....:onf i rmeCl.
Sec~ion 20.
The above-mentioneCl documents nec.llary for
the i..uance, sale and delivery of the Bondi shall contain langua;.
especiallY intended for the full and complete protection Of the city
against liability from any covenants at a;teements within the said
Bond documents to usure that, in any event, the bondholders shall
look only to the revenues pledged for the Bonds, and not to the
revenues or ;eneral funds Of the city unless specifically pled;ed in
other than a conc:luit financing. For this purpose, Bond Counsel
shall also include in all subsequent appropriate documents for the
type of bond issue being consiClered, lan~ua~e substantially as
followa:
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(
"Non-recourse paragraph:
The Issuer's obli;ations hereunOer are on a
'non-recourse' basis, and payment of any amounts
which are owed or may become Oue hereunOer shall
not be enforced a;ainst the Issuer or any of its
public officials, officers, employees. a;ents, or
other personnel, but only against the property
which is subject to the Deed of Trust, and any
further security which may, from time to time, be
hypothecateO for this Indenture."
"Exculpation of Issuer:
The Issuer will not be liable to any
bondholder, or to any other person for, and the
trustee, on behalf of the bondholders, hereby
release the Issuer from all liability to any
bondholder, or any other person, for 101..S,
costs, damages, expenses and l1abi li ties even if
such losses, costs, damages, expenses and
liabilities directly or indirectly result from,
arise out of or relate to, in whole or in part,
one or more negli;ent acts or omissions of the
Issuer or any of the officers, di rectors,
employees, agents, servants or any other party
acting for or on behalf of the Issuer in
connection with the issuance of the bonds or
performance by the Issuer of its obligations
under the indenture or any other agreement
related to the indenture. The Issuer's
obligations hereunder are on a 'non-recourse'
basis, and payment of any amounts which are owed
or may become due hereunder shall not be enforced
against the Issuer or any of its pUblic
officials, officers, employees, agents, and other
personnel, but only against the property which is
subject to the Deed of Trust and any other
further lecurity which may, from time to time, be
hypothecated hereunder."
AI appropriate, the language shall be changed if the
security is something other than a deed of trust, and if the
Oocuments being utilized are other than a loan agreement and
regulatory agreement. Notice of non-recourse and exculpation of the
iSluer provisions shall be prominently included in any official
statement or other equivalent disclosure documents,
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Section 21.
This Resolution shall take effect upon
.adoption.
I HEREBY CERTIFY that the foregoing
sdopted by the Mayor and Common Council
San Bernardino at a
held on the day of
the following vote, to wit:
resolution Will duly
of the City of
meeting thereof,
, 1985, by
AYES:
Council Members
NAYS:
ABSENT:
Clty Clerk
l...y of
The foregoing resolution is hereby approved this
, 1985.
Mayor of the City of
San Bernardino
Approved as to form:
A~~
~C y Attorney
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STATE OF CALIFORNIA )
COUNTY OF SAN BERRARDINO) ss.
CITY OF SAN BERNARDINO )
I, SHAUNA CLARK, City Clerk in an~ for the City of
San Bernardino, DO HEREBY CERTIFY that the foregoing and attached
copy of San Bernardino City Resolution No. is a full,
true and correct copy of that now on file in this office.
IN WITNESS WHEREOF, I have hereunto set my hand
the official seal of the City of San Bernardino this
, 1985.
and .ffized
day of
City Clerk
<l
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SBE068-5(2,232)/1246S/jm
11/21/85
THE CITY OF SAN BERNARDINO, CALIFORNIA HOME
MORTGAGE FINANCING PROGRAM RULES AND REGULATIONS
ESTABLISHING ELIGIBILITY CRITERIA FOR MORTGAGORS
PREFACE
These Rules and Regulations are made pursuant to
Section 52000, et seq., of the Health and Safety Code of the State
of California and related to the Home Mortgage Finance Program of
the City of San Bernardino, California (the "City") of purchasing
loans, made to qualified persons and families, from qualified
Lenders (as hereinafter defined). In order to be eligible to become
a mortgagor under this program, a person or family must comply with
the criteria set forth in these Rules and Regulations.
