HomeMy WebLinkAboutReso 1976-84031
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RESOLUTION N0. 8403
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA, APPROVING AGREEMENT BETWEEN THE CITY
OF CHULA VISTA AND BANK OF AMERICA 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 IT RESOLVED that that certain agreement
between THE CITY OF CHULA VISTA, a municipal corporation, and BANK OF
AMERICA, a California corporation, for services relative to the City's
Community Housing Improvement Program
dated 9th day of November 1976, a copy of which is
attach ereto and incorporate erein, the same as though fully set
forth herein be, and the same is hereby approved.
BE IT 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 Vista.
Presented b
6~~
Paul G, s c ers, Director
of Community Development
Approved as to form by
~'~~
~~~
~/ V ,
G rge D. Lindberg,
City Attorney
ADOPTED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF
CHULA VISTA, CALIFORNIA, this 9th day of November
197 6 by the following vote, to-wit:
AYES Councilmen Egdahl, Hobel, Hyde, Cox, Hamilton
NAYES~
Councilmen None
ABSTAIN: Councilmen None
ABSENT:
Councilmen None
~.~~
Mayor of the City of Chula Vista
,(.~ •.
ATTEST
Deputy City Clerk
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
DATED
(seal)
,and that the same has not been amended or repealed.
City Clerk
CC-660
_.. J~='~~.~
PROPERTY REHAF3ILTTt~TIO~I LOAPa AGF.EE~^1ENT
TWO-NOTE FOKM
THIS AGREEi~rEi1T is made by the City of Chula vista .
a municipal corporation, herein called "City", and BANK OF
AMERT.CF~ NATIONAL, TRUST AND SAVINGS ASSOCiATI0i1, a national
banking association, herein called "Bank".
R E C I T A L S
A. City has authorized a Housing Rehabilitation/
Code Enforcement Program (as amended and modified from time
to time, herein called "Program"),
B' As part of City's implementation of Program,
City has requested Bank to make below market interest rate
property rehabilitation Loans ("Loans") to certain owners
of residential real property within City a;~d approved by
City as recipients of Loans ("P_pplirants") . The purpose
of the Loans. would be the rehabilitation of said real
property in accordance with Program.
C. Bank is wia.ling,to make Loans to Applicants
on the terms and conditions set forth in this Agreement.
NOj~T, THEP.EFORE, fox and i.n consideration of the
foregoing and the mutual agreements made herein, and for
other good and valuable consideration, City and ~3ank agree
as follows: .
1. At the request of City, Bank, through its
_ S•hc~la Vista Branch, shall consider making Loans
to Applicants directed to Bank by City. City shall notify
the respective Applicant in writing of any such reques t
it,makes to Bank. The notification shall contain the
following statement : "City has requested the Chul a
_ ~~+a Branch cf Bank of America National Trust and.
Savings Association, Chula Vista California 92010
to consider making a specific extension of credit to you."
2. City shall furnish to Bank, with respect to.
each Loan application:
(a) an introductory letter stating that
City desires. Bank to consider making a Loan to Applicant;
(b) a breakdown of the costs involved in
the rehabilitation work to b.e performed on Applicant's
.real property; t
(c)
(d)
property offered as
(e)
Applicant pursuant
(f)
contractor who will
a description of the work;
an estimate of the value of the real
security for the Loan;
a copy of the notice provided to
to paragraph 1 above; and
the name of the
perform the rehabilitation work
2 -
3. Bank shall perform its cus.toma~ credit
evaluation with respect to each Applicant, make its judg-
ment with respect to the credit worthiness of each
Applicant, and inform a designated representative of City
of such judgment, and if City desires that the Loan should
be made, Banl; shall make the Loan to Applicant.
4• (a) Each Loan shall be ev~.denced by tcao
notes, effective in succession, as provided herein.
