1980-05 RESOLUTION NO. CRA-80-5
RESOLUTION OF THE GRAND. TERRACE
COMMUNITY REDEVELOPMENT AGENCY
APPROVING AND AUTHORIZING EXECU-
TION OF CERTAIN INTERIM AGREEMENTS
INCIDENT TO THE RESIDENTIAL MORT-
GAGE FINANCING PROGRAM
WHEREAS, the Agency proposes to issue, sell and deliver
Residential Mortgage Revenue Bonds, as detailed in the Commit-
ment Contract, for the purpose of providing funds to purchase
mortgage loans made to provide permanent financing for residences
to be constructed within the Agency' s Grand Terrace Community
Redevelopment Project Area; and
WHEREAS, the Griffin Homes Partnership, hereinafter called
"Developer" , is in the process of subdividing lands within the
Project Area and constructing and marketing residences therein
to the general public; and
WHEREAS, the Agency contemplates the making and entering
into of a Commitment Contract with the Developer and the making
and entering into of a Mortgage Loan Purchase Agreement with
Crocker National Bank, hereinafter called "Qualified Mortgage
Lender" , draft forms of both the Contract and Agreement having
been heretofore provided, respectively, to the Developer and
to the Qualified Mortgage Lender; and
WHEREAS, the purposes of the Commitment Contract and the
Mortgage Loan Purchase Agreement are to establish procedures
by which and criteria for the origination and sale of Mortgage
Loans to the Agency for purchase with the proceeds of the
Bonds; and
WHEREAS, the Agency desires to cooperate with the Developer
and the Qualified Mortgage Lender pending sale of the Bonds to
the general public in order to provide to the purchaser of the
residences an opportunity to participate in the Residential
Mortgage Financing Program of the Agency:
NOW, THEREFORE, the Grand Terrace Community Redevelopment
Agency does hereby resolve as follows :
Section 1. That the above recitals are all true and
correct.
Section 2. That the Agency hereby approves and authorizes
execution of certain interim agreements entitled:
(a) "Interim Mortgage Loan Purchase Agreement" by
and between the Agency, Crocker National Bank
and Griffin Homes Partnership; and
(b) "Interim Agreement with Participating Owners"
by and between Agency and Owners of proposed
residences within the Project Area.
in substantially the form attached hereto and made a part hereof
as EXHIBIT "A" and EXHIBIT "B" , respectively.
Section 3. That counsel for the Agency is hereby authorized
and directed to make any non-substantive changes and modifications
to said agreements in order to clarify and fulfill the intent
of the Agency.
Section 4 . That this Resolution shall take effect immed-
iately upon its adoption.
ADOPTED this z$th day of 17-U/0 1980 .
C'�hairman of �ee Co u iity Redevelop-
ment Agency o`er the City of Grand
Terrace.
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ATTEST:
� J
Secret#-y of'-.the Community Redevelop-
= meet- Agency�o=f the City of Grand
- _ Terrace.
APPROVED AS TO FORM:
ezjar�
etto r.Vy
i
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STATE OF CALIFORNIA )
COUNTY OF .SAN BERNARDINO ) ss .
CITY OF GRAND TERRACE )
I, MYRNA LINDAHL, Secretary of the City of Grand Terrace
Community Redevelopment Agency, DO HEREBY CERTIFY that --the fore-
going Resolution was duly adopted by the Community Redevelopment
Agency of said City at a special meeting of the Community Rede-
velopment Agency held on the 28th ' day of Julv 1980,
and that it was so adopted by the following vote :
AYES : Agency Members Tillinghast, Grant, Petta, Nix, Rigley
NOES : None
ABSENT: None
Secre�yof e Cdrmtunity Rede_=
velopment Agency of the City of
Grand Terrace.(SEAL)
-
STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss.
CITY OF GRAND TERRACE )
I , MYRNA LINDAHL, Secretary of the City of Grand Terrace
Community Redevelopment Agency, DO HEREBY CERTIFY that the above
and foregoing is a full, true and correct copy of Resolution No.
CRA-80-5 of said Agency, and that the same has not been
amended or repealed.
DATED: Julv 28 , 1980 .
Secre ary of the 'Community_ Rpde
velopment Agency of_ the' City- of
Grand Terrace.
