HomeMy WebLinkAboutReso 91-1987 RESOLUTION N0..~91-87~
CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA
A RESOLUTION AUTHORIZING AN AGREEMENT
FOR PROPERTY REHABILITATION LOAN SERVICES
WHEREAS, on December 10, 1986 the City Council approved rehabilitation
program guidelines for projects to be undertaken in connection with the City's
Community Development Block Grant (CDBG) Housing Rehabilitation Program and
the HUD Rental Rehabilitation Program; and
WHEREAS, the City also desires to take advantage of the Department of
Housing and Urban Development's Section 312 Rehabilitation Program; and
WHEREAS, it is desirable to enter into a service agreement with an escrow
corporation for loan document preparation, fund disbursement, and financial
management services in order to operate the rehabilitation programs; and
WHEREAS, the proposal received from United State Escrow has been deter-
mined to provide the best available services for the program needs;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South
San Francisco that the Agreement attached as Exhibit "A" is hereby approved
and the City Manager is authorized to execute the Agreement~
I hereby certify that the foregoing Resolution was regularly introduced
and adopted by the City Council of the City of South San Francisco at a
regular meeting held on the~22nd..~day of July , 198:~._~_, by
the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
.Councilmembers John '!Jack" Drago,.Richard A..Haffey, Gus ~ ]
Nicolopulos, Roberta.Cerri Teglia, and Mark N. Addiego
None
None
None
EXHIBIT A TO RESOLUTION NO. 91-87
SERVICE AGREEHENT BY ~dqDB~EN THE CITY OF SOUTH SAN [~19JtNCISCO
~ UNITED STATES ESCRO#, INC.
THIS AGREEMENT entered into as of the 22nd day of
July 19 87 , by and between the CITY OF SOUTH SAN
FRANCISCO a municipal corporation, (hereinafter referred to
\
as the "CITY") and UNITED STATES ESCROW, INC., a Corporation
organized and existing under the laws of the State of
California (hereinafter referred to as the "CONTRACTOR").
WITNE S SETH
WHEREAS, a property improvement loan program is being
undertaken by the CITY utilizing funds provided by the United
States Department of Housing and Urban Development, and
WHEREAS, the CITY desires to engage the CONTRACTOR to
render services in connection with loans made by the CITY for
property improvements within the CITY, and
WHEREAS, the CONTRACTOR represents that it is qualified
to perform services under this contract;
NOW, THEREFORE,
AGREE AS FOLLOWS:
THE
PARTIES HERETO DO HEREBY MUTUALLY
S~OPE OF SERVICES
When and as requested in writing by the CITY, the
CONTRACTOR shall provide escrow and related services for
property improvements in connection with loans made by the
CITY to homeowner and/or property/business owners for the
improvement of the property. Service shall include, but
shall not be limited to, the areas listed below.
I. REhABILITATION/REVITALIZATION SERVICES
A. LOAN DOCUMENT PREPARATION
In connection with each loan application, CONTRACTOR will
provide on request from the CITY the following items:
a. Credit Report
b. Applicable PIRT or Title Report
Upon loan approval the CITY will forward to the
CONTRACTOR a document request memorandum containing
required information to complete the preparation of loan
documents. In accordance with the document request
memorandum, the CONTRACTOR will prepare and forward to
the CITY the following documents:
a. Control Instructions
b. Promissory Note
c. Notice of Recision
d. Deed of Trust or other securing document
e. Request for Notice (when applicable)
f. Truth in Lending Disclosure Statement
g. Insurance application form to up-grade
policy (when applicable)
h. Other documents agreed to by CITY and CONTRACTOR
insurance
Upon receiving prepared documents, the CITY, in
coordination with the borrower, will execute documents
referred to above. The CITY will then return to the
CONTRACTOR the following original signed documents:
a. Control Instructions
b. Deed of Trust
c. Request for Notice
d. Insurance Application
e. Agreement for Rehabilitation (copy)
f. Loan Proceeds
Once signed, the Deed of Trust and any Request for Notice
will be sent by the CONTRACTOR to the County for
recording.
B. FUND DISBURSEMENT SERVICES
Upon loan approval the CITY shall send loan proceeds
completed Control Instructions to the CONTRACTOR.