(b) The note first effective shall be a
short-term corru-nercial note . I is term shall coincide
approximately with the rehabilitiation period, and the
y..oan proceeds thereof shall be disbursed by Bank in a
number of draws, each to follow completion of an applicable
stage of construction, as certifiacl to Bank by City.
Interest shall accrue only on the disbursed portion of the
Loan.
(c) Promptly after Bank's disbursement of
the final draw under the short-term commercial note, that
note shall be refinanced by an installment note, as pro-
vided for at subparagraph (d) below and, alternatively,
at paragraph 7 below. At the time th.e short-term commercial
note is refinanced by the installment note, 1-applicant may
either pay Bank the accrued interest on tho short-term
co-;~mercial note or may have it added to the principal of
the installment note. The amount of the installment note
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may be additionally increzsed fron the amount of the,
short-term commercial note by an ammount of precomputed
interest (add-on interest) added to principal if, in
accordance with subparagraph (d) below, that form of
installment note is used.
(d) The term of the installment note shall
be determined by Bark for the Loan in question, but may
rot exceed 15 years, and the installment note shall be
<..~nortized in equal monthly installments over its term.
~he amount of the installment note shall include precom-
4~uted interest added to the amount financed (add-on
interest) if the installment note is executed before the
c?~~te on which Bank begins using (as it anticipates at' the
d~;te of execution of this Agreement that it will shortly
begin using) simple interest for comparable loans that are
no'c subject to the Program.
5. tiVith respect to each Loan:
(a) ; On both the short-term .commercial not:
`r,d the installment note, interest and other finance
c~~zarges, as defined in the Federal Truth In Lending Act
and Regulation Z thereto, shall be such as to result in an
Annual Percentage Rate, as 'defined in that Act and Regula-
tion, of 3-3/40.
(b) The Loan shall be doct~-~ented using
Bank's standard fornls therefor, current sa.-~ples of which
ar:^ attached as Exhibits A through w
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(c) Both the short-term commercial note
and the installment note shall, at City's option, be
secured by a deed of trust covering the real property that
is the subject of the rehabilitation for which the proceeds
of the Loan are to be used.
6. {a) The Loans shall be supported by a
noninterest bearir.y deposit (public agency savings account}
made by City in an amount at all times at least equal t:~
the unpaid principal a„lount of all Loans plus earned
interest thereon. A relevant deposit to such account
shall be made when Loan funds are initially advanced by
Bank to an Applicant and when interest on a short-term
commercial note becor.~s added to tze principal of a
subsequent installment note. At the end of each calendar
month during the term of this' Agreement Bank shall remit
to City the amount of such deposit as exceeds the unpaid
principal, plus earned interest on all outstanding Loans.
City hereby assigns said deposit to Bank for the purpose
set forth in paragraph 8 below.
(b) Except as specifically required by this
Agreement, City waives any right it may have to requir-e
Bank to: (i} proceed against any Applicant or other person;
(ii) proceed against or exhaust a:~:y other collateral for
the relevant Loan; or (iii) pursue any other remedy in
Bank's power; and waives any defense arising by reason of
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any disability or other defense of Applicant or any other
person, or by reason of the cessation from any cause what-
soever, other than full payment, of the liability of an
Applicant or any other person.
7. In the event City requests Bank to make a
Loan the reasonable terms of which are other than as pro-
vided in paragraphs 4 and 5 above, Bank shall comply with
City's request. In that case, promptly after Bank has
obtained Applicant's note on terms City has requested for
the Loan, or for the initial note thereof, Bank shall
promptly assign the Loan, without recourse, to City. There-
after, City shall fund the Loan and need not with respect
to the Loan make a deposit as provided for in paragraph 6
above. Promptly after the assignment, City shall pay to
Bank its out-of-pocket expenses but in no event less than
THIRTY SEVEN DOLLARS AIVD 50/100 ($37.50) nor more than
SEVENTY FTVE DOLLARS AND NO/lOG ($75.00) for each Loan sa
made. Such out-of-pocket expenses shall be at City's sole
expense and shall not be recovered-from Applicants.
