HomeMy WebLinkAboutAgenda - 05-06-1998 - 8ii
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ORANGE COUNTY
BOARD OF COMMISSIONERS
Action Agenda
Item No. S- i
ACTION AGENDA ITEM ABSTRACT
Meeting Date: May 6, 1998
SUBJECT: HOME Program -Subordination Agreement
DEPARTMENT: Housing and Community Development PUBLIC HEARING: (Y/N) ;'v
BUDGET AMENDMENT: (Y/N) >~.,«
ATTACHMENT(S): INFORMATION CONTACT:
Subordination Agreement
Tara L. Fikes
TELEPHONE NUMBERS: - -eat. 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 HOME Program.
BACKGROUND:
The 1992 HOME Program provided funding for a second mortgage program which enabled eligible
first-time homebuyers in the County to purchase existing townhouses and condominiums. The
amount of the second mortgages ranged from $12,000 to $15,000 and are secured by a Deed of
Trust.
Presently, a homebuyer who received a second mortgage in the amount of $15,000 wants to
refinance the principal amount of the first mortgage, which has a current interest rate of 9.375% for
thirty years, for a better rate at 7.75% for fifteen years. A review of the transaction reveals that no
money will be taken out of the deal by the homebuyer, although the principal amount of the loan will
be $2,500 more than is owing on the present loan refinanced. 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 and shorter repayment period should benefit the homeowner and strengthen the
County's security interest in the property.
The County Attorney has reviewed and approved the Subordination Agreement.
RECOMMENDATION(S):
The Manager recommends authorizing the Chair of the Board to execute the Loan Subordination
Agreement.
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Prepared by
and return to: William D. Bernard, Brown & Bunch, 101 N.
Columbia Street, Chapel Hill, NC 27516
STATE OF NORTH CAROLINA
COUNTY OF
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT is executed and effective as of
this day of
19 by and among Geoffrey E.
Gledhill ("Trustee"), and Orange County, North Carolina
("Beneficiary"), the present legal holder and owner under that
certain Deed of Trust and Note executed by Sandra F. Brooks, as
Grantor(s), on January 13, 1998, and being recorded in Book 1319,
Page 410, Orange County Registry, ("the Deed of Trust") conveying
and encumbering certain real property located in Orange County,
North Carolina described therein, to which Deed of Trust
reference is hereby made for a more accurate description of the
real property therein conveyed and encumbered.
FOR and in consideration of the sum of Ten Dollars ($10.00),
in hand paid, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
Beneficiary has, and by these presents does, subordinate the
priority of such Deed of Trust and authorize the Trustee to join
in such subordination, thereby making it secondary in priority to
that certain Deed of Trust from
Trustee for
securing a principal indebtedness of
1
to
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J
3
($ ) and being recorded in Book Page ,
County Registry.
2N WITNESS WHEREOF, Orange County, North Carolina,
Beneficiary, and Geoffrey E. Gledhill, Trustee, have hereunto
affixed their respective hands and seals as of the day and year
first above written.
ORANGE COUNTY, NORTH CAROLINA
By
Margaret W. Brown, Chair
Orange County Board of
Commissioners
ATTEST:
Beverly A. Blythe, Clerk to
the Board of Commissioners
[SEAL]
(SEAL)
Geoffrey E. Gledhill, Trustee
NORTH CAROLINA
ORANGE COUNTY
I, a Notary Public of the County and State aforesaid,
certify that Beverly A. Blythe personally came before me this day
and acknowledged that she is Clerk to the Board of Commissioners
for Orange County and that by authority duly given and as the act
of said County, the foregoing instrument was signed in its name
by the Chairman of said Board of Commissioners and attested by
her as Clerk to said Board of Commissioners.
Witness my hand and official stamp or seal, this the
day of 19
Notary Public
My commission expires:
(notary seal]
2
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4
NORTH CAROLINA
ORANGE COUNTY
I, a Notary Public of the County and State aforesaid,
certify that Geoffrey E. Gledhill, Trustee, personally appeared
before me this day and acknowledged the execution of the
foregoing Subordination Agreement.
Witness my hand and official stamp or seal, this the
day of 19
Notary Public
My commission expires:
(notary seal]
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brooks.agt
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