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HomeMy WebLinkAboutReso 1976-8034Form No. 342 Revs 3%74 RESOLUTION NO. 8034 RESOLUTION OF THE CITY COUNCIL OF THE CITY Or' CHULA VISTA, APPROVING AGREEMENT BETWEEN THE CI°I'Y OF CHULA VISTA AND BALBOA BANK FOR SERVICES RELATIVE TO THE CITY'S COMMUNITY HOUSING IMPROVEMENT PROGRAM AND AUTHORIZING THE MAYOR TO EXECUTE SAID AGREEMENT The City Council of the City of Chula Vista does hereby resolve as follows: NOW, THEREFORE, BE I"T RESOLVED that that certain agreemt~nt between THE CITY OF CHULA VISTA, a municipal corporation, and BALBOA BANK, a California corporation, for services relative to the City's Community Housing Improvement Program dated the 3rd day of February , 19~r, a copy of which is attached hereto and incorporated herein, the same as though fully set forth herein be, and the same is hereby approveds BE I.T .FURTHER RESOLVED that the Mayor of the City of Chula Vista be, and he is hereby authorized and directed to execute said agreement for and on behalf of the City of Chula V~sta_ Pr e sevlted Approved as to form by _. E ~~ , -•- ' ~ .' . 7 - _ ? -~,1_,~ J ~. . Paul Desroc ers, Director of Geor,~e D. Lindberg, City At,~p'rney Community Development ADOPTED AND i~PPROVED by the CITY COUNCIL of the CITY OF' CHULA VISTA, CALLFORNIA, this 27th day of January 1976 , by the following vote, to-wit: AYES: Councilmen Scott, Hobel, Hamilton, Hyde, Egdahl NAPES: Councilmen None ABS AT'I STATE OF CALIFORNLA) COUNTY OF SAN DIEGO) ss, CITY OF CHULA VISTA) I, , City Clerk of the C~r_.y of Chula Vista, California, DO fiEREBY CERTIFY that the abode is a ru]_1, true and correct copy of Resolut~.on No. , and that the same ras not been amended or .repealed. DATED_ _ City Cler MASTER LOAN AGREEMENT ' THIS AGREEMENT is made by and between THE CITY OF CHULA VISTA, a California municipal corporation, hereinafter referred to as "City," and the BALBOA BANK, a California corporation, hereinafter sometimes referred to as "Bank" or "Lender." WHEREAS, the City Council of the City has determined to carry out a Community Housing Improvement Program pursuant to Title I (Block Grant Program) of the Housing and Community Development Act of 1974; and, WHEREAS, said City Council has determined that an effective method for improving or maintaining the quality of housing within the City is to sponsor a loan guarantee program to assist persons who would not otherwise be able to do so obtain home improvement loans; and, WHEREAS, the Bank is ready, willing and able to assist the City in meeting the objectives of said program; and, WHEREAS, the parties intend for the Bank to make and the City to guarantee certain home improvement loans pursuant to the Housing and Community Development Act of 1974. NOW THEREFORE, the parties agree as follows: 1. Deposit of Guaranty Funds. City shall, from time to time, deposit with Bank money which shall be used to guarantee the loans made by the Lender pursuant to this agreement. Bank shall not pay interest on said deposits by City. 2. Loans by Bank. The Lender shall make home improvement loans which shall be one hundred percent (100%) guaranteed by the funds deposited by City. Bank shall not charge the borrower in excess of six percent (6%) annual percentage rate for such loans. 3. Application for Guaranty. This agreement shall cover only loans duly approved hereafter for guaranty by Lender and City subject to such rules, regulations and policies established by City. Any loan approved by Lender contingent upon City's guaranty under this agreement shall be referred to City for authorization upon the separate applications of Lender and the loan applicant. -1- 8. Administration of Loans. Lender shall hold the Loan Instruments, and shall receive all payments of principal and interest until transfer of the note to City. Lender shall no;t, without prior written consent of the City: (a) purchase insu~,rance with respect to any collateral; (b) make or consent to any transfer or assignment of any note or interest therein, or any alteration in the terms of any Loan Instrument; (c) make or consent to any release, conveyance, substitution or exchange of any collater 1; (d) accelerate the maturity of any note; (e) sue upon any Loa Instrument; or (f) waive any claim against any borrower, guar- antor or other obligor, or standby creditor arising out of any Loan Instrument. All other servicing action shall be the responsibility of the Lender who shall follow accepted standards of loan servicing employed by prudent lenders generally. 9. Notice of Borrower's Default; Demand for Purchase'I. Lender shall notify City in writing within 20 days of any unc red default by a borrower in making payment when due of any install- ment of principal or interest on any note. If such default c n- tinues uncured for 90 days (or less, if City agrees), and if Lender shall have duly notified City of the default, Lender y demand in writing that City purchase the guaranteed loan. 10. Purchase by City. By making written demand that City purchase a loan, Lender shall be deemed thereby to certify that the loan has been disbursed and serviced in compliance with this agreement and that this agreement remains in full force nd effect with respect to the loan. Fifteen (15) days after delivery of Lender's demand and transcript of account to City, Lender shall be entitled to draw upon the balance deposited by City for the outstanding principal balance of the loan, adjusted for other charges, and interest approved by City, and Lender shall assign, transfer and deliver to City the Loan Instruments without recourse. If City consents, the Lender may continue administration of the loan after City purchases a loan, upon such terms and conditions as the Lender and City may at such time agree. Purchase by City shall not waive any right of City arising from Lender's negligence, misconduct or violation of any provision of this agreement. -3- ' ~ 4. Approval.of Guaranty. City, through its loan review committee, sha 11 either authorize the guaranty or decline it, by written notice to the Lender. Any change in the terms or con- ditions stated in the loan authorization sha 11 be subj ec t to '~ prior written approval by City Loan review committee. 