HomeMy WebLinkAbout1998-11-09 99-13 ORDERCOUNCIL ACTION
Date: November 9. 1998
It® No. 99-13
Item/subjecU Authorizing Execution oflatertreditor Agreement- Maine Smte Housing
Authority - Home Mortgage Prom m - Nm Neighbors Program
Responsible Department: Community s economic Development
Commentary : This Order would authorize the City Manager to execute an
Intercreditor Agreement with the Maine State Housing Authority (MSHA) and
each private lender participating with the City in the MSHA New Neighbors
Program. Me New Neighbors Program is designed to provide home ownership
opportunities to first-time home buyers who wish to purchase and
rehabilitate existing 1 - 4 unit properties in Maine's inner cities. The
program will start in Portland, Lewiston and Sargon. Special financing
features will allow home buyers to finance loot of the purchase price and
rehabilitation costs. eligible applicants as defined by the MESA are those
who have not had an ownership interest in their principal residence in the
past three years or who have had an Ownership interest in their principal
residence within the past three years, but no longer own oroccupy the
property. The MSHA and private lenders will share a first mortgage. A
City loan, if any, would be in second lien position. The MSHA requires
that each city and bank participating enter into the Intercreditor
Agreement attached to the Council Order. The New Neighbors Program could
be very useful to prospective buyers of the Randolph Drive / Maxwell Lane
surplus property.
Dep rtment H905
Manager's Convents:
City manager
Associated InfoxmatienQ�jot (ge6lA"AwIT-
Budget Approval:
Finance Director
Legal Approval:
City S icitor
Introduced For if Passage ❑ First Reading ❑ Referral !'
Paga�D£�
99-13
Ae®pwd to Councilor PAInar November 9, 1998
r CITY OF BANGOR
(TITLE.) (orb"Aothorimng Execution of hmrcreditor Agreement Maine State Housing...._
Authority- Home Mortgage Program -New Neighbors Program
By tM Gty Courwil of tha Cgly Of Relevant
ORDERED,
TUT
WHEREAS, The Maine Smte Housing Authority (MSHA) offers aNew Neighbors Program
designed to provide home ownership opportunities to first-time home buyers
who wish to purchase and rehabilitate existing 1 - 4 unit properties in Melee's
inner cities; and
WHEREAS, The New Neighbors Program has special financing Features that will allow home
buyers to flounce 100% of the purchase price and rehabilitation vests of an
existing home; and
WHEREAS, Eligible applicants as defined by the MSHA we those who have not lad an
ownership Interest in their principle residence in the post three years or who
have had an ownership interest in their principle residence the Nat three years,
but no longer owns or occupies the property; and
WHEREAS, The Program is being offered in Bangor, Portland and Lewiston; and
WHEREAS, The City may participate with the Maine State Housing Authority and private
lenders in making loans to eligible parents for the acquisition and rehabilitation
of I to 4 unit properties, with City participation approved by the City Council
Community and Economic Development Committee under the City's existing
Community Development Residential Rehabilitation Loan Program; and
WHEREAS, TheMaineState Housing Authority requires that each city and hank
participating enter into the Intercreditor Agreement attached hereto;
NOW, THEREFORE, BE IT ORDERED BY THE CITY COUNCIL OF THB CITY OF
BANGOR THAT the City Manager is hereby authorized, on behalf of the City of Bounce, in
execute an f rtacreditor Agreement with the Maine State Housing Authority, sentry ofwhich is
attached hereto, and with private lenders participator with the City of Bangor and the Maine
Sate Housing Authority under the New Neighbors Program.