$• (a) Any Loan made by Bank which remains in
default for a continuous 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 shall be purchased by City for an amount equal to
the then outstanding principal balance of the Loan plus
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unpaid earned interest thereon. For Loans evidenced by
installment notes on which precomputed interest has been
added to-the amount financed, as provided for in sub-
- paragraph 4(d) above, unpaid earned interest shall b e
calculated under the Rule of 78ths. City understands that
one aspect of the Rule of 78ths is that :i.n the event of
default prior to the initial paymant, the amount necessary
to purchase a Loan from Bank may exceed the initial
principal balance of the Loan.
(b) Said purchase shall be accomplished by
. (1) the due endorsement by Bank to
City of the promissory note evidencing such Loan, without
recourse or warranty;
(2) the debit by Bank to the deposit
account supporting the Loans in an amount equal to the
purchase price therefor; and
(3) the delivery of the promissory
note and the assignment and delivery of the deed of trust.
(c) During any ninety (90) day default
period, Bank steal] perform its customary collection pro-
cedures with respect to each Loan, but of ter the sale
thereof to City, shall have no responsibility for collection
or otherwise with respect thereto, except as provided
herein. Bank shall, for its customary fees therefor,
~ _.
accept such Loans from City for collection purposes only,
pursuant to Bank's then current instali.ment collection
procedures.
(d} On City's regsest, Bar.:c shall, for its
customary fees therefor, provide ~oreclosuxe services with
respect to any Loan in default, a_Zd may substitute Bank for
Continental Auxil~_ary Company as trustee under the appli-
cable deed of trust prior to pzrfcrming such services.
9 • The terms of this :agreement shall be two
(2) years from the date of execution by City, renewable
by mutual consent of the parties- hereto with such amend-
ments and modifications as ther_ may be agreed to. This
Agreement may be ter;~inated by eit:ner of the parties hereto
one (1) year from the date hereof provided written notice
of intent to terminate is give r_ to the other party at leas t
sixty (60) days prior to the terms nation date, Any termina-
tion of this Agreement shall not a~fect the operation hereof
• as it relates to Loans outstancin; at the time of said
termination.
10• Prior to the mak ink of the sirs t Loan as
contemplated by this Agreement, City shall furnish or
cause to be furnished to Ban{ an ccinion of its City Attorney
to the effect:
(a} that City has all requisite power and
authority to enter into this Agre_ment;
.- g
(b) that City has taken all s uch actions
as may be required for the execution, delivery and per-
formance hereof; and
(c) that this Agreement (and any instrument
or document to which City is a party pursuant to this Agree-
ment) is, or will become upon execution by City, valid,
binding and enforceable in accordance with its terms.
11. Bank covenants and agrees that nothing in
this Agreement or any agreement made pursuant hereto shall
be deemed or construed by Bank to make City a surety or
guarantor of any Loan and City's liability to Bank with
respect to the purchase of any Loan shall be limited to
the deposit supporting the Loans, plus any amount necessary
for payment of earned interest, as set forth in paragraph ~
above.
12, City shall indemnify and hold harmless Bank
against alI claims and damages, alleged or otherwise, of
whatsoever nature arising out of or in any way connected
with the acts or omissions of any contractor performing
rehabilitation work in connection with this Agreement;
provided, however, that City's obligations under this
paragraph shall not extend to negligent or wilful acts or
omissions by Bank, All contractors shall operate as
independent contractors and nothing herein is intended to
affect such independent contractor status.
