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HomeMy WebLinkAboutReso 1982-10841 RESOLUTION NO. 10841 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA TERMINATING AN AGREEMENT WITH CROCKER NATIONAL BANK, AND AMENDING AN AGREEMENT WITH BANK OF AMERCIA The City Council of the City of Chula Vista does hereby resolve as follows: WHEREAS, the City's Housing Rehabilitation (CHIP) pro-. gram currently utilizes two banks for the purpose of originating and servicing loans, Bank of America and Crocker National Bank; and, WHEREAS, the large number of checking and savings accounts needed to manage the CHIP program could be halved by dealing with only one bank rather than two, thus saving administrative and accounting time; and, WHEREAS, the Bank of America offers collateralized loans which result in greater long-term leverage, which are not available at Crocker National Bank, and the Bank of America is currently charging 3/4% less for its loans; and, WHEREAS, the Bank of America is now offering to make loans for mobilehomes and trailers, as evidenced by an agreement entitled "Amendment to Property Rehabilitation Loan Agreement Com- prehensive Form" which is attached hereto. NOW, THEREFORE BE IT RESOLVED that the Agreement with Crocker National Bank for housing rehabilitation services, dated August 15, 1978 is hereby terminated effective May 16,1982, and the attached agreement with the Bank of America for the provision of loans for mobilehomes is hereby approved and the Mayor is authorized to sign. Approved ~s to form by ~ Pl. D ro , oR~unity Development Director George D. Lindberg, City Attorney AMENDMENT TO PROPERTY REHABILITATION LOAN AGREEMENT COMPREHENSIVE FORM THIS AMENDMENT is made by the City of CHULA VISTA, a municipal corporation in the State of California (herein called "Au- thority") and BANK OF AMERICA NATIONAl TRUST AND SAVINGS ASSOCIATION, a national banking association (herein called "Bank"). R Eel TAL S A. Authority and Bank, on September 15, 1981, entered into a Real Property Rehabilitation Program, pursuant to which Bank is making below-market interest rate Commercial and Residential Property Rehabili- tat ion loans ("Loans" or "Program Loans") to certain owners and/or oc- cupants of real property within Authority's target area and approved by Authority as recipients of Loans ("Applicants"). B. Bank proposes to consider making personal property (mobile home) improvement loans to certain owners of residential personal property approved by Authority as recipients of loans (Applicants). Bank wishes to amend the Loan Agreement to provide the terms herein agreed to. NOW, THEREFORE, for and in consideration of the foregoing and the mutual agreements made herein, and for other good and valuable consider- ation, Authority and Bank agree as follows: 1. Part Seven, paragraphs 39 through 45 are added to the Property Rehabilitation Loan Agreement as follows: ]l<-/o ?~ / PMT SEnN 'PERSONAL PROPERTY (MOBILE HOME) COLLATERALIZED LOANS 39. Each Loan shall be a Collateralized Loan and shall be supported by a noninterest-bearing deposit made by Authority to a Col- lateralized Loan Account. The account shall, at all times, be equal to at least: A. 100% of unpaid principal for each 5.00% Loan for which Bank has not designated the Applicant as a party to whom Bank is willing to make a (partially) Collateralized Loan; B. 55% of unpaid principal for each 10.00% Loan. Authority hereby assigns the Collateralized Loan Accounts to secure the Collateralized Loans. 40. The term of the installment note shall be determined by Bank for the Loan in questions, but may not exceed fifteen (15) years, and the installment note shall be amortized in equal monthly installments over its term. Interest will be calculated on a simple interest basis for each installment note. If Bank is unable to establish a market value, Bank, at its election, may charge an appraisal fee. 41. With respect to personal property Collateralized Loans: a) The installment note, interest and other finance charges shall be such as to bear interest at an annual rate of 5.00% or 10.00% which shall be calculated on a simple interest basis. b) The Loan shall be documented using Bank's standard forms. ~~~ -2- , c) The installment note may, at Bank's option, be secured by an interest covering the personal property (mobile home) that is the subject of the rehabilitation for which the proceeds of the Loan are to be used. (1) Bank must receive a "State of California, Department of Housing and Community Develop- ment Certificate of Title, Mobile Home" for all 10.00% Loans; the Certificate must show the Bank as the first lien holder of record. (2) Bank must receive a "State of California, Department of Housing. and Community Develop- ment Certificate of Title, MobileHome" or a California Department of Motor Vehicle owner- ship certificate (pink slip) for all 5.00% Loans. At Authority's request, 5.00% Loans may be made without security. d) Personal property Collateralized Loans shall not exceed $10,000 (Ten Thousand and no/lOO Dollars). 