(a) Subordination requests shall meet County requirements and policies and may include the following considerations:
(1) The amount of the new loan may only include the current balance of the senior debt plus debt to pay for all or a portion of the closing costs of the refinance/2nd with no cash out.
(2) The new loan must not have a balloon or negative amortization feature.
(3) The new primary loan (fixed interest rate only) is reduced and/or monthly payment are recorded.
(4) If the purpose for the new loan to which the County is to be subordinate is for home improvements, educational, medical, or similar purposes, not to exceed ninety percent (90%) of the appraised value that has been documented by a qualified third party specialist, the borrower may increase the amount of the new loan with these funds being placed in a supervised escrow account and relevant bills are to be paid out of this account.
(b) The County of Yolo shall not subordinate its deed of trust to an increase risk/less security position, except for exceptional/special circumstances to be determined by the Planning, Public Works and Environmental Services Director. Exceptions are defined as any action that would depart from policy and procedures stated in the County’s policies. Consideration of an exception/special circumstance may be initiated by the County or its agent. A report on the situation will be prepared. This report shall contain a narrative, including the staff’s recommended course of action and any written or verbal information supplied by the applicant. The Planning, Public Works and Environmental Services Director shall make a determination of the exception/special circumstances requested at a regular or special meeting of the Planning Commission.
(c) If the borrower and the new loan comply with the above requirements, the following information will be provided, if applicable:
(1) Borrower’s request for subordination, including a statement of the reason for the refinance and supporting documentation of income, hardship, copy of loan application, etc.
(2) Copy of the Lender’s instructions for escrow purposes, that specifies proposed use of the borrowed funds, etc.
(3) Copy of the new loan documents, (i.e. Promissory Note, Deed of Trust, and Loan Disclosure to show the amount of the new loan, rate of interest and terms of the proposed financing).
(4) Copy of the current appraisal, credit report, and preliminary title report.
(5) A completed Subordination Agreement for County execution will allow the County to finish processing the request in the event the subordination is approved.
(6) A Request for Notice of Default or Sale.
(Ord. 1451, eff. January 1, 2015)