In developing the criteria, the City has considered factors
such as the amount of personal or family income available for
housing needs, household size, costs and conditions of available
housing, and eligibility of potential mortgagors for federal housing
assistance.
Section 1. Definitions. Unless the context otherwise
requires, the terms defined in this section shall for all purposes
of these Rules and Regulations have the meanings herein specified,
to be equally applicable to both the singular and plural forms of
any of the terms herein defined. Unless otherwise defined, all
terms used in these Rules and Regulations shall have the meanings
assigned to such terms in the Act.
"Act" means Section 52000, et seq., of the Health and
Safety Code of the State of California, as now in effect and as it
may from time to time hereafter be amended or supplemented.
"Bonds" means the City of San Bernardino, California,
Single Family Residential Mortgage Revenue Bonds (GNMA
Mortgage-Backed Securities Program), Issue of 1985, in the
approximate principal amount of $36,000,000 authorized by, and at
any time outstanding pursuant to, the Resolution.
"City" means the City of San Bernardino, California.
"Code" means the Internal Revenue Code of 1954, as amended,
and all regulations and rulings promulgated thereunder.
"Existing Residence" means a Residence which has been
previously occupied.
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"Home Mortgage" means a loan evidenced by a note secured by
a first lien deed of trust with respect to a Residence or Existing
Residence which meets all the requirements of the Program and which
has been or is expected to be purchased by the Trustee on behalf of
the City from a Lender pursuant to the Program.
"Lender" means First Interstate Mortgage Company of
Colorado or any bank, trust company, savings bank, national banking
association, savings and loan association, building and loan
association, mortgage banker, or other financial institution or
governmental agency which customarily provides service or otherwise
aids in the financing of home mortgages, or any holding company for
any of the foregoing, which is a qualified lending institution under
the eligibility criteria for lending institutions established for
the Program.
"Mortgage Insurer" means a
mortgage insurance, and approved by
insurance under the Program.
Person qualified to issue
the City to issue mortgage
"Mortgagor" means the maker of, and any other party
obligated on, a note in connection with the acquisition of a
Residence through the borrowing of money pursuant to a Home Mortgage
and shall also include, where appropriate, a subsequent purchaser of
a Residence who purchases such Residence subject to the related Home
Mortgage and who meets the applicable requirements of the Code, the
Act, these Rules and Regulations, the Indenture and Program.
"Person" means any individual, partnership, co-partnership,
firm, company, corporation, lending institution, association, joint
stock company, trust, estate, political subdivision, state agency or
any other legal entity, or its legal representatives, agents or
assigns.
"Program" means the City's 1985 program of purchasing Home
Mortgages pursuant to the Resolution, the Act, the Indenture, the
Origination, Servicing and Administration Agreement, these Rules and
Regulations, and all other rules and regulations adopted pursuant to
the Act with respect to the purchase of Home Mortgages pursuant to
the Resolution.
"Residence" means real property and improvements thereon
consisting of a single family detached or attached (condominium,
rowhouse, townhouse) residential unit (other than a mobilehome)
located wi thin the Ci ty and is a res idence in a proj ect which has
been approved by the City as set forth in the Developer Agreements
or is an Existing Residence for which a Home Mortgage will be
originated and attributable to the Lender Allocation and which can
reasonably be expected to become the principal residence of a
Mortgagor within sixty (GO) days after the execution of the
applicable Home Mortgage has been made to such Mortgagor, for a
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period of at least two (2) years and which otherwise complies with
the requirements of the Program.
"Resolution" means the resolution of the City providing for
the issuance of the Bonds, as the same wi 11 be adopted by the ci ty
under the Act or as it may from time to time thereafter be
supplemented, modified or amended by any supplemental resolution in
accordance with the terms and provisions hereof designating a bank
to act as Trustee thereunder.