Control Instructions shall include the following data:
a. Owner(s) name
and
The
3
b. Contractor(s) name
c. Job site address
d. Dollar amount of funds being escrowed
e. Instructions on how funds are to be disbursed
f. Original signatures of Owner and CITY
Representative or Agent
When and as requested in writing by the CITY, the
CONTRACTOR shall provide check disbursements to parties
designated by CITY in connection with loans made by the
CITY or its Agent for property improvement.
Written
ment Authorization containing information regarding
amount of disbursement, the parties to be paid,
contain signatures of CITY representatives authorized
request disbursements.
instructions shall be in the form of a Disburse-
the
and
to
Upon receipt of Disbursement
CONTRACTOR shall identify and
Authorization as follows:
Authorization, the
verify the Payment
a. Amount requested is available
b. Total loan amount equals amount escrowed
c. Owner's and CITY Representative's signatures are
the same as on the original escrow instructions
St
Upon the proper verification, the CONTRACTOR shall pre-
pare a check for the amount shown on the payment authori-
zation and shall send the check to the Agency.
4
At the request of the CITY, CONTRACTOR shall hold a
retention fund for up to 30 days after recording of the
Notice of Completion. CONTRACTOR shall record the Notice
of Completion with the County.
C. LOAN COLLECTION SERVICES
The CITY will provide necessary loan information (loan
terms, due dates, borrower's name and address etc.) to
CONTRACTOR to activate account.
2. The CONTRACTOR will notify the borrower(s) in writing
that all loan repayments shall be made to the CONTRACTOR.
At the request of the CITY, the CONTRACTOR will establish
an impound account for each borrower for payment of
property taxes and/or insurance premiums pending on the
property securing the loan.
®
The CONTRACTOR will collect all loan payment proceeds
received and forward to the CITY, less any authorized
deductions. Once a month, the CONTRACTOR will provide to
the CITY a status report of collection accounts showing
payments made and remaining balance.
Where collection of regular monthly payments is required,
the CONTRACTOR will provide borrower with monthly notices
indicating the total amount due and payable. Collection
5
proceeds are forwarded to the CITY along with a monthly
status report of collection accounts. The CONTRACTOR
will hold as a reserve 20% of one month's payment for
check assurance·
The CONTRACTOR will notify the borrower in writing of
delinquent payments at intervals of fifteen (15), thirty
(30) and sixty (60) days past the payment due date. Upon
issuance of such sixty (60) day notice no further action
shall be required of the CONTRACTOR with respect to the
delinquent account unless otherwise instructed in writing
by the CITY. The CONTRACTOR shall begin foreclosure
proceedings if requested by the CITY.
CONTRACTOR shall assess the borrower a late charge of six
percent (6%) of the payment amount for payments more than
ten (10) days late.
The CONTRACTOR shall process and record a Substitution of
Trustee and Full Reconveyance at borrower's expense, upon
loan satisfaction or when property is sold.
D. COMPUTER ACCOUNTING SERVICES
The CONTRACTOR shall supply to the CITY a monthly
computer printout of all transactions completed to date
and the balances remaining in each account.
E. MAINTENANCE OF FILES AND AVAILABILITY OF DATA
CONTRACTOR
lished under the
period of five
provisions of this
(5) years after the
shall maintain records of all accounts estab-
Agreement for a
closing of each
account. CONTRACTOR shall, upon request and within
thirty (30) days of such request, make available all
records, financial and otherwise, dealing with its
activities performed pursuant to the provisions of this
Agreement to authorized auditors and monitors of the
CITY or the United States Department of Housing and Urban
Development.
II. RENTAL RE~%BILITATION SERVICES
A. CASH MANAGEMENT DEPOSITORY SERVICES
1 . The
CONTRACTOR shall establish a separate Rental Reha-
depository account with a local financial
of CONTRACTOR'S choice for receipt
funds received from HUD. Funds shall
HUD Cash Management System and disbursed without delay by
CONTRACTOR to payees upon receipt of the proper disburse-
ment authorizations from the CITY.