5. Closing and Disbursement of Loans. Lender shall) close and disburse each loan in accordance with the terms and) conditions of the approved loan authorization. Lender shalll~l cause to be executed a note and all additional instruments and take such other actions which shall, consistent with pruden t closing practices, be required in order full~y~to protect or pre- . serve the interests of Lender and City in the Loan. Immediatl ly after the first disbursement of each loan, Lender shall furnish City with a copy of the executed note and settlement sheet. ity shall be entitled at any time to examine and obtain copies of all notes, security agreements, instruments of hypothecation, all other agreements and documents (herein collectively calle "Loan Instruments"), and the loan repayment ledger held by Le der which relate to loans made pursuant to this agreement. _ I- 6. Report of Disbursement and Repayment. Within 3 d ys after making each disbursement on account of any loan, Lender shall advise City in writing of the date and amount of disbur e- ment. By the 10th day of June and December, Lender shall fur ish to City a report on all loans outstanding as of the preceding May 3L or November 30. 7. Excess Guaranty Deposits. Upon receiving the rep its described in Section 6 of this Agreement, City shall have the option to either (a) withdraw the deposited funds which excee the aggregate unrepaid principal balance of the loans made pu suant to this Agreement or to, (b) permit said excess guaranty funds to remain on deposit with Bank as a guaranty for additional home improvement loans. -2- 11. Fees. or Commissions. Lender shall not directly or indirectly charge or receive any bonus, fee, commission 'or other payment or benefit in connection with making or servicing any, loan, except reimbursement for charges or expenses necessarily incurrred or compensation for actual service rendered as approved by City. 12. Sharing of Repayment Proceeds and Collateral. All,1 repayments, security or guaranty of any nature, including with- out limitation rights of setoff and counterclaim, which Lendeir or City jointly or severally may at any time receive or have I~n any guaranteed loan, shall repay and secure the interests of ', Lender and City in the same proportion as their interests may be in the unpaid balance of the loan. !, 13. Payment of Expenses. A11 ordinary expense of making, servicing, and liquidating a guaranteed loan shall be paid by~l, or be recoverable from the borrower. All reasonable expensesl~l incurred by Lender or City which are not recoverable from thel borrower shall be shared by Lender and City equally. II 14. City Purchase Privilege. Notwithstanding any prod vision of any agreement between City and Lender, City has then absolute right at any time to purchase any loan. Upon writte demand by City, Lender shall, within 5 days, furnish a certif'ed transcript of account showing date and amount of each advance'~lor disbursement and repayment. Within 15 days after receipt of '',the transcript of account, City shall either pay to lender the amount then owing on the loan or authorize Lender to withdraw such amount from City's deposit, and Lender shall simultaneously, assign,ll, transfer and deliver the related Instruments to City as stated in paragraph 10 above. City shall pay accrued interest to a date not later than 20 days after its demand at the rate stated in paragraph 10 above. ~~, 15. Assignment of Interest in Loan. Neither party sh~11 voluntarily assign, in whole or part, its rights or obligatiops under this agreement without prior written consent of the other party. Nothing in this agreement prohibits Lender's use of any guaranteed loan as security for Treasury Tax and Loan Accounts (Treasury Department Circular 92) or as security for the deposit of public funds. -4- 13: Termination. a. Either party may terminate this agreement upon not less than 10 days written notice by certified mail to the, other party. Termination shall not affect the guaranty of an~ loan previously authorized by City. This subparagraph is not' applicable where this agreement applies only to one designated I borrower, j b. Lender may terminate the guaranty as to any loan guaranteed hereunder at any time prior to purchase by Ci~y upon notice to City. The guaranty of any loan shall be terminated if demand for City to purchase is not received by City withinl60 days after the stated maturity of the note. I'i This agreement shall inure to the benefit of, and be binding upon the parties, their successors and assigns. IN WITNESS WHEREOF, Lender and City have caused this agreement to be duly executed this 3 day of THE CITY OF CHULA VISTA Mayor o,~,~the City of Chula Vist ATTE City C2er Approved as to form by y Attorney ~~ BALBOA BANK B ~' z Y ROBERT D. BARRICK Executive Vice Presi 1976. nt -S-