"Rules and Regulations" means these rules and regulations
establishing eligibility criteria for Mortgagors adopted by the
City, as they may be supplemented or amended from time to time.
Section 2. Eligibility Criteria for Mortgagors.
or Persons that complies with the following criteria is
the City to be a person or family eligible to become a
under the Program.
A Person
deemed by
Mortgagor
(A) Each Mortgagor shall submit an affidavit stating his
or her: (i) intention to occupy the Residence as his or her
principal place of residence within sixty (60) days and for a
minimum of two (2) years after the Home Mortgage has been made; (ii)
promise not to permit the Residence to be used in a trade or
business; and (iii) income as meeting the requirements of these
Rules and Regulations.
(B) The Mortgagor shall meet credit standards established
by the City, the Lenders and the Mortgage Insurer as the case may be.
Section 3. Assumption of Home Mortgages. Any Home
Mortgage may be assumed upon the Mortgagor's sale, transfer or other
disposition of the Residence provided that the purchaser of such
Residence is an eligible Mortgagor under the Program and provided
further that the sale, transfer or other disposition conforms in all
respects with the requirements of the Program, the Act and the Code.
Section 4. Miscellaneous.
(A) Waiver. To the extent permitted by the Act, the City
shall have the right to waive any rule or regulation herein
contained, and any failure on the part of the City to enforce any
rule or regulation herein shall not affect the validity of any
contract entered into between the City and a Lender pursuant to the
applicable requirements of the Code, the Act and the Program.
(B) Governing Law.
construction of these Rules and
laws of the State of California.
All questions with respect to the
RegUlations shall be governed by the
(C) Section Headings. The headings of the several
sections of these Rules and- Regulations, and any table of contents
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appended hereto, shall be solely for convenience of reference and
shall not affect the meaning, construction or effect hereof.
(D) Severability. If anyone or more of the provisions
contained in these Rules and Regulations shall for any reason be
held to be invalid, illegal or unenforceable in any respect, then
such provision or provisions shall be deemed severable from the
remaining provisions hereof and such invalidity, illegality or
enforceability shall not affect any other provision hereof, and
these Rules and Regulations shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
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SBE 068-7(2,232)/1248S/jm
11/21/85
THE CITY OF SAN BERNARDINO, CALIFORNIA, HOME
MORTGAGE FINANCE PROGRAM RULES AND REGULATIONS
ESTABLISHING ELIGIBILITY CRITERIA FOR LENDERS
These Rules and Regulations are made pursuant to
Section 52000, et seq., of the Health and Safety Code of the State
of California and related to the Home Mortgage Finance Program of
the City of San Bernardino, California (the "City"), of purchasing
home mortgages, made to qualified persons and families, from
qualified Lenders, as hereinafter defined. In order to eligible to
originate and service home mortgages under this program, a lender
must comply with the criteria set forth in these Rules and
Regulations.
Section 1. Definitions. Unless the context otherwi se
requires, the terms defined in this section shall for all purposes
of these Rules and Regulations have the meanings herein specified,
to be equally applicable to both the singular and plural forms of
any of the terms herein defined. Unless otherwise defined, all
terms used in these Rules and Regulations shall have the meanings
assigned to such terms in the Act.
"Act" means Section 52000, et seq., of the Health and
Safety Code of the state of Ca 1 i fo rni a, as now in effect and as it
may from time to time hereafter be amended or supplemented.
"Bonds" means the City of San Bernardino, California,
Single Family Residential Mortgage Revenue Bonds (GNMA
Mortgage-Backed Securities Program), Issue of 1985, in the
approximate pr incipa 1 amount of $36,000,000 authorized by, and at
any time outstanding pursuant to, the Resolution.
"City" means the City of San Bernardino, California.