-- 9 -
13. City and Bank shall comply
cable statutes and regulations, including
tion, where applicable, the Federal Truth
and Regulation Z thereto, the Consumer Cry
Act, and the Equal Credit Opportunity Act
B thereto.
with all appli-
without limita-
In Lending Act
edit Reporting
and Regulation
14. Any communications between the parties hereto
may be given by mailing the same, postage prepaid, to Bank
at its _ Chula Vista Branch, 295 E Street, Chula Vista
California 92010 and to City at Office of the City
Manager, 276 Fourth Ave. , Chul a Vista , California 92010
or to such other addresses as either party may in writing
hereazter indicate.
15. This Agreement and any agreement, docul-nent
or instrument attached hereto or referred to herein
integrate all terms and conditions mentioned herein or
incidental hereto, and supersede all oral negotiations and
grior writings in respect to the subject matter hereof.
In the event of any conflict between the terms, conditions
and provisions of this Agreement and any such agreement,
document or instrument, the terma, conditions and provisions
of this Agreement shall prevail.
16. This Agreement shall be administered on
behalf of City by and through the City Manager or his
authorized representative.
- 10 -
17. This Agreement may be executed in as many
counterparts as may be deemed convenient, each of which,
• when executed, shall be deemed an original.
IN LaITNESS tdHEREOF, this Agreement is executed
by the City oz (;hill a ~~i eta acting by and through
its City Manager, pursuant to Resolution No. 8403
authorizing such execution, and by Bank.
Dated this 26th day of
BAi~1K OF AMEP, CA NATIOi1AI, TRUST
AND SAV~i1~ ~pCIATION
October
l9 76.
K. S. Smeby, Senior Vice P esi
Title
CITY OF
Title ••"'layor, City of Chul a Vista
11
PROPERTY REHABILITATION. LOAN AGREEMEIT
SINGLE NOTE FOR~'~I
THIS AGREEMENT is made by the City of china vista
a municipal corporation, herein called "city", and BANK OF
AMERICA NATIONAL TRUST A21D SAVINGS ASSOCIATION, a national
banking association, herein called "Bank".
R E C I T A L S
A. City has authorized a Housing Rehabilitation/
Code Enforcement Program (as amended and modified from time
to time, herein called "Program").
B. As part of City's implementation of Program,
City has requested Bank to make below market interest rate
property rehabilitation loans ("Loans") to certain owners
of residential real property within City and approved by
Gaty as recipi ents of Leans ("Applicants") . The purpose
of the Loans would be the rehabilitation of said real
property in accordance with Program.
C. .Bank is willing to make. Loans to Applicants
on the terms and conditions set forth in this Agreement,
NOP,T, THEREFORE, for and in consideration of the
foregoing and the mutual agreements made herein, and for
other good~and valuable consideration, City and Bank agree
as follows
l . At the reques t of City, Bank , through i is
r.n~,~a ~~;~ta Branch, shall consider making Loans
to Applicants directed to Bank by City. City shall notify
the respective Applicant in writing of any such request
it makes to Bank, The notification shall contain the
following statement: "City has requested the Chula
Vista Branch of Bank of America National Trust and
Savings Association, Chula Vista , California 92010
to consider making a specific extension of credit to you."
2. City shall furnish to Bank, with x•espect to
each Loan application:
(a) an introductory letter stating that
City desires Bank to consider making a Loan to Applicant;
(b) a breakdown of the costs involved in
the rehabilitation work to be performed on Applicant's
real property;
(c}
(d)
property offered as
(e) .
Applicant pursuant
(f)
contractor who will
a description of the work;
an estimate of the value of the real
security for tKe Loan;
a copy of the notice provided to
to paragraph 1 above; and
the name of the
perform the rehabilitation work
_~_
3. Bank shall perform its customary credit
evaluation with respect to each Applicant, make its judg-
ment with respect to the credit worthiness of each
Applicant, and inform a designated representative of City
of such judgment, and if City desires that the Loan should
be made, Bank shall make the Loan to Applicant.