42. Authority shall make a relevant deposit to the Collateralized Loan Accounts in the percentage of Loan amount provided for at paragraph 39 when installment note and security instrument are signed by Applicant. At the end of each calendar month ending 180 days after Authority's first de- posit hereunder, Bank shall pay to Warehouse Account the amount by which 1P-/OfJ// -3- the Collateralized Loan Account exceeds the paragraph 39 percentage of the unpaid balances of Collateralized Loans. 43. If a Collateralized Loan remains in default for a continu- ous period of ninety (90) days on account of nonpayment of any sum of money due pursuant to the terms thereof or of any instrument or document related thereto, Bank may withdraw from the Collateralized Loan Account and pay to itself, an amount equal to the then outstanding principal balance of the Loan, multiplied by the same percentage as the percentage of the Loan amount that was deposited to the Collateralized Loan Account pursuant to paragraph 39 plus; a) 100% of accrued unpaid interest on the Loan through the 90th day of default; and b) 100% of any costs paid by Bank, at its election, in an effort to protect the value of personal property securing a Pro- gram Lo~n; Bank shall have no recourse against Authority or the Collateralized Loan Account for any amounts in excess of those per- mitted under this paragraph. During any ninety (90) day default period, Bank shall perform its customary collection procedures with respect to the Loan. 44. After a withdrawal from the Collateralized Loan Account under paragraph 43 above, in the case of a Loan for which the deposit to the Collateralized Loan Account was less than 100% of the Loan amount: a) Bank need not assign the Certificate of Title, Mobile Home to Authority upon completion of the withdrawal but may,for its own account, exercise rights under the Certificate of Title, Mobile 1P-/t!~1 -4- Home to recover the outstanding and unpaid principal of the Loan plus accrued unpaid interest and expenses thereon after the 90th day of default. b) At its election, Bank may assign to Authority such rights as may be necessary for Authority to attempt to recoup any funds withdrawn from the Collateralized Loan Account in con- nection with any Loan default. Authority agrees to recoup funds, as much as possible, for the benefit of Bank as well as itself. Funds recovered shall be credited as follows: 1. To withdraw from the Collateralized Loan Account; 2. To the costs of recovery; 3. To Bank's Loan charge-off. c) If Bank subsequently recovers funds with respect to a defaulted Loan (as, for example, but without limitation, if a voluntary sale of the property takes place), Bank shall, after de- ducting the previously unreimbursed ?ercentage of Loan loss to which Bank is entitled, plus Bank's cost of recovery, pay to Warehouse Account all amounts in excess thereof. 45. After a withdrawal from the Collateralized Loan Account under paragraph 43 above, when a Loan for the deposit to the Collater- alized Loan Account was 100% of the Loan amount, Bank shall assign the Loan, if possible, to Authority, the assignment to be accomplished by: 1. The due endorsement by Bank to Authority of the promis- sory note evidencing the Loan, witho~ recourse or warranty; and [-IOf4/ -5- 2. The delivery of the promissory note and the assign- ment and delivery of the ownership certificate or Certificate of Title, Mobile Home. 46. Bank and Authority recognize the major changes affecting residential personal property caused by recent changes to the health and safety code, and by recent promulgation of mobile home regulations by the State of California. Bank therefore makes no warranties, expressed or implied, about the effectiveness or value of security agreements or documents covering residential personal property. 47. Collateralized Loans, as described in Part Seven are to be included in the average Loan size requirements described in para- graph 18. IN WITNESS WHEREOF, this Amendment is executed by Authority act- ing by and through its City Council pursuant to Resolution No. 10841 authorizing such execution, and by Bank. Dated this 20th day of April 1982. CITY OF BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION , ) \ , ^ .,,~'".''' / James S', 0 nr'~_':'j Title Assistant vfte President-Loans City Impro;tent and Restor- I. P ..at~on rQ.gr m By Title Mayor of City of Chu1a Vista APPROVED AS TO FORM: Attached is a true and correct copy of the original Resolution: ~~e1;)(!ifd#"'f City Clerk rv;/ (Y\,;{(') ~~v J6,/'.._-~~''->~-~~..~' City ~orney . ~ -,.,,-'. (;,/ f( -/tIf.L/1 -6- CHULA VISTA, CALIFORNIA, this 19 82 . by the following vote, to_it: ADOPTED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF 20th day of April AYES: NAYES: ABSTAIN: ABSENT: Councilmen Scott, Cox, Gi110w, Moore, McCand1iss Councilmen None Councilmen None Councilmen None M ATTf>>rn;" 1?zGt, t'~../;%/ City C erk t4 the City of Chura Vista STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) ss. CITY OF CHULA VISTA ) I, JENNIE M. FULASZ, CMC, CITY CLERK of the City of Chula Vista, California, DO HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 10841 ,and that the same has not been amended or repealed. DATED (seal) City Clerk If - /O]"'4j CC-660