Title
Joint resolution approving Community Development’s Lien Subordination Policy.
Staff Summary
· In March 2003, the CDC approved a “Lien Subordination Policy” to determine how and when Lake County should subordinate any liens it holds on properties.
· It has come to staff’s attention that certain documentation requirements for subordination are in conflict with the documentation requirements of the superior lenders completing a streamlined refinancing.
· The proposed new terms for when the County will subordinate a lien are set forth as follows: 1. The borrower takes out no cash. 2. The refinancing is for a lower interest rate than the existing first mortgage. 3. The borrower’s new monthly mortgage payment (including principal and interest) will be less than the current monthly payment. 4. The borrower’s new loan amount will be less than the current loan amount. 5. The new mortgage must be for a fixed interest loan. 6. The County will not subordinate to an adjustable rate mortgage (ARM). 7. Proper background documentation is submitted to the County.
· The Community Development Commission recommends Committee approval.
Body
WHEREAS, in March 2003, the CDC approved a “Lien Subordination Policy” to determine how and when Lake County should subordinate any liens it holds on properties; and
WHEREAS, in January 2013 the CDC amended Lien Subordination Policy is set forth as follows:
1. The borrower takes out no cash.
2. The refinancing is for a lower interest rate than the existing first mortgage.
3. The borrower’s new monthly mortgage payment (including principal and interest) will be less than the current monthly payment.
4. The borrower’s new loan amount will be less than the current loan amount.
5. The new mortgage must be for a fixed interest loan.
6. The County will not subordinate to an adjustable rate mortgage (ARM).
7. Proper background documentation is submitted to the County; and
WHEREAS, Lake County’s Community Development Division makes determin...
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