4. Wa.th respect to each Loan:
(a) The Loan shall be documented using
Bank's standard forms therefor, current samples of which
are attached as Exhibits A through W
(b) Interest and other finance charges, as
defined in the Federal Truth In Lending Act and Regulation
Z thereto, shall be such as to result in an Annual Percentage
Rate, as defined in that Act and Regulation, of 3-3/4g.
(c) The note evidencing the Loan shall include
precomputed interest added to the amount financed (add-on
interest) if the note is executed before the date on which
Bank begins using (as it anticipates at the date of execution
of this Agreement that it wiJ_l shortly begin using) simple
interest for comparable loans that are not subject to the
Program.
(d) The term of the Loan in question shall
be determined by Bank, but may not exceed 15 years . The Loan
shall be amortized in equal monthly installments over its term.
-3-
{e) The note evidencing the Loan shall, at
City's option, be secured by a deed of trust covering the
real property that is the subject of the rehabilitation for
which the proceeds of the Loan are to be used.
5. (a) The Loans shall be supported, by a ~ron-
interest bearing deposit (public agency savings account)
made by City in an amount at all tirr~es at least equal to
.the unpaid principal amount of all Loans plus earned
interest thereon. A relevant deposit to such account
shall be made when Loan funds are advanced by Bank to an
Applicant. At the end of each calendar month during the
term of this Agreement Bank shall remit to City the amount
of such deposit as exceeds the unpaid principal plus earned
interest on all outstanding Loans. City hereby assigns said
deposit to Bank for the purpose set forth in paragraph 7 below.
(b) Except as specifically required by this
Agreement, City waives any right it may have to require
Bank to: (i) proceed against any Applicant or other person;
{ii) proceed against or exhaust any other callateral for
the relevant Loan; or (iii) pursue an_y other remedy in
Bank's power; and waives any defense arising by reason of
any disability or other defense of Applicant or any other.
person, or by reason of the cessation from any cause what-
soever, other than full payment, of the liability of an
Applicant~or any other person.
-n-
6. i:n the event City requests Bank to make a
Loan the reasonable terms of which are other than as pro-
vided in paragraph 4 above, Bank shall comply with City's
request. In that case, promptly after Bank has obtained
Applicant's loan documents on terms City has requested for
the Loan, Bank shall promptly assign the Loan, without
recourse, to City. Thereafter, City shall fund the Loar,
and need not with respect to the Loan make a deposit as
provided far in paragraph 5 above. Promptly after the
assignment, City shall pay to Bank its out-of-pocket expenses
but in no event less than THIRTY SEVEN DOLLARS AND 50/100
($37.50) nor more than SEVENTY FIVE DOLLARS AND NO/100 ($75.00)
for each Loan so made. Such out-of-pocket expenses shall be
at City's sole expense and shall not be recovered from Appli-
cants .
7 • (a) Any T_.oan, other than a Loan that is
immediately transferred to City as provided in Paragraph 6
above, which remains in default for a continuous 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 shall be purchased by City for an
amount equal to the then outstanding principal balance of
the Loan plus unpaid earned interest thereon. For r.nanc
evidenced by notes on which precomputed interest has been
added to the amount financed, as provided for in subpara-
graph ~4(c) above, unpaid earned interest shall be calculated
under the Ruls of 7pths. City understands that one aspect
of the Rule of 78ths is that .in the event of default prior
to the initial payment, the amount necessary to purchase a
Loan from Bank may exceed the initial principal balance of
the Loan.
(b) Said purchase shall be.accomplished by:
(1) the due endorsement by Bank to
City of the promissory note evidencing such Loan, without
recourse or warranty;
(2) the debit by Bank to the deposit
account supporting the Loans in an amount equal to the
purchase price therefor; and
(3) the delivery of the promissory
note and the assignment and delivery of the deed of trust.
(c) During ar~y ninety (90) day default
period, Bank shall perform its customary collection pro-
cedures with respect to each Loan, but after the sale
thereof to City, shall have no responsibility for collection
or otherwise with respect thereto, except as provided herein.