IN CITY COUNCIL
November 9, 1998
Radon for Passage Nade & Seconded
Passed
CITY uk
99-13
ORDER
Title, Authorizing Execution of Inter-
xeditor Agreement - Maine State Rousing
Authority - Rome Mortgage Program - Nev
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Cowcilma
MAWE STATE HOUSING AUTHORITY 99-13
HOME MORTGAGE PROGRAM -NEW NEIGHBORS
Monson
•'
THIS WTERCREDITOR AGREEMENT is made as of f99_
between and among the MAINE STATE HOUSING AUTHORITY, a public body,
corporate and politic, and an instrunenseEry of the gone of Maine with its principal place of
business ut 353 Water Strew, Augusta, Maine 09330-M33 (herein Bled "MSHA-) and the
following lenders:
Name/Addreas of Bank:
(Incenafter called "Bank's; and
(hereiraRer caBed'Cityl.
WITNESSETH
WHEREAS, MSIdA, the Bank and the City intend to participate in a program (the
'New Neighbors Program-) designed by MSHA to provide financing for individuals who
purchase, rehabilicate aM reside in 14 unit properties lowed within economically chasresasd
areas in the City.
WHEREAS, as part of the New Neighbors Program, MSHA, the Bads and the City
may each make a Into to a qualifying individual(the 'Borrower). The MSHA lona will be
asocial by a mortgage (the "MSHA Mortgage's on the qualifying property (the Rroperty'�;
the Bank loan will be secured by a mortgage (the "Bank Mortgage's on the Property; and the
City loan will be secured by a mortgage (the "City Mortgage') on the Property.
WHEREAS, MSHA, Bank, and City recognize the need to cooperate in the
administration of each parry's none and mortgages (collectively the "Mortgagee") and desire to
enter into thus Intercreditor Agreement in order to define their respective rights and duties; and
m net forth the procedures which will be vasd on govern the adminixmtion of the Mortgages.
NOW THEREFORE, for valuable considmaion dere parties agree as follows:
1. Shared First Lim Position. The M3HA Mortgage and the Bank Mortgage shall
each constitsne a mortgage lien of equal priority on she Property, it being intended shut the
MSHA Mortgage and the Badr Mortgage shall be deemed to be delivered and worded
sisnultweornly,notwishstaading the time of recording of the vuwmenss. The Gry
Mortgage, Sway, shall be in second lien position. The partes shall it ]tide the following
reference to this Intercreditor Agreement in their respective Mortgages:
lgMP-IC New Neighbors
Page I of 5
'THE RIGHTS AND DUTIFB OF THE WITHIN MORTGAGE£ ARE SUBJECT TO
AN IYCERCREDITOR AGREEMENTAMONG THE MAWE SCATS HOUSING
AUTHORCIY("MSHA'), THE'I.ENDER-)AND THE
CITY OF (CI-IE'CITY-)DATED AND RECORDED IN
THE COUNTY REGISTRY OF DEEDS IN BOOK ,PAGE
In the everst there is a default under any of she Mor[ gaga, any exercise of remedies by one or
re of the parties &raw shad be for the equal and rzable benefit of 0 parties hems, and
any net recovery, thereby elecxed dial be divided between WHA, Bards and, if applicable,
City on aproma basis baud upon the duan respective outstanding principal balance of the
wtowed MSHA, Baul5120ifapplicable,Gty. lawthatthe BanlOs foregowg,aolely
for purpose of 9-A MRSA 5 t-202(9), the parties stipulate [het due Bank's moagage is a first
mortgage on she real <sare.
2. Cooperation Among Partio.Tothe fullest eaem possible, MSHA, Bank,
and, if appGable, City shad cotpeme in she joint admirdaatiov of the Mortgages in
accordance with standards and practices applicable to prudent mortgage lenders in the State of
Maine. WIVt has developed a New Neighbors Program Processing Guide (the 'Guidej
which provides guidelines for the origination of the loans and which g®eally describes
procedures for administering the New Neighbors Program. Each loan is subjx[ to the urns
of the Guide as in effect at the time of closing of she loan.