; -� (SEAL) _
DRM:lcm 7/23/80
INTERIM MORTGAGE LOAN
PURCHASE AGREEMENT
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF GRAND TERRACE
RESIDENTIAL _4ORTGAGE REVENUE BONDS
(As Detailed in the Commitment Contract, Annex C)
RESIDENTIAL MORTGAGE FINANCING PROGRAM
This Interim Mortgage Loan Agreement is- made and en-
tered into as of July 28 1980, by and between the Community
Redevelopment Agency of the City of Grand Terrace (the "Agen=
cy") , Crocker National Bank (the "Qualified Mortgage Lender" ) ,
the Griffin Homes Partnership, a limited partnership of which
Griffin Development Co. is a general partner and Griffin Devel-
opment Co. (the "Developers") .
W I T N E S S E T H:
WHEREAS, the Agency proposes to issue, sell and de-
liver Residential Mortgage Revenue Bonds, as detailed in the
Commitment Contract, Annex C, (the "Bonds" ) for the purpose of
providing funds to purchase mortgage loans (the "Mortgage
- Loans") made to provide permanent financing for residences ( the
."Residences" ) to be constructed within the Agency's Grand Ter-
race Community Redevelopment Project Area (tne "Project Area")
( the "Residential Mortgage Financing Program" ) ;
WHEREAS, the Developer is in the process of subdivid-
ing lands within the Project Area and constructing and market-
ing Residences therein to the general public;
WHEREAS, the Agency contemplates the making and enter-
ing into of a Commitment Contract with the Developer and the
making and entering into of a Mortgage Loan Purchase Agreement
with the Qualified Mortgage Lender , draft forms of both the
Contract and the Agreement having been heretofore provided,
respectively, to the Developer and to the Qualified Mortgage
Lender;
WHEREAS, the purposes of the Commitment Contract and
the Mortgage Loan Purchase Agreement are to establish proce-
EXHIBIT "A"
dunes by which and criteria for the origination and sale of
Mortgage Loans to the Agency for purchase with the proceeds of
the Bonds; and
WHEREAS, the Agency desires to cooperate with the De-
veloper and the Qualified mortgage Lender pending sale of the
Bonds to the general public in order to provide to the pur-
chasers of the Residences an opportunity to participate in the
Residential Mortgage Financing Program of the Agency;
NOW, THEREFORE, in consideration of the conditions and
agreements herein set forth, the Agency, the Qualified Mortgage
Lender and the Developers agree as follows:
1. The - Agency shall have no obligation under this
Agreement unless and until:
(a) Bonds to provide funds to purchase the ap-
plicable Mortgage Loan are issued, sold and delivered to Miller
& Schroeder Municipals, Inc. , the proposed purchasers thereof;
and
(b) The Mortgage Loans comply with all of the
underwriting criteria as well as all of the other conditions
for the purchase thereof by the Agency, as. to be more parricu- .
larly described in the applicable Commitment Contract and in
the applicable Mortgage Loan Purchase Agreement; and
(c) The Agency and the purchaser or the Resi-
dence, shall, prior to the funding of the Mortgage Loan by the
Qualified Mortgage Lender, have entered into an agreement with
the purchaser of the Residence substantially in the form at-
tached hereto as Exhibit "A" and 'hereby made a part hereof,- the
purpose of such Agreement being to establish the terms, condi-
tions and agreements pursuant to which the purchaser shall be
eligible to be a participating party in the Residential Mort-
gage Financing Program of the Agency and pursuant to which the .
Agency will purchase the applicable Mortgage Loans; provided
that a Mortgage Loan shall not be purchased by the Trustee on
behalf of the Agency, if such Mortgage Loan will Dear an annual
interest rate in excess of eleven percent (11%.) ; and
(d) Both the Commitment Contract and the Mort- .
gage Loan Purchase Agreement shall have been duly executed or
approved by the appropriate parties thereto.
2. Developers agree to satisfy all terms, covenants
and conditions of that certain Take-out Commitment Letter dated
executed by Developers and Qualified
Mortgage Lender.
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3. In addition, to be elibigle for - funding by the
Qualified Mortgage Lender pursuant to this Interim Mortgage
Loan Purchase Agreement, the Mortgage Loan shall meet the fur-
ther criteria and be subject to the further conditions herein
set forth, including the following:
(a) All Mortgage Loans shall comply with the
underwriting criteria established by the Federal National Mort-
gag-e Association ("FNMA") or the Federal Home Loan Mortgage
Corporation ( "FHLMC") .