Bank shall, for its customary fees therefor, accept such Loans
from City for collection purposes only, pursuant to Bank's
then current installment collection procedures.
(d)_ On City's request, Bank shall, for its
customary fees therefor, provide foreclosure services with
respect to any Loan in default, and may substitute Bank for
Continental Auxiliary Company as trustee under the appli-
cable deed of trust prior to performing such services.
~~_
8, The terms of this Agreement shall be two
(2) years from the date of execution by City, renewable
by mutual consent of the parties hereto with such amend-
ments and modifications as then may be agreed to. This
Agreement may be terminated by either of the parties hereto
one (l) year from the date hereof provided written notice
of intent to teszninate is given to the other party at least
sixty (60) days prior to the termination date, Any termina-
tion of this Agreement shall not affect the operation hereof
as it relates to Loans outstanding at the time of said
termination. ~~
9. Prior to the making of the first Loan as
contemplated by this Agreement, City shall furnish or
cause to be furnished to Bank an opinion of its City Attorney
to the effect:
(a) that City has all requisite power and
authority to enter into this Agreement;
(b) that City has taken all such actions
as may be required for the execution, delivery and per-
formance hereof; and
(c) that this Agreement (and any instrument
or document to which the City is a party pursuant to this
Agreement) is, or will become upon execution by City, valid,
binding and enforceable in accordance with its terms,
-7-
10. Bank covenants and agrees that nothing in
this Agreement or any agreement made pursuant hereto shall
be deemed or -construed by Bank to make City a surety or
guarantor of any Loan and City's liability to Hank with
respect to the purchase of any Loan shall be limi'ced to
the deposit supporting the Loans, plus any amount necessary
for payment of earned interest, as set forth in paragraph 7
above.
11. City shall indemnify and hold harmless Bank
against all claims and damages, alleged or otherwise, of
whatsoever nature arising out of or in any way connected
with the acts or omissions of City or of any contractor
performing rehabilitation work in connection with this Agre e-
ment; provided, however, that City's obligaticns under this
paragraph shall not extend to negligent or wilful acts or
omissions by Bank. All contractors shall operate as
independent contractors and nothing herein is intended to
affect such independent contractor status.
12. City and Bank shall comply with all applicable
statutes and regulations, including without limitation,
where applicable, the Federal Truth In Lending Act and
Regulation Z thereto, the Consumer Credit Reporting Act,
and the Equal Credit Opportunity Act and Regulation B thereto.
13. Any communications bettaeen the parties hereto
may be given by mailing the same, postage prepaid, to Bank
at its _-._~h~~l a v; cta Branch, ?q5 F S1-rPPt _ Chul a ~~
-- ~~a .____ ,
California 92Q,~O and to City at Office of the City Manager,
276 Fourth Chula Vista, California 92010 , or to such other
addresses as either party may in writing hereafter indicate.
14. This Agreement and any agreement, document
or instrument attached hereto or referred. to herein
integrate all terms and conditions mentioned rierein or
incidental hereto, and supersede all oral negotiations and
prior writings in respect to the subject matter hereof.
In the event of any conflict between the terms, ccnditions
and provisions of this Agreement and any such agreement,
document or instrument, the terms, conditions and provisions
of this Agreement shall .prevail.
15. This Agreement shall be administered on
behalf of City by aid through the City Manager or his
authorized representative.
16. This Agreement may be executed in as many
counterparts as may be deemed convenient, each of which,
when executed shall be deemed an original.
IN WITNESS WHEREOF, this Agreement is executed
by the City of Chul a Ui sta acting by and through its
City Manager, pursuant to Resolution No.
~~ authorizing
such execution, and by Bank.
Dated this ~hth day of
_Q~tober . 1976 -
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION CITY OF
By / ~....--'
~~
K. S. Smeby, Senior Vice Pr
Title Title Mayor, City of Chula Vista