CITY OF COMMERCEAGENDA REPORTCITY OF COMMERCEAGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
CITY OF COMMERCE
AGENDA REPORT
TO: Honorable Successor Agency
FROM: City Manager
SUBJECT: Resolution of the Successor Agency of the Commerce Community Development Commission to Subordinate the Regulatory Agreement, Deed of Trust and Promissory Note Previously Entered into between the Former Redevelopment Agency and Luis M. Mendez for the Property Located at 5812 Bartmus Street in the City of Commerce Meeting Date: January 25, 2022
RECOMMENDATION:
Approve and adopt the Resolution of the Successor Agency to the Commerce Community Development Commission to subordinate the regulatory agreement, deed of trust and promissory note previously entered between the former redevelopment agency and Luis M Mendez for the property located at 5812 Bartmus Street in the City of Commerce.
BACKGROUND & ANALYSIS:
On February 15, 2011, the Community Development Commission performed a lottery to select applicants to participate in the City’s First-Time Homebuyer Program during Fiscal Year 2010/2011. Luis M Mendez was one of the participants selected from a pool of 19 qualified applicants.
The First-Time Homebuyer Program offered up to $150,000 towards a down payment for low-to-moderate-income persons interested in purchasing their principal residence in the City of Commerce, but were unable to secure sufficient down-payment to purchase a residence. As part of the program, payments on the loans were deferred for a period of 45 years and pardoned as long as the recipient homebuyer stayed on the property and did not sell or rent the residence. Program loans were evidenced by a promissory note secured by a second deed of trust.
On April 22, 2011 a Regulatory Agreement and Deed of Trust Securing Promissory Note were executed between the Community Development Commission and Luis M Mendez to secure a Promissory Note in the amount of $114,930.72.
Recently, Fidelity National Title Company the holder of the first loan reached out to the City about their intent to refinance the current loan for the purpose of lowering their interest rate, without a “cash out” option. In order for Mr. Mendez to refinance, they need the City of Commerce to subordinate the Regulatory Agreement, Deed of Trust and Promissory Note recorded against the property.
To subordinate a document simply means that the Regulatory Agreement and Deed of Trust Securing Promissory Note will change priority position in order to allow the new loan to be recorded against the property. This will allow Mr. Mendez to refinance his property to lower the interest rate and shorten the term to 15 years, while retaining the provisions outlined in the Regulatory Agreement and Deed of Trust Securing Promissory Note. Therefore, the City’s Regulatory Agreement and Deed of Trust Securing Promissory Note will not be impacted with this action and will continue to run with the land until the 45-year period expires.
CONCLUSION:
Staff is recommending the Successor Agency make a finding that the Regulatory Agreement, Deed of Trust and Promissory Note entered between the former Redevelopment Agency and Luis M. Mendez on April 22, 2011 can be subordinated in conjunction with the request to refinance the property located at 5812 Bartmus in the City of Commerce.
ALTERNATIVES:
Approve Staff recommendation and Resolution;
Deny Staff recommendation; or
Provide Staff with further or modified direction.
FISCAL IMPACT:
Approval of this resolution can be carried out without any fiscal impact to the City’s General Fund.
RELATIONSHIP TO STRATEGIC GOALS:
The issue before the Council is applicable to the following Council’s strategic goal: Guiding Principle 4: Support and evaluate community services, programs and events that promote healthy and quality lifestyles for our residents. Enhance public safety and social services through innovative programs that meet the needs of the residential and business communities.
Respectfully submitted by: Edgar P. Cisneros, City Manager Recommended by: Jose D. Jimenez, Director Economic Development and Planning Reviewed by: Vilko Domic, Assistant City Manager
Approved as to form, Noel Tapia, City Attorney