HomeMy WebLinkAboutRDA 03 1ST TIME H.B. 05-19-97DATE:
MAY 19, 1997
Inter-Com
RDA NO. 3
5-19-97
TO:
FROM-
SUBJECT:
WILLLa`M A. HUSTON, EXECUTIVE DIRECTOR
REDEVELOPM-ENT AGENCY STAFF
AUTHORIZATION FOR CONTRa, CT FOR FIIRST
PROGRAM
TIS~ HOMEBUYERS
SUMMARY: Staff is requesting authorization for the Assistant City Manager to execute a cOnsUltant
sen'ices contract with. U.S.E. Community: Services' Inc. for the City's FirSt-Time H°rnebuyers.
Program~ ' · ' ":-:"::' : ' :'
· .
RECOM.'MENDATION
It is recommended that· the Redevelopment Agency authorize the Assistant City Manager to execute a
consultant services contract with U.S.E. Community Services Inc. for the administration of the City's
First-Time, Downpayrnent Assistance Homebuyers program.
FISCAL 13{PACT
It is anticipated that all'processing fees associated with the First-Time Homebuyers Program will be
paid for by the program's participant as they move through the escrow process in purchasing their
home. If a participant drops out of escrow the Agency will become liable for a fixed amount of fees
that the consultant has incurred. The amount of exposure to the Tustin Community Redevelopment
Agency has been identified to be no more $330.00 per participant for the usual services.
The current fiscal year's budget has appropriated $390,000 to operate this program. This includes
Redevelopment Agency Housing Set Aside Funds in the amount of $252,000 and the City's allocation
of Federal HOME funds in the amount of $190,000. Additional Redevelopment Agency funding will
be used in subsequent years to provide for the operation of this program.'
BACKGROUND
The housing stock in the City of Tustin is primarily renter occupied. Approximately 60% of the
housing units are rental and approximately 40% are owner occupied. While the development of
Tustin Ranch during the past five years and the expected development of Marine Corps Air
Station Tustin will help to resolve this inequity, the City and the Tustin Community
Redevelopment Agency have each identified increasing and expanding homeownership as a
primary goal for the community.
\Villiam A. Huslon
May 19, 1997
page 2
Like other Orange County cities, Tustin finds that market rate housing prices exceed the ability of
many in the community to afford home ownership. Two specific barriers for these purchasers
have been identified'
· The ability to have adequate funds for down payments and closing costs
· 'I:he ability to make monthly mortgage payments within acceptable housing cost to
income ratios.
To assist in removing these barriers staff propose to provide two types of "silent" loans,
subordinated to market issued first trust loans. The first will be used for downpayment and closing
cost assistance and the second will be used for loans to reduce the size and amount of monthly
payment for first trust deed mortgages to allow for buyers to achieve market level housing cost to
income ratios. The programs will be available city-wide and will also benefit the Town Center and
South Central project areas by creating opportunities for ~aff'ordable housing.
The initial funding from these loans will come from two sources: the Redevelopment Agency's
tax increment housing set-aside funds ("Set-Aside Funds") and the Home Program ("Home
Funds") as established and regulated by the United States Department of Housing and Urban
Development (HUD). The Agency intends to utilize Home Funds for all applicants eligible under
federal regulations until our current allocation of Home Funds are depleted. Other applicants will
be assisted under a Redevelopment Agency assistance package utilizing Housing Set-Aside funds.
No additional allocation of Home Funds beyond the original allocation is expected in the
foreseeable future.
DISCUSSION
Staff is recommending the Agency authorize entering into a contract with U.S.E. Community
Services Inc. for the administration of the City's First-Time Homebuyers Program. U.S.E.
Community Services Inc. has years of experience gained with many municipalities in the operation
of similar programsl
U.S.E. Community Services Inc. is being recommended after a competitive process which
included the distribution of Request for Proposals (RFP) to over a dozen firms. Five (5) firms
responded to the RFP and two firms were interviewed by Agency staff. U.S.E. Community
Services Inc. was selected as the most qualified by the interview panel based upon a review of the
submitted proposals, samples of each firm's work, the interview process, and a review of
references.
The consultant will administer the program and underwrite, process and service the loans. The
Agency expects to have general management of the program, to provide direct overview of the
program and to disburse the funds into escrow. Implementation of the program elements and
preparation of all application and other forms, trust deeds, promissory notes and any other
documentation needed for the program will be the responsibility of U.S.E. Community Services
William A. Huston
May 19, 1997
page 3
Inc.. The Agency has implemented a similar program on a project specific basis and has developed
trust deeds, promissory notes and other legal instruments which have been accepted by FNMA
and FHA, which may be of use to the selected firm in developing similar required documentation.
U.S.E. Community Services Inc. will also be responsible for the day-to-day administration