"Developer Fee" means the non-refundable fee paid or to be
paid to the City by each developer pursuant to a certain developer
agreement and by the Lender and/or the City with respect to the
origination of Home Mortgages for Existing Residences.
"Existing Residence" means a Residence which has been
previously occupied.
"Home Mortgage" means an obligation of
evidenced by a note and secured by a first lien deed
respect to a Residence or Existing Residence which
requirements of the Program and which has been or is
purchased by the Trustee on behalf of the City
pursuant to the Program.
a Mortgagor
of trust with
meets a 11 the
expected to be
from a lender
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"Lender" means any bank, trust company, savings bank,
national banking association, savings and loan association, building
and loan association, mortgage banker, or other financial
institution or governmental agency which customarily provides
service or otherwise aids in the financing of home mortgages, or any
holding company for any of the foregoing, which is a qualified
lending institution under the eligibility criteria for lending
institutions established for the Program.
"Lender Allocation" means the aggregate principal amount of
Home Mortgages to be originated with respect to Existing Residences
for which a Lender has paid a Developer Fee.
"Mortgagor" means the maker of, and any other party
obligated on, a note in connection with the acquisition of a
Residence through the borrowing of money pursuant to a Home Mortgage
and shall also include, where appropriate, a subsequent purchaser of
a Residence who purchased such Residence subject to the related Home
Mortgage and who meets the requirements of the Code, the Act, these
Rules and Regulations, the Indenture and the Program.
"Origination, Servicing and Administration Agreement" means
an agreement entered into by the City with the Trustee and a
qualified lending institution for the sale and servicing of loans.
"Person" means any individual, partnership, copartnership,
firm, company, corporation, lending institution, association, joint
stock company, trust, estate, political subdivision, state agency or
any other legal entity, or its legal representatives, agents or
assigns.
"Program" means the City's 1985 program of purchasing Home
Mortgages pursuant to the Resolution, the Act, the Indenture, the
Origination, Servicing and Administration Agreements, these Rules
and Regulations, and all other rules and regulations adopted
pursuant to the Act with respect to the purchase of Home Mortgages
pursuant to the Resolution.
"Res idence" means rea 1 property, and improvements thereon
consisting of a single-family detached or attached (condominium,
rowhouse, townhouse) residential unit (but not including a mobile
home, that is a residence transportable in one or more sections
built on a chassis which is not designed or intended to be
permanently affixed to the ground), located within the City and is a
residence in a project which has been approved by the City as set
forth in the Developer Agreements or is an Existing Residence for
which a Home Mortgage will be originated and attributable to the
Lender Allocation and which can reasonably be expected to become the
principal residence of a Mortgagor within a reasonable period of
time (not to exceed sixty (60) days) after the execution of the
applicable Home Mortgage is made to such Mortgagor for a period of
at least two (2) years.
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"Resolution" means the resolution of the issuance to be
adopted by the City designating the Trustee and providing for the
issuance of the Bonds, as the same will be adopted by the City under
the Act or as it may from time to time thereafter be supplemented,
modified or amended by any supplemental resolution in accordance
with the terms and provisions thereof.
"Trustee" means the trustee appointed by the City pursuant
to the Resolution, or its successor.
Section 2. Eliqibility Criteria for Lenders. In order to
be eligible to originate and service Home Mortgages under the
Program, a Lender shall comply with the following criteria:
(A) The Lender shall be authorized to do business in the
State of California and shall have full legal authority to originate
and service Home Mortgages under the Program.
(B) The Lender shall be approved by the Government
National Mortgage Association ("GNMA") to sell and service the type
of Home Mortgages to be financed by the Trustee under the Program
and is an FHA/VA-approved Mortgagee, and it meets all of the issuer
eligibility requirements of (including net worth requirements) and
is approved by GNMA to issue mortgage-backed securi ties guaranteed
by GNMA pursuant to Section 306(g) of Title III of the National
Housing Act and applicable regulations thereunder.