bilitation
institution and
deposit of be
received via automatic transfers as required under the
B. ACCOUNT ACTIVATION AND FUND DISBURSEMENT SERVICES
Upon
loan
funds
CONTRACTOR. The
following data:
loan
proceeds or other non-Rental Rehabilitation
and completed Control Instructions to
Control Instructions shall include
approval the CITY shall send private sector
CITY
the
the
a. Owner(s) name
b. Contractor(s) name
c. Job site address
d. Dollar amount of funds being escrowed along with
the participation breakdown in dollar amounts of
non-Rental Rehabilitation and Rental Rehabilita-
tion program funds
e. Instructions on how funds are to be disbursed
f. Original signatures of Owner and CITY
Representative or Agent
When and
CONTRACTOR
designated
as requested in writing by the CITY, the
shall provide check disbursements to parties
by the CITY in connection with loans made by
the CITY or its Agent for property improvements.
Written instructions shall be in the form of a Disburse-
ment Authorization containing information regarding the
amount of disbursement, the parties to be paid, and shall
contain original signatures of CITY Representatives
authorized to request disbursements.
8
Each Disbursement Authorization submitted by the CITY to
the CONTRACTOR shall indicate what portion of the
disbursement is to be drawn from non-Rental Rehabilita-
tion funds and what portion to be drawn from Rental
Rehabilitation funds. A copy of the HUD Rental Rehabili-
tation payment voucher shall be sent to the CONTRACTOR by
the CITY along with the Disbursement Authorization in
cases where monies are to be drawn from Rental Rehabili-
tation funds (unless Item D4 of this Agreement applies).
Upon receipt of Disbursement Authorization and HUD pay-
ment voucher (if required), the CONTRACTIR shall identify
and verify the payment authorization as follows:
Se
Amount requested is available (including any
necessary HUD automatic transfer deposits as
indicated by the submitted HUD payment
voucher)
Owner's signature(s) are the same as on the
original escrow instructions
CITY Representative's signature(s) are the
same as on the original escrow instructions
or on an approved signature list of those
Representatives having the authority to
authorize disbursements
If there is a delay in the CONTRACTOR receiving HUD automa-
tic transfers, then at the CITY'S request, the CONTRACTOR
shall draw available monies from project non-Rental
Rehabilitation funds to pay without delaying Rental
Rehabilitation drawdown requests. The CONTRACTOR shall
Co
then reimburse the non-Rental Rehabilitation fund
monies disbursed in covering Rental Rehabilitation
drawdowns when HUD fund transfers are received.
those
fund
Upon the proper verification, the CONTRACTOR shall pre-
pare a check(s) for the amount shown on the payment
authorizations and shall send the check(s) to the CITY.
At the request of the CITY, CONTRACTOR shall hold a
retention fund for up to 30 days after recording of the
Notice of Completion. CONTRACTOR shall record the Notice
of Completion with the County.
HUD RENTAL REHABILITATION/CASH MANAGEMENT
COMPLIANCE ACCOUNTING
As required under HUD guidelines, CONTRACTOR shall maintain
separate escrow accounting records of Rental Rehabilitation
and non-Rental Rehabilitation funds. Separate accounting
records for non-comingled non-Rental Rehabilitation and
Rental Rehabilitation program funds will show receipt,
disbursement and running balance entries for each project.
Accounting information and records will be available to the
CITY during project rehabilitation and will be submitted to
the CITY at project completion.
At the beginning of each project, the CONTRACTOR shall
forward to HUD Central the project Pre-Rehabilitation
Report upon completion by the CITY.
10
Upon receipt of disbursement authorization and copy of
HUD payment voucher, the CONTRACTOR shall forward voucher
to HUD Central prior to next request for Rental Rehabili-
tation program funds. Copies of payment voucher as well
as disbursement authorization will be kept by CONTRACTOR
in a permanent project file.
CONTRACTOR shall submit copy of the monthly reconcilia-
tion of program activity to HUD Central as required under
HUD Rental Rehabilitation guidelines.
CONTRACTOR shall submit Project Completion Report to HUD
Central within ninety (90) days of rehabilitation comple-
tion and will retain a copy of the report in a permanent
project file.
De
ADDITIONAL HUD RENTAL REHABILITATION ADMINISTRATIVE
AND COMPLIANCE SERVICES
Upon receipt of Control Instructions from the CITY, the
CONTRACTOR shall contact HUD Central Office of Administra-
tion to set up a new Rental Rehabilitation project account.