(b) Mortgage Loans shall not have a Mortgage
Loan to Market Value ratio - in excess of ninety-five percent
(95%) . ( "Market Value" means the lesser of the sales price of
the Residence or the appraised value of the Residence, as such
appraised value is determined by the appraiser for the Quali-
fied Mortgage Lender) .
(c) The promissory note and mortgage (deed of
trust) securing repayment of the iKortgage Loan, as well as all
other documentation executed in connection with the funding of
such Mortgage Loan, shall contain appropriate provisions for
implementation of the purchase of such Mortgage Loan with the
proceeds of the Bonds, as more particularly described in Ex-
hibit "B" attached hereto and hereby made a part hereof; and
(d) The initial annual rate which the Mortgage
Loan shall bear shall be Crocker National Bank ' s prime home
mortgage loan interest rate for single-family detached resi-
dences, not to exceed eleven percent (11%) .
4. The Qualified Mortgage Lender shall not be obli-
gated to fund pursuant to this Interim Mortgage Loan Purchase
Agreement an aggregate initial principal amount of Mortgage
Loans in excess of one million two hundred thousand dollars
($1, 200 , 000) .
5. The Qualified Mortgage Lender shall not be re-
quired to commit to fund a Mortgage Loan for a period longer
than forty-five (45) days.
6. The Qualified Mortgage Lender shall not be re-
quired to fund a Mortgage Loan pursuant. to this Interim Mort-
gage Loan Purchase Agreement after November 1, 1980, and, if by
November 1, 1980 , or such earlier date as set forth in a writ-
ten notice from Developer to the Agency, the Agency shall not
have purchased Mortgage Loans funded pursuant to this Interim
Mortgage Loan Purchase Agreement, then the Qualified Mortgage
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Lender shall be entitled to sell such Mortgage Loans to the
Federal National Mortgage Association or to the Federal Home
Loan Mortgage Corporation or to otherwise dispose of such Mort-
gage Loans.
7. In addition to the other requirements herein set
forth, to be elibigle for purchase with the proceeds of the
Bonds, the Qualified Mortgage Lender must represent and warrant
with respect to a Mortgage Loan as of the date if, and when,
such Mortgage Loan is purchased with the proceeds of the Bonds,
as follows: .
(a) The Mortgage Loan is secured by a residence
which is located within the Project Area and which, to the best
knowledge of the Qualified Mortgage Lender, will be occupied by
the Mortgagor as the Mortgagor ' s principal place of Residence.
(b) Except that the interest rate on the Mort
gage Loan is below the market interest rate, the Qualified
Mortgage Lender has no knowledge of any circumstances or condi-
tions with respect to the Mortgage Loan or the Mortgagor that
could reasonably be expected to cause prudent private investors
to regard the Mortgage Loan as an unacceptable investment, .
cause the Mortgage Loan to become delinquent, or adversely af-
fect the value or marketability of the Mortgage Loan.
(c) The Qualified Mortgage Lender has complied
with the terms and conditions of the mortgage insurer and has
obtained a certificate or binding commitment of insurance .of .
the levels described 'herein under "Mortgage Insurance" .
(d) The Mortgagor is not in default in the pay-
ment of any installment of principal or interest, escrow funds,
real property taxes or otherwise in default under the Program
Documents.
(e) The Qualified Mortage Lender has obtained a
current American Land Title Association mortgagee title insur-
ance policy, duly assigned or assignable for the benefit of the
Trustee, on behalf of the Agency, that insures 'that title to
the Residence is vested in the Mortgagor subject to the lien of
the Mortgage and to permitted encumbrances, or , in lieu thereof
has obtained a preliminary title report and irrevocable in-
structions of such effect.
(f) To the best knowledge of the Qualified Mort-
gage Lender , construction of the Residence is complete and it
is free of any material damage and is in general good repair
and habitable condition.
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(g) The Residence is covered by a Dwelling
Building Special Form all risk policy with an inflation cover-
age endorsement and an earthquake damage assumption endorsement
(if commercially available) assigned in favor of the Qualified
Mortgage Lender, the Trustee and the Agency as their interests
may appear , in the amount specified in the Program Documents.
8. The Developer shall inform all prospective pur-
chasers of the Residences of the potential availability of long
term financing for Residences pursuant to the proposed Residen-
tial Mortgage Financing Program of the Agency. Information
relating to such Program is contained in Exhibit "C"., attached
hereto and hereby made a part hereof.
