HomeMy WebLinkAboutAgenda 04-20-1999 - 8aORANGE COUNTY
BOARD OF COMMISSIONERS
Action Agenda
Item No. ~_
ACTION AGENDA ITEM ABSTRACT
Meeting Date: Apri120, 1999
SUBJECT: CDBG Program -Loan Subordination
DEPARTMENT: Housing/Community Development
PUBLIC HEARING: (Y/l~
ATTACHMENT(S):
Subordination Agreement
INFORMATION CONTACT:
Taza L. Fikes
TELEPHONE NUMBERS: - - ezt. 2490
Hillsborough 732-8181
Chapel Hill 968-4501
Durham 688-7331
Mebane 227-2031
PURPOSE: _-
To approve the execution of a Loan Subordination Agreement under the CDBG Program.
BACKGROUND:
The 1993 CDBG Program provided funding for a second mortgage program which enabled eligible
first-time homebuyers in the County to purchase houses in the Magnolia Place subdivision.. The
amount of the second mortgages was $12,500 and aze secured by a Deed of Trust.
Presently, a homebuyer who received a second mortgage in the amount of $12,500 wants to
refinance the principal amount of the first mortgage to obtain a better interest rate. of 5.250%
initially for an adjustable rate mortgage. A review of the transaction reveals that no money will be
taken out of the deal by the homebuyer. The County is being asked to subordinate its second
mortgage interest to the new mortgage. In order to facilitate this refinancing, a Subordination
Agreement must be executed by the Chair of the Board of County Commissioners. The County's
lien position will not be materially changed after the proposed refinancing. The lower interest rate
should benefit the homeowner and strengthen the County's security interest in the property.
The County Attorney has reviewed and approved the Subordination Agreement.
The Board of County Commissioners has approved similaz subordination requests in the past year.
Many first-time homebuyers, like all homeowners, have sought to reduce the interest rate on their
home mortgages during this current period of low mortgage interest rates.
FINANCIAL IMPACT:
None
RECOMMENDATON(S):
The Manager recommends authorizing the Manager and the County Attorney to execute the Loan
Subordination Agreement.
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North Carolina
Orange County
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT, made and entered into this day of
March, 1999, by and between GEOFFREY GLEDHILL, acting as Trustee, and ORANGE
COUNTY for the ORANGE COUNTY DEPARTMENT OF HOUSING AND COh~IlVIUNITY
DEVELOPMENT, parties of the first part, and JAMES C. BLAINE, Trustee, and STATE
EMPLOYEES' CREDIT UNION, parties of the second part;
WITNESSETH:
WHEREAS, the parties of the first part aze the trustee and noteholder under a deed of
trust executed by MICHAEL G. WOOD AND DOROTHY H. WOOD, recorded in Book 1460,
Page 296 in the Orange County Registry, NC; and
WHEREAS, said parties of the second part aze trustee and noteholder under a certain
deed of trust securing an indebtedness in the principal sum of Eighty Three Thousand Dollars
($83,000.00), such indebtedness accruing interest at the initial interest rate of Five and One-
Quarter per cent (5.250%) per annum, executed by Michael G. Wood and Dorothy H. Wood,
dated Mazch 16, 1999, and recorded in Book 1893 , at Page 539 in the Office of the Register
of Deeds for Orange County, North Carolina, describing the same real property as that included
in the aforesaid deed of trust recorded in Book 1460, Page 296:
NOW THEREFORE, the parties of the first part, in consideration of the sum of Ten
Dollars ($10.00) and other good and valuable consideration to it paid, the receipt of which is
hereby acknowledged, do covenant and agree to and with the parties of the second part, its
successors and assigns, that the lien of the aforesaid deed of trust recorded in Book 1460, Page
296 in their favor shall be and remain subordinate, junior, and inferior at all times to the lien of
the said deed of trust in favor of the parties of the second part, recorded in the Office of the
Register of Deeds for Orange County, North Carolina, as to the following interest in real
property described as follows:
BEING all of Lot 18, MAGNOLIA PLACE SUBDIVISION, according to that plat
and survey thereof recorded in Plat Book 73, Page 47, Orange County Registry, to which
plat reference is hereby made for a more particular description of the same.
Said lien shall remain subordinate, junior, and inferior thereto, notwithstanding any
extension of time for the payment of the indebtedness secured thereby or any inaction by or
failure on the part of the parties of the second part to assert any legal rights available to them in
connection with said deed of trust and the note secured thereby; and
The parties of the first part release, remise, and forever quitclaim unto the parties of the
second part, their successors and assigns, any rights they may have under the aforesaid deed of
trust as to the property described hereinabove to the extent only that the same aze senior to those
of the parties of the first part to the end that said rights shall be and remain subordinate to the
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rights of the parties of the second part under the above referred to deed of trust, provided in all
cases that the rights of the parties of the first part on account of its deed of trust shall be and
remain in full force and effect except as the same may be subordinated herein.
IN WITNESS WHEREOF, the parties have caused this instrument to be executed
on this the day and yeaz first above written.
TRUSTEE:
(SEAL)
Geoffrey Gledhill, Trustee
NOTEHOLDER:
Orange County for the Orange County Department of
Housing and Community Development
CORPORATE SEAL
BY~ (SEAL)
John M. Link, Jr.
Orange County Manager
ATTEST:
Beverly A. Blythe, Clerk to the Board
Of Commissioners
NORTH CAROLINA -- COUNTY
I, . a Notary Public of the County and State aforesaid, do
hereby certify that ,Trustee, personally came before me this
day and acknowledged the execution of the foregoing instrument.
Witness my hand and official stamp this day of , 1999.
My commission expires:
Notary Public
...................................................................................
NORTH CAROLINA -- COUNTY
I, , a Notary Public of the County and State aforesaid, do hereby
certify that Beverly A. Blythe personally came before me this day and acknowledged that she is
Clerk to the Board of Commissioners of Orange County, and that by authority duly given and as
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the act of said County, the foregoing instrument was signed in its name by John M. Link, Jr., the
Orange County Manager, and attested by her as Clerk to said Board of Commissioners.
Witness my hand and official stamp this day of , 1999.
Notary Public
My commission expires:
. .................................................................................
NORTH CAROLINA -- COUNTY
The foregoing certificate of , a Notary Public of the
County of , State of , is certified to
be correct.
This day of
Register of Deeds
By:
Deputy Assistant