(C) The Lender shall have a combined capital and surplus
of at least five hundred thousand dollars ($500,000).
(D) The Lender's delinquency ratios for all mortgage loan
contracts of sixty (60) days or more shall not exceed the average as
reported by the San Francisco Federal Home Loan Bank Board.
(E) The Lender shall be one which transacts business in
the City (other than in connection with the Program).
(F) Home Mortgages processing fees proposed by the Lender
shall not exceed:
(a) for loan application processing of each Mortgagor:
not more than an amount in connection with each loan it
processes as shall be set forth in the applicable Program
documents, which fee shall be credited against the fees and
charges hereinafter described;
(b) for Home Mortgage Origination: as shall be further
set forth in the applicable Program documents, a percentage of
the original principal amount of the Home Mortgage plus an
amount not to exceed charges for any costs paid or incurred by
the Lender in connection with the making of a Home Mortgage, but
only to the extent that such charges do not exceed those charged
in connection with the origination of loans not financed through
qualified mortgage bonds within the meaning of the Internal
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Revenue Code of 1954, as amended (the "Code"), including, ...but
not limited to the actual costs for a credit report, a .Survey,
an appraisal, abstract and attorneys' fees, and similrt charges
relating to origination; I ,~
(c) for Horne Mortgage servicing: a monthly f~e as (~ha 11
be determined by the applicable Program document~' ~'each
issuance of Bonds and calculated on a monthly ba is on the
outstanding principal amount of each Mortgage Pool as f the/day
preceding the last day on which a scheduled payment on t.he-/Home
Mortgage was due; and
(d) for charges for any costs of the following items paid
or incurred by the Lender in connection with the making of a
Horne Mortgage: haza rd insurance premiums (to the extent not
previously paid, as in the case of a condominium development
where payment may be made by a homeowners association), premiums
for a Policy of Title Insurance, premiums for the FHA mortgage
insurance or the VA mortgage guaranty (to the extent this is not
paid from proceeds of the Horne Mortgage), whichever is
applicable, appraisal fees, abstract and attorneys' fees,
recording or registration charges, notary fees, escrow fees,
costs of credit reports, costs of termite reports and similar
settlement or financing costs, but only to the extent that such
charges do not exceed those charged in the area in connection
with the origination of loans not financed through qualified
mortgage bonds within the meaning of the Code and are approved
by FHA, VA and GNMA.
(G)
Origination,
presented by
The Lender
Servicing and
the City.
shall be willing to
Administration Agreement
execute
in the
the
form
(H) The Lender shall be willing to service the Horne
Mortgages it originates.
Section 3. Criteria for Selection of Lenders. Lenders
shall be selected to participate in the Program on the basis of the
mlnlmum standards set forth in Section 2 of these Rules and
Regulations and on the basis of (i) demonstrated ability to process
the origination and servicing of conventional single family mortgage
loans, (ii) selection by one or more developers participating in the
Program, and (iii) ultimate acceptability to the underwriters of the
Bonds.
Section 4. Miscellaneous.
(A) Waiver. The Ci ty shall have the right to waive any
rule or regulation herein contained, and any failure on the part of
the City to enforce any rule or regulation herein shall not affect
the validity of any contract entered into between the City and a
Lender pursuant to the applicable requirements ot the Code, the Act
and the Program.
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(B) Governinq Law. All questions with respect to the
construction of these Rules and Regulations shall be governed by the
laws of the State of California.
(C) Section Headinqs. The headings of the several
sections of these Rules and Regulations, and any table of contents
appended hereto, shall be solely for convenience of reference and
shall not affect the meaning, construction or effect hereof.
(D) Severabi li ty. If anyone or more of the provisions
contained in these Rules and Regulations shall for any reason be
held to be invalid, illegal or unenforceable in any respect, then
such provision or provisions shall be deemed severable from the
remaining provisions hereof and such invalidity, illegality or
enforceability shall not affect any other provision hereof, and
these Rules and Regulations shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
.
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