.9. Notwithstanding the provisions of paragraph 2
- herein, the Qualified Mortgage Lender shall charge the original
Mortgagor an origination fee of two percent (20) of the initial
principal amount of the applicable Mortgage Loan, plus one 'hun-
dred dollars ($100) .
IN WITNESS WHEREOF, the parties hereto have caused
this Interim Mortgage Loan Purchase Agreement to be executed in .
their names by an officer unto duly authorized on the dates
hereinafter set forth.
DATE: CROCKER NATIONAL BANK, A
NATIONAL BANKING ASSOCIATION,
THE QUALIFIED MORTGAGE LENDER
By
Title
-DATE: �/,�/,j /9�� COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF GRAND TERRACE.,
= ATTEST:
THE- - -- THE AGENC
Yl 'Oti..�.�.
Secrety Tile
Com t
munity_Hedevelopment Agency // ,
DATE: GRIFFIN DEVELOPMENT CO. ,
THE, DEVELOPER
By
Title
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THE GRIFFIN HOMES PARTNERSHIP,
A LIMITED PARTNERSHIP, BY
GRIFFIN DEVELOPMENT CO. ),
GENERAL PARTNER
ay
Title
' DRM: lcm 7/23/80
INTERIM AGREEMENT
WITH
PARTICIPATING OWNERS
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF GRAND TERRACE
RESIDENTIAL MORTGAGE REVENUE BONDS
(As Detailed in the Co-.mmitment Contract, Annex C)
RESIDENTIAL MORTGAGE FINANCING PROGRAM
This Interim Agreement with Participating Owner is
made and entered into the day and date set forth below by and
between the Community Redevelopment Agency of the City of Grand
Terrace (the "Agency" ) , and the undersigned (che "Owner" ) as a"
participating party in the proposed Residential Mortgage Fi-
nancing Program of the Agency;
WITINESSE T H:
WHEREAS, the Agency proposes to issue, sell and de-
liver Residential Mortgage Revenue Bonds, as detailed in the
Commitment Contract, Annex :C, ( the "Bonds") for the purpose of
providing funds to purchase mortgage loans (the "Mortgage
Loans") made to provide permanent financing for residences (the
"Residences" ) to be constructed within the Agency ' s Grand Ter-
race Community Redevelopment Project Area (the "Project area" )
(the "Residential Mortgage Financing Program" )
WHEREAS , .Developers are in che process of subdividing
lands within the .Project Area and constructing and marketing
Residences therein to the general public;
WHEREAS, the Agency contemplates the making and enter-
ing into of a Commitment Contract witn the Developers or the
Owner ' s Residence and the making and entering into-of a Mort-
gage Loan Purchase Agreement with the qualified mortgage lend-
er , which,--originates Owner ' s Mortgage Loan, draft forms or both
the Contract and the Agreement naving be-an _heretofore provided,
respectively, to the developer and to the qualified mortgage
lender ;
EXHIBIT "B"
• WHEREAS, the purposes of the Commitment Contract and
the Mortgage Loan Purchase Agreement are to establish proce-
dures and criteria for the origination and sale of Mortgage
Loans to the Agency for purchase with the proceeds of the Bonds;
WHEREAS, the Agency desires to cooperate with the De-
velopers and the qualified mortgage lender pending sale of the
Bonds to the general public in order to provide to the Owner an
opportunity to participate in the Residential Mortgage Financ
ing Program of the .Agency; and
WHEREAS, the Agency and the Owner desire to set forth
the terms, conditions and agreements pursuant to which the Ow-
ner shall become elibigle as a participating party in the pro-
posed Residential Mortgage Financing Program or the Agency,
which Program shall be implemented by the Agency when, and if,
Bonds to provide funds to purchase the Owner ' s Mortgage Loan
are issued, sold and delivered:
NOW, THEREFORE, in consideration of the conditions and
agreements herein set forth, the Agency and the Owner agree as
follows:
1. . The Owner shall be elibigle to be a Participating
Party in the proposed Residential Mortgage Financing Program of
the Agency provided the Owner shall .be the owner/occupant of
the Residence securing repayment of the Mortgage Loan purchased
by the Agency with the proceeds of the Bonds and provided the
Mortgage Loan and the Participating Party shall, at the time or
the purchase of the Mortgage Loan by the Agency, comply with
all requirements of the Agency, for the purchase of Mortgage
Loans.
2. To be elibigle for purchase by the Agency, Morc-
gage Loans must, among other things , meet the following cri-
teria and conditions.
(a) Mortgage Loans submitted by the Qualified
Mortgage Lender to the Trustee for purchase shall, in all re-
spects, conform co the further applicable provisions of the
Commitment Contract, Mortgage Loan Purchase Agreement, the Sel-
lers ' Guide containing further criteria relating to Mortgage
Loans and the Resolution authorizing the issuance of the Bonds.
(b) Each Mortgage Loan (including a combined .
Mortgage Loan) shall be amortized on a monchly basis in ap-
proximately equal installments. The term of a Mortgage Loan
shall not exceed thirty (30) years. The minimum casn down pay-
ment required for each Residence .shall be as provided in the
applicable Commitment Contract and no other loan-to-value, limi-
cations shall apply.
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(c) In order to qualify for purchase by the
Trustee on behalf of the Agency, a Mortgage Loan must have been
finally endorsed or committed for insurance by a private mort-
gage insurance policy issued by a private mortgage insurance
company licensed to insure mortgages in California and quali-
fied to provide insurance on Mortgage Loans.
All Mortgage Loans shall be insured at least to the
following levels of mortgage insurance:
Original Loan to Value Ratio Required Coverage
In excess of 70% to 80% 25%
In excess of 60% to 70% 15%
60% and below 5%
The premium for private mortgage insurance in the
first year shall be collected from the Mortgagor on the date
.the Qualified Mortgage Lender funds the Mortgage Loan and
thereafter , to the extent provided by law, shall ' be collected
(if not sooner paid) in advance at the monthly rate of one-
twelfth (1/12) of the subsequent year ' s premium. Mortgage Loan
insurance premiums are to be paid by the Mortgagor.
(d) Each Mortgage Loan insured by private mort-
gage insurance shall provide a prepayment penalty for principal
payments that accelerate the original amortization schedule or
the Mortgage Loan. During the first five (5) years of the life
of such Mortgage Loan, each Mortgagor shall be subject to a
prepayment penalty on all principal paid in a twelve (12) month
period in excess of twenty percent (20%) of the original prin-
cipal amount of the Mortgage Loan. The penalty to be collected
from the Mortgagor for any such prepayment shall equal six (6)
months ' interest calculated at the annual interest rate that
such Mortgage Loan bears and the penalty shall be applied
against principal paid in excess of the allowed twenty percent
(20%) per year collected from the Mortgagor . No prepayment
penalty is allowed after the fifty year of the Mortgage Loan.
(e) All Mortgage Loans purchased by the Trustee
on behalf of the Agency shall bear an annual interest rate to
be set forth in the Mortgage Loan Purchase Agreement, provided
that the Agency will not authorize the purchase of Mortgage
Loans which will bear an annual interest rate in excess of
eleven percent (11%) .
(f) Mortgage Loans shall be insured by Hazard
Insurance which shall be Dwelling Building Special Form all
risk and shall be carried by the Owner of the Residence. Such
Hazard Insurance shall insure the Residence in an amount at
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least equal to ninety percent (90%) of the insurable value
based upon true replacement cost of the Residence, with an in-
flation coverage endorsement. Earthquake insurance (if commer-
cially available) shall .be carried by the Owner of the Resi-
dence and shall be in an amount at least equal to the unpaid
principal balance of the Mortgage Loan with a deductible clause
of not to exceed five percent (5%) per occurrence. All insur-
ance shall be subject to the provisions as further required by
the Seller ' s Guide.
3. It is understood that the Agency shall be under
no obligation to purchase the Owner ' s Mortgage Loan unless the
Owner ' s Mortgage Loan meets all of the requirements for pur-
chase of Mortgage Loans by the Agency and unless and until the
Bonds are issued, sold and delivered. It is further understood
that, if by November 1, 1980 , or such earlier date as set forth
in a written notice from Developer to the Agency, the -Agency
shall not have purchased Mortgage Loans funded pursuant to this
Interim Mortgage Loan Purchase Agreement, then the Qualified
Mortgage tender shall be entitled to sell such. Mortgage Loans
to the Federal National Mortgage Association or to the Federal
Home Loan Mortgage Corporation or to otherwise dispose of such
Mortgage Loans.
IN WITNESS WHEREOF, the parties hereto have caused
this Interim Agreement with Participating Owner to be executed
on the dates hereinafter set forth.
DATE: COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF GRAND TERRACE,
THE AGENCY
By
Title
DATE:
THE OWNER
THE OWNER
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