The CONTRACTOR will be authorized with the proper HUD
security clearance to gain access to HUD's Cash Management
Information System required to set up new projects and
request drawdowns. The CONTRACTOR will transmit to HUD
Central, the information required to have the appropriate
amount of Rental Rehabilitation funds allocated for the
project.
11
Upon receipt of a disbursement authorization from the CITY,
the CONTRACTOR shall contact HUD Central to make the
appropriate drawdown request of Rental Rehabilitation fund
monies as authorized by the CITY.
submit the required project data
voucher number, amount of request,
The CONTRACTOR shall
(i.e. project number,
type of draw, dates of
construction, etc.) to obtain drawdown approval.
Approved drawdowns will be automatically transferred by
HUD Central to CONTRACTOR'S depository account and
disbursed by CONTRACTOR upon receipt (per Section II of
this Agreement).
Also upon receipt of a disbursement authorization from the
CITY, the CONTRACTOR shall prepare a payment voucher for
the amount requested from the Rental Rehabilitation fund.
Payment vouchers required by HUD as a written follow-up
document to the drawdown request, will be assigned a
document number and submitted to HUD in sequential order
for accountability.
Ee
RECONCILIATION OF RENTAL REHABILITATION
DEPOSIT ACCOUNT ACTIVITY
The CONTRACTOR shall prepare a monthly reconciliation of
HUD's monthly bank disbursement report with the Rental
Rehabilitation depository account activity for all HUD
automatic transfers and disbursements. A Rental Reha-
bilitation depository statement of account along with
12
copies of deposit receipts, payment vouchers, and checks
will be attached to the reconciliation statement.
The CONTRACTOR shall submit the prepared monthly reconci-
liation to the CITY as well as HUD Central as required.
F. MAINTENANCE OF PERMANENT PROJECT FILES
CONTRACTOR shall compile all pertinent project data into a
permanent file for CITY and HUD auditing. Each project
file shall contain copies of all deposits, checks, payment
vouchers, disbursement authorizations, pre-rehabilitation
and project completion reports and separate accounting
statements of non-Rental Rehabilitation and Rental
Rehabilitation fund activity.
As required by HUD,
show that:
project files will be prepared to
At no time was there a comingling of
Rehabilitation funds with private or
Agency funds.
Rental
other
At no time did draws on Rental Rehabilitation
funds exceed draws on non-Rental Rehabilita-
tion funds.
G. COMPUTER ACCOUNTING SERVICES
CONTRACTOR shall supply to the CITY a monthly computer
print-out of all transactions completed to date and the
balance remaining in each account.
13
H. MAINTENANCE OF FILES AND AVAILABILITY OF DATA
CONTRACTOR shall maintain records of all accounts estab-
lished under the provisions of this Agreement for a
period of five (5) years after the closing of each
account. CONTRACTOR shall, upon request and within
thirty (30) days of such request, make available all
records, financial and otherwise, dealing with its
activities performed pursuant to the provisions of this
Agreement to authorized auditors and monitors of the
CITY or the United States Department of Housing and Urban
Development.
III. SECTION 312 RE~%BILITATION LOAN SERVICES
SECTION 312 LOAN PACKAGING AND
UNDERWRITING ANALYSIS SERVICES
In the event the CITY wishes to package and underwrite
a loan under the Section 312 Rehabilitation Loan Program,
the CITY shall submit to CONTRACTOR a 312 Loan
Packaging Request for Preliminary Report and completed
loan application on HUD Form 6230. CONTRACTOR will be
responsible for ordering the following:
1. Employment verification
2. Income verification
3. Deposit verification
4. Credit history
14
Upon receipt of above reports, CONTRACTOR will issue to
CITY a letter of favorable risk or questionable risk.
If borrower is favorable risk, CONTRACTOR will continue
to package loan. If borrower is questionable risk,
CONTRACTOR will discontine packaging loan until letter of
decision to continue has been received from the CITY.
Upon receipt of request to continue packaging from CITY
or in view of preliminary favorable risk, CONTRACTOR will
order all additional reports necessary to provide CITY
with data necessary for CITY to make a final
underwriting decision.
Upon review of all reports and documents, CONTRACTOR will
issue to Agency an underwriting analysis along with all
supporting documents. For loans submitted on HUD
Application Form 6230, CONTRACTOR will analyze
Affordability, Credit History, Value of the Security, and
Scope of Rehabilitation.
B. LOAN DOCUMENT PREPARATION
Upon loan approval the CITY will forward to the
CONTRACTOR a document request memorandum containing
required information to complete the preparation of loan
documents. In accordance with the document request
memorandum, the CONTRACTOR will prepare and forward to
the CITY the following documents:
15
a. Control Instructions
b. Project Set Up Form
c. Notice of Right to Cancel
d. Repayment Schedule
e. Truth in Lending Disclosure Statement and
Amount Financed Itemization (two copies)
f. Promissory Note and Risk Premium Rider
g. Security Instrument
h. Rehabilitation Loan Agreement
i. Written opinion of Public Body Counsel (form
letter provided for Agency Counsel's signature)
j. Insurance Application Form(s) to upgrade
Insurance (when applicable)
k. Post Settlement Transmittal Letter (two copies)
Upon receiving prepared documents, the CITY, in
coordination with the borrower, will execute documents
referred to above. The CITY will then return to the
CONTRACTOR the following:
a. Control Instructions (original)
b. Promissory Note and Risk Premium Rider (original)
c. Security Instrument
d. Rehabilitation Loan Agreement (original)
e. Completed Insurance Application or certified copy
of Insurance Policy and copies of most recently
paid tax bills
f. Opinion of Public Body Counsel
16
g. Copy of Application (HUD Form 6230)
h. Truth in Lending Disclosure Statement (original)
i. Notice of Right to Cancel (original)
j. Post Settlement Transmittal Letter
k. Check for application fee and check for taxes
and insurance escrow deposit (if not part of
loan proceeds)
1. Additional public or private funds required for
rehabilitation
The executed Promissory Note, Security Instrument, and
Rehabilitation Loan Agreement will be sent by CONTRACTOR
to the County for recording.
Following loan settlement, CONTRACTOR will transmit loan
documentation to the Master Servicer. Transmittal
documents include:
a. Post Settlement Transmittal Letter (two copies)
b. Promissory Note and Risk Premium Rider
c. Security Instrument (original)
d. Rehabilitation Loan Agreement (original)
e. Title evidence
f. Check for application fee or statement that
application provides for deduction from loan
proceeds
g. Memorandum of Insurance or certified copy of
insurance policy and copies of most recently
paid tax bills
h. Opinion of Public Body Counsel
17
i. Copy of Application (HUD Form 6230)
j. Servicer loan set-up and additional
information form
k. Truth in Lending Disclosure Statement (original)
1. Notice of Right to Cancel
m. Check for taxes and insurance escrow deposit
(if not part of the loan proceeds)
CONTRACTOR will order upgraded insurance,
loss payee.
naming HUD as
C. SECTION 312 CASH MANAGEMENT SERVICES
1. CASH MANAGEMENT DEPOSITORY SERVICES
In the event the CITY makes a loan under the Section
312 Rehabilitation Loan Program, the CONTRACTOR will
establish a separate Section 312 depository account with
a local financial institution of its choice. The
financial institution shall be federally insured and be
a member of the Automated Clearing House. Funds shall be
received via the Automated Clearing House System as
required under the HUD Cash Management System and
disbursed without delay by CONTRACTOR to payees upon
receipt of the proper disbursement authorizations from
the CITY. If additional private or public funds will be
used to supplement a Section 312 loan, a separate sub-
escrow account will be maintained for those monies.
18
9. ~CCOUNT ~CTIVATXON ~ND FUND DXSBI]RS~
OPTION A -- MULTIPLE DISBURSEMENTS & DRAWDOWNS
a®
Upon loan approval and following project set up with
the Cash Management Contractor by authorized HUD
field office personnel, CITY shall forward
completed Control Instructions and any public or
private funds to CONTRACTOR. The Control
Instructions shall include the following data:
1) Owner(s) name
2) Contractor(s) name
3) Job site address
4) Dollar amount of funds being escrowed along
with the participation breakdown in dollar
amounts of non-Section 312 and Section 312
program funds when applicable
5) Instructions on how funds are to be disbursed
6) Original signatures of Owner, Construction
Contractor, and City Representative or Agent
0
CONTRACTOR will be authorized through the HUD office
of Information Policies and Systems to gain access
to the HUD Cash Management Contractor to request
drawdowns.
Upon receipt of a disbursement authorization by
CITY and
signature
Contractor
the
a disbursement voucher
of borrower, and of
when requesting a
with required
Construction
Construction
19
de
Contractor's
identify and
follows:
progress payment,
verify the payment
CONTRACTOR shall
authorization as
1)
2)
3)
Amount requested is available
Owner's signature(s) and Construction Con-
tractor's signature(s) are the same as on the
original escrow instructions
City Representatives signature(s) are the
same as on the original escrow instructions
or on an approved signature list of those
Representatives having the authority to
authorize disbursements
Where applicable, each Disbursement Authorization
submitted by the CITY to the CONTRACTOR shall
indicate what portion of the disbursement is to be
drawn from non-Section 312 funds and what portion is
to be drawn from Section 312 funds. Contractor shall
then contact the HUD Cash Management Contractor by
phone to make the appropriate drawdown. The
CONTRACTOR shall submit the required project data
(i.e., project number, voucher number, amount of
request, type of disbursement [interim or final]) to
obtain drawdown approval.
Approved drawdowns will be automatically transferred
by HUD Cash Management Contractor to CONTRACTOR'S
depository account and immediately disbursed by
CONTRACTOR upon receipt. The CONTRACTOR shall
2O
prepare a check(s) for the amount shown
payment authorizations and shall send the
to the CITY.
on the
check(s)
e®
Payment vouchers required by the HUD Cash Management
Contractor as written follow-up documentation of the
drawdown request, will be submitted to HUD Cash
Management Contractor on the same day as the
drawdown request is made.
OPTION B -- MULTIPLE DISBURSEMENT & SINGLE DRAW DOWN
Se
Upon loan approval and following project set up with
the Cash Management Contractor by authorized HUD
field office personnel, CITY shall forward
completed Control Instructions and all project funds
to CONTRACTOR. The Control Instructions shall
include the following data:
1) Owner(s) name
2) Contractor(s) name
3) Job site address
4) Dollar amount of funds being escrowed along
with the participation breakdown in dollar
amounts of non-Section 312 and Section 312
program funds when applicable
5) Instructions on how funds are to be disbursed
6) Original signatures of Owner, Construction
Contractor, and City Representative or Agent
21
CONTRACTOR will be authorized through the HUD office
of Information Policies and Systems to gain access
to the HUD Cash Management Contractor to request
a single reimbursement drawdown.
Upon receipt of a disbursement authorization by the
CITY and
signature
Contractor
Contractor's
identify and
follows:
a disbursement voucher
of borrower, and of
when requesting a
progress payment,
verify the payment
with required
Construction
Construction
CONTRACTOR shall
authorization as
1)
2)
3)
Amount requested is available
Owner's signature(s) and Construction Con-
tractor's signature(s) are the same as on the
original escrow instructions
City Representatives signature(s) are the
same as on the original escrow instructions
or on an approved signature list of those
Representatives having the authority to
authorize disbursements
The CONTRACTOR shall prepare a check(s) for the
amount shown on the payment authorizations and shall
send the check(s) to the CITY.
Upon final disbursement, CONTRACTOR shall then
contact the HUD Cash Management Contractor by phone
to make the appropriate drawdown. CONTRACTOR shall
submit the required project data (i.e., project
22
number, voucher number, amount of request, type of
disbursement) to obtain drawdown approval. Approved
drawdown will be automatically transferred by HUD
Cash Management Contractor to CONTRACTOR'S
depository account. Upon receipt of payment
authorization and receipt of 312 funds to
CONTRACTOR'S depository account; the CONTRACTOR will
cut a check to the CITY for project reimbursement.
Payment vouchers required by the HUD Cash Management
Contractor as written follow-up documentation of the
drawdown request, will be submitted to HUD Cash
Management Contractor on the same day as the
drawdown request is made.
RECONCILIATION OF 312 ESCROW ACCOUNT
AND PROJECT ACTIVITY
The CONTRACTOR shall prepare a monthly reconcili-
ation of the monthly Bank Disbursement Report
(received from HUD Cash Management Contractor) with
the Section 312 depository account activity for all
automatic transfers and disbursements. A Section 312
depository statement of account along with copies of
deposit receipts, payment vouchers, and checks will
be attached to the reconciliation statement.
Be
The CONTRACTOR shall submit the prepared monthly
reconciliation to the CITY.
23
HAINTENANCE OF PERI, ANENT PROJECT FILES AND
CASB HANAGEHENT COHPLIANCE ACCOUNTING
ae
CONTRACTOR shall compile all pertinent project data
into a permanent project file for CITY and HUD
auditing. Each project file will contain the
following data:
10)
11)
12)
1) Borrower name
2) Cash management loan number
3) Date of submission of the application to HUD
4) Obligation date
5) Settlement date
6) Amortization Effective Date
7) Drawdown requests -- amount and date
8) Remaining funds availability
9) Date funds received at local financial
institution
Dates and amounts of check issuance
Monthly escrow account reconciliations
Where applicable, separate accounting state-
ments of non-Section 312 fund activity
Where applicable, and as required by HUD,
files will be prepared to show that:
project
1)
At no time was there a commingling of Section
312 funds with private or other public funds
2) At no time did draws on Section 312 funds
exceed draws on non-Section 312 funds
24
LOAN CLOSEOUT
After the Amortization Effective Date is reached or the
final drawdown has been released (whichever comes
first), CONTRACTOR shall prepare Notice to Superior
Lienholder (when applicable) requesting notification to
HUD in the event of default by the borrower, a Final
Transmittal Letter to the Master Servicer (two copies),
and a final Disposition of Funds Statement.
documents will be forwarded to CITY to prepare
for transmittal to the Master Servicer.
These
loan
6. COMPUTER ACCOUNTING SERVICES
CONTRACTOR shall supply to the CITY a monthly
computer print-out of all transactions completed to
date and the balance remaining in each account.
7. RETENTION OF FILES AND AVAILABILITY OF DATA
ae
CONTRACTOR shall retain records of all accounts
established under the provisions of this Agreement
for a period of three (3) years after the closing of
each account. CONTRACTOR shall, upon request and
within thirty (30) days of such request, make
available all records, financial and otherwise,
dealing with its activities performed pursuant to
the provisions of this Agreement to authorized
auditors and monitors of the CITY or the United
States Department of Housing and Urban Development.
25
SCHEDUI~E OF FEES
In return for the services provided by the CONTRACTOR, the
CITY shall pay fees to the CONTRACTOR according to the
following schedule:
A. LOAN DOCUMENT PREPARATION SERVICES
For each loan application for which documents are
prepared: $125.00 plus outside costs including, but not
limited to, title, credit, and recording fees.
For each loan application for which title and credit
report have been supplied by CONTRACTOR, but which is
thereafter cancelled without performance of loan document
preparation or disbursement services: a cancellation fee
of $37.50 plus outside costs for title and credit
reports.
A fee of $10.00 will be charged to CITY for each separate
document to be redrawn due to actions by the CITY.
In the event the CITY wishes the CONTRACTOR to order
employment and income verifications, an additional fee of
$15.00 for each loan application will be charged.
26
B. FUND DISBURSEMENT SERVICES
~or
services (excluding 312
disbursement) are performed:
recording fees·
each loan application for which escrow disbursement
and Rental Rehabilitation
an additional $67.50 plus
C. LOAN COLLECTION SERVICES
For collection of monthly payment loans, a monthly fee of
1/24 of 1% of borrower's original loan amount or $8.00
whichever is greater, plus a one time account set-up
charge of $20.00 per loan. Collection fees for existing
loans will be based on the current loan balance at the
time of transfer to CONTRACTOR. A one time
$45.00 per loan to maintain collection
reporting for non-monthly payment loans.
charge of
accounting
For loans requiring the monitoring of property tax, a fee
of $42.50 per loan for outside costs.
D. SECTION 312 FULL SERVICE
1. Pre Approval Packaging and Issuance
of Preliminary Loan Risk Report
2. Full Packaging
3. Underwriting Analysis
4. Loan Document Preparation
5. Cash Management Services
Option A
Option B
$ 50.00
$ 50.00
$300.00
$150.00
$175.00
$ 75.00
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Plus outside costs includin9, but not limited to
credit reports, and recordation·
title,
If City utilizes all 312 servicing (one through five),
CONTRACTOR will waive both the pre-approval and full
packaging fee.
For any loan for which a Preliminary Loan Risk Report is
issued and which is thereafter cancelled, the fee will be
$50.00 plus outside costs.
E. RENTAL REHABILITATION SERVICES
fee of 3/4 of 1% of the total amount escrowed
A
minimum fee of $225.00 and a maximum of $750.00
Rental Rehabilitation services defined in Section II
this Agreement.
with a
for
of
IV. ADDITIONAL TERMS
A. EQUAL OPPORTUNITY
During the performance of this Agreement,
agrees as follows:
the CONTRACTOR
1. The CONTRACTOR will not discriminate against any employee
or applicant for
religious creed,
physical handicap,
employment because of their race,
color, national origin, ancestry,
medical condition, marital status, or
28
sex. The CONTRACTOR will take affirmative action to
ensure that the applicants are employed, and that
employees are treated during employment without regard to
their race, religious creed, color, national origin,
ancestry, physical handicap, medical condition, marital
status, or sex. Such action shall include, but not be
limited to, the following: employment, upgrading, demo-
tion or transfer, recruitment or recruitment advertising,
layoff or termination, rates of pay or other forms of
compensation and selection for training, including
apprenticeship.
The CONTRACTOR will, in all solicitations or advertise-
ments for employees placed by or on behalf of the
CONTRACTOR, state that all qualified applicants will
receive consideration for employment without regard to
race, religious creed, color, national origin, ancestry,
physical handicap, medical condition, marital status, or
sex.
The CONTRACTOR will cause the foregoing provisions to be
inserted in all subcontracts for any work covered by this
Agreement so that such provisions will be binding upon
each subcontractor, provided that the foregoing provi-
sions shall not apply to contracts or subcontracts for
standard commercial supplies or raw materials.
29
B. REPRESENTATIONS
As an inducement to the execution of this Agreement, the
CONTRACTOR represents and agrees that it has, and will
continue to have, adequate and proper facilities and
personnel to perform the services and work agreed to be
performed by it hereunder; that it is duly qualified by
law
not employed any person to solicit or procure this
Agreement, and has not made, and will not make, any
payment or any agreement for the payment of any
commission, percentage, brokerage, contingent fee or
other compensation in connection with the procurement of
this Agreement.
to perform such services and work, and that it has
C. TERMINATION OF SERVICES
In the
hereof,
notice
event of breach of any condition or provision
the CITY shall have the right, by prior written
to the CONTRACTOR, to terminate its employment
hereunder and cancel this Agreement and have the work
called for hereby otherwise performed, without prejudice
to any other rights or remedies of the CITY. The CITY
shall have the benefit of such work as may have been
completed up to the time of such termination and with
respect to any part which shall have been delivered to
and accepted by the CITY, there shall be an equitable
adjustment of compensation.
3O
Irrespective of any default hereunder, the CITY may also,
at any time at its discretion, terminate this Agreement,
in whole or in part, by giving the CONTRACTOR thirty (30)
days written notice thereof and in such event, the
CONTRACTOR shall be entitled to receive compensation
specified herein for all work completed and accepted
prior to such thirty (30) days notice of termination or
cancellation; an equitable adjustment shall be made, as
compensation to the CONTRACTOR to the date of such
termination or cancellation, but not yet delivered to the
CITY. The CONTRACTOR at its discretion may terminate this
Agreement, in whole or in part, by giving the CITY thirty
(30) days written notice.
The term of the Agreement shall commence upon execution
of this Agreement by both parties and shall continue for
one year thereafter. This Agreement shall automatically
renew for successive one year terms.
31
IN WITNESS HEREOF, the CITY and CONTRACTOR have executed
this Agreement as of the date first hereinabove set forth.
APPROVED AS TO CONTENT:
BY:
CITY OF SOUTH SAN FRANCISCO
a Municipal Corporation
CITY MANAGER
APPROVED AS TO FORM:
UNITED STATES ESCROW, INC.
a California Corporation
CITY g~TTORNEY
BY:
VICE PRESIDENT
ATTEST:
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