3. Administration of Rehabilitation Escrow, I City is participating as a lender in
connection with the loan to Borrower, Gty shad edrvwina the rehabilitation escrow
establishedfor. Borrower. If Cky is not a parddpam, Bmk shah establish and admiwster said
rehabilitation escrow. WHA, Bank, and ifapplicable, the City shall each have the right to
inspect all work and improvemears. Each d burawent from the rehabilitation escrow shall
be used to pay for eligible improvatmrs and shall be treated as a dkbursemem from each
party's loan proceed in proportion to the overall amount of Borrower's loan. Any balances
maiming in said escrow after the completion of the rehabilitation shad be used to paydown
the principal of the pardei respective nmrtgage notes.
4. Notice of Default. In the event MSHA. Book, and/or, if applicable, Gty,
shad notify the Borrower of a default by the Borrower under that party's loan docwnents, the
parry declaringa default shag amultooeoualy therewith provide a copy of such notice of
default to the other parties. If a default is declared while there is an outstanding balance in any
rehabilitation escrow, the parry admirdsterivg the rehabilitation escrow shall immediately
notify the other parties of such balance and, upon request, shall return any accounts held by it
that were contributed by the other parties. Any notice of "uh seal clearly identify the loan
as a'New Neighbors Program" lout, and shall be delivered according to the mahod described
in Paragraph 10 heccof.
5. Notice of Accelwtinm Right to Care Defaults. In the event MSHA, Back,
or, if applicable, Gty shall determine that it is m its bat interest as a prudent mortgage lender
to exercise one or more default remedies under said loan documents, including, but not limited
to, foreclosure of its mortgage on the Property, the party which has mode that deteman ation
shall give a least twenty (20) day's' written notice to the other parties of its intention to pursre
its default rights and recordist. At any time witbin this period, any other party hereto may,
but is not required w, cure said default by paying any amounts pan due, including interest or
latechases.
HMP -IC New Neighbors
Page 2 of 5
99-13
6.
Forucloamm If a determination is made by any pasty w foreclose ie; mortgage,
the foredomre action shall be conduaed u authorised or permitted by she laws then existing
in the Store of Maine or under Federal Law, including but not limited to the Multifamily
Mortgage Foredosnre Act of 1981, 12 U.S.C. S3701, as amended. The parties agree that the
mabod of foreclosure which shall be used shall be foreclosure by civil action pursuant to Title
14 M.ItS.A. S6321 m seq., as amended, or any mocessor mature, unless ell parties hereto agree
in writing that mother method may be mei. In my such Inveclomre proceeding, the
judgment of forecloaue and sale shall provide for the application of the proceeds of the
foreclosure sale to the indebtcdoas secured by the Mortgages in proportion to the outsmnduag
sums of the indebtedness behl by each lender, as evidenced by the respective notes.
any gad i Cos m 1 mn unven�
loan arty documents;
to prehaz it is mortgage
me advisable
iry h. ett makecumreal an ender its
lour de inswaa w or the ha mortgage axv homes
es o w prevent a om iin ro tax fon wisue,
provide im and foreclosure
the Property, em), been to our of pocket wide H mrmagrap with a
such assure mdforeclwure sale which but been wmmenced i provided b in sparagraph 5 hereof,
such aothe andborcooshall not besubjectorpro ns distribution,ben shall be reimbursed
prior p rtie distribution ce o any mcla ad a rosea coot ale. Each parry is mu to provide the
other parties with evidence of my rvch advance or con if reimbursement u caught.
S. ReleamInthe event the indebtedness held by MSHA, Bank, or, if applicable,
Gty, shall be eddied in bull by payment, prepayment: or by my other means, the parry
whose indebtedness bas been suisffed sbnll dindharge all its right, ude and intense in is
mortgage and such discharge shag be sufficient eviderwe than the parry providing the discharge
has no further rights or dudes under this agreement.
9. Termination.MSHA, the Bank and the City may each diswntinue
participation m the New Neighbors Program by giving notice to the other parties W days
prior to due of termination of participation. Such termination shall not re&ve my parry
from its responsibilities hereunder with respect to any, loan which it has pound or committed
to make.
to. Notices. Any notice permitted or required lame adershall he in writing and
shall be sent by first thea mad, postage prepaid to the following addresses for the respective
pmtiec
MSHA- Maim Store Housing Authority
Attention: New Neighbors Program Administrator
353 Water Street
Augustus, Maine 04330.1633
Bank-
aw-
The foregoing addresses may be chewed from time to time by written notice given by one
party, to the otter parties. All times specified shall son beerthetimeofreceiptofseidnotice.
-
b -IC New Neighbors
Page 3 of 5
11. No Reliance by Borrower. The Borrower shall have no right to rely upon any
agre marm,obligations, or procedures.a forth in this Iutercralitor Agremunt, the agreement
being solely for the benefit of MSI1A, Bank, and, B applicable, City.
12. Suucnors and Aliens This lntercreditor Agreement shall inure to the
benefit of and be binding upon the fortis hetero and their respective mocesson and assigns.
15.nreAgreem t. This agreement cmarus uthe entire agreement between
the parties with respect to this subject mean, supersedes all prior negotiations and
undaamdings between them, and shall not be mesal or amended, except by written
agreement signed by the Bank, MSHA and the Chy.
la. Choice of law. This mmtcreditor Agreement shall be constmei and enforced
in accordance with and governed by the laws of the Som of Maine.
IN WITNESS WFIERF.OF, this agreement has been a mooned as of the day fun above
By:
Witness Name
Is:
e
Witness
Name
Its
CITY:
By:
Name:
Witness its:
STATE OF MAINE
COUNTY OF ,199_
HMP -IC New Neighbors
Page 4 of 5
MAWE STATE HOUSING AUTHORITY 99-13
HOME MORTGAGE PROGRAM -NEW NEIGHBORS
Monson
•'
THIS WTERCREDITOR AGREEMENT is made as of f99_
between and among the MAINE STATE HOUSING AUTHORITY, a public body,
corporate and politic, and an instrunenseEry of the gone of Maine with its principal place of
business ut 353 Water Strew, Augusta, Maine 09330-M33 (herein Bled "MSHA-) and the
following lenders:
Name/Addreas of Bank:
(Incenafter called "Bank's; and
(hereiraRer caBed'Cityl.
WITNESSETH
WHEREAS, MSIdA, the Bank and the City intend to participate in a program (the
'New Neighbors Program-) designed by MSHA to provide financing for individuals who
purchase, rehabilicate aM reside in 14 unit properties lowed within economically chasresasd
areas in the City.
WHEREAS, as part of the New Neighbors Program, MSHA, the Bads and the City
may each make a Into to a qualifying individual(the 'Borrower). The MSHA lona will be
asocial by a mortgage (the "MSHA Mortgage's on the qualifying property (the Rroperty'�;
the Bank loan will be secured by a mortgage (the "Bank Mortgage's on the Property; and the
City loan will be secured by a mortgage (the "City Mortgage') on the Property.
WHEREAS, MSHA, Bank, and City recognize the need to cooperate in the
administration of each parry's none and mortgages (collectively the "Mortgagee") and desire to
enter into thus Intercreditor Agreement in order to define their respective rights and duties; and
m net forth the procedures which will be vasd on govern the adminixmtion of the Mortgages.
NOW THEREFORE, for valuable considmaion dere parties agree as follows:
1. Shared First Lim Position. The M3HA Mortgage and the Bank Mortgage shall
each constitsne a mortgage lien of equal priority on she Property, it being intended shut the
MSHA Mortgage and the Badr Mortgage shall be deemed to be delivered and worded
sisnultweornly,notwishstaading the time of recording of the vuwmenss. The Gry
Mortgage, Sway, shall be in second lien position. The partes shall it ]tide the following
reference to this Intercreditor Agreement in their respective Mortgages:
lgMP-IC New Neighbors
Page I of 5
'THE RIGHTS AND DUTIFB OF THE WITHIN MORTGAGE£ ARE SUBJECT TO
AN IYCERCREDITOR AGREEMENTAMONG THE MAWE SCATS HOUSING
AUTHORCIY("MSHA'), THE'I.ENDER-)AND THE
CITY OF (CI-IE'CITY-)DATED AND RECORDED IN
THE COUNTY REGISTRY OF DEEDS IN BOOK ,PAGE
In the everst there is a default under any of she Mor[ gaga, any exercise of remedies by one or
re of the parties &raw shad be for the equal and rzable benefit of 0 parties hems, and
any net recovery, thereby elecxed dial be divided between WHA, Bards and, if applicable,
City on aproma basis baud upon the duan respective outstanding principal balance of the
wtowed MSHA, Baul5120ifapplicable,Gty. lawthatthe BanlOs foregowg,aolely
for purpose of 9-A MRSA 5 t-202(9), the parties stipulate [het due Bank's moagage is a first
mortgage on she real <sare.
2. Cooperation Among Partio.Tothe fullest eaem possible, MSHA, Bank,
and, if appGable, City shad cotpeme in she joint admirdaatiov of the Mortgages in
accordance with standards and practices applicable to prudent mortgage lenders in the State of
Maine. WIVt has developed a New Neighbors Program Processing Guide (the 'Guidej
which provides guidelines for the origination of the loans and which g®eally describes
procedures for administering the New Neighbors Program. Each loan is subjx[ to the urns
of the Guide as in effect at the time of closing of she loan.
3. Administration of Rehabilitation Escrow, I City is participating as a lender in
connection with the loan to Borrower, Gty shad edrvwina the rehabilitation escrow
establishedfor. Borrower. If Cky is not a parddpam, Bmk shah establish and admiwster said
rehabilitation escrow. WHA, Bank, and ifapplicable, the City shall each have the right to
inspect all work and improvemears. Each d burawent from the rehabilitation escrow shall
be used to pay for eligible improvatmrs and shall be treated as a dkbursemem from each
party's loan proceed in proportion to the overall amount of Borrower's loan. Any balances
maiming in said escrow after the completion of the rehabilitation shad be used to paydown
the principal of the pardei respective nmrtgage notes.
4. Notice of Default. In the event MSHA. Book, and/or, if applicable, Gty,
shad notify the Borrower of a default by the Borrower under that party's loan docwnents, the
parry declaringa default shag amultooeoualy therewith provide a copy of such notice of
default to the other parties. If a default is declared while there is an outstanding balance in any
rehabilitation escrow, the parry admirdsterivg the rehabilitation escrow shall immediately
notify the other parties of such balance and, upon request, shall return any accounts held by it
that were contributed by the other parties. Any notice of "uh seal clearly identify the loan
as a'New Neighbors Program" lout, and shall be delivered according to the mahod described
in Paragraph 10 heccof.
5. Notice of Accelwtinm Right to Care Defaults. In the event MSHA, Back,
or, if applicable, Gty shall determine that it is m its bat interest as a prudent mortgage lender
to exercise one or more default remedies under said loan documents, including, but not limited
to, foreclosure of its mortgage on the Property, the party which has mode that deteman ation
shall give a least twenty (20) day's' written notice to the other parties of its intention to pursre
its default rights and recordist. At any time witbin this period, any other party hereto may,
but is not required w, cure said default by paying any amounts pan due, including interest or
latechases.
HMP -IC New Neighbors
Page 2 of 5
99-13
6.
Forucloamm If a determination is made by any pasty w foreclose ie; mortgage,
the foredomre action shall be conduaed u authorised or permitted by she laws then existing
in the Store of Maine or under Federal Law, including but not limited to the Multifamily
Mortgage Foredosnre Act of 1981, 12 U.S.C. S3701, as amended. The parties agree that the
mabod of foreclosure which shall be used shall be foreclosure by civil action pursuant to Title
14 M.ItS.A. S6321 m seq., as amended, or any mocessor mature, unless ell parties hereto agree
in writing that mother method may be mei. In my such Inveclomre proceeding, the
judgment of forecloaue and sale shall provide for the application of the proceeds of the
foreclosure sale to the indebtcdoas secured by the Mortgages in proportion to the outsmnduag
sums of the indebtedness behl by each lender, as evidenced by the respective notes.
any gad i Cos m 1 mn unven�
loan arty documents;
to prehaz it is mortgage
me advisable
iry h. ett makecumreal an ender its
lour de inswaa w or the ha mortgage axv homes
es o w prevent a om iin ro tax fon wisue,
provide im and foreclosure
the Property, em), been to our of pocket wide H mrmagrap with a
such assure mdforeclwure sale which but been wmmenced i provided b in sparagraph 5 hereof,
such aothe andborcooshall not besubjectorpro ns distribution,ben shall be reimbursed
prior p rtie distribution ce o any mcla ad a rosea coot ale. Each parry is mu to provide the
other parties with evidence of my rvch advance or con if reimbursement u caught.
S. ReleamInthe event the indebtedness held by MSHA, Bank, or, if applicable,
Gty, shall be eddied in bull by payment, prepayment: or by my other means, the parry
whose indebtedness bas been suisffed sbnll dindharge all its right, ude and intense in is
mortgage and such discharge shag be sufficient eviderwe than the parry providing the discharge
has no further rights or dudes under this agreement.
9. Termination.MSHA, the Bank and the City may each diswntinue
participation m the New Neighbors Program by giving notice to the other parties W days
prior to due of termination of participation. Such termination shall not re&ve my parry
from its responsibilities hereunder with respect to any, loan which it has pound or committed
to make.
to. Notices. Any notice permitted or required lame adershall he in writing and
shall be sent by first thea mad, postage prepaid to the following addresses for the respective
pmtiec
MSHA- Maim Store Housing Authority
Attention: New Neighbors Program Administrator
353 Water Street
Augustus, Maine 04330.1633
Bank-
aw-
The foregoing addresses may be chewed from time to time by written notice given by one
party, to the otter parties. All times specified shall son beerthetimeofreceiptofseidnotice.
-
b -IC New Neighbors
Page 3 of 5
11. No Reliance by Borrower. The Borrower shall have no right to rely upon any
agre marm,obligations, or procedures.a forth in this Iutercralitor Agremunt, the agreement
being solely for the benefit of MSI1A, Bank, and, B applicable, City.
12. Suucnors and Aliens This lntercreditor Agreement shall inure to the
benefit of and be binding upon the fortis hetero and their respective mocesson and assigns.
15.nreAgreem t. This agreement cmarus uthe entire agreement between
the parties with respect to this subject mean, supersedes all prior negotiations and
undaamdings between them, and shall not be mesal or amended, except by written
agreement signed by the Bank, MSHA and the Chy.
la. Choice of law. This mmtcreditor Agreement shall be constmei and enforced
in accordance with and governed by the laws of the Som of Maine.
IN WITNESS WFIERF.OF, this agreement has been a mooned as of the day fun above
By:
Witness Name
Is:
e
Witness
Name
Its
CITY:
By:
Name:
Witness its:
STATE OF MAINE
COUNTY OF ,199_
HMP -IC New Neighbors
Page 4 of 5
Personally appeared before me the above-named in his/her
opacity as of the Maine Stare Housing Authority and
acknowledged the above instrument to be his/her free act and deed N said rapacity and the
free as and deed of the Maine Stare Housing Authority.
Nosy Public/Attorney at Law
Comtviasion expire
'I.V97WOUi. m
COUNTY OF ,199_
Personally appeared before are the nbovevamed in his/her
capacity0 of and acknowledged the
above imvummt to be his/her free aet and deed in acid opacity and the free as and deed of
the City of
Notary Public/Attorney at Law
Commission expires:
SPATE OF MARIE
COUNTY OF ,199_
Personally appeared before me the abovenamed in his/her
capacity as of amdacknowledgedthe
above instrument to be his/her free act and deed in said opacity and the free xx and deed of
Name:
Notary Pu slic/Attorney a Law
Commaion expires
ITORC New Neighbors
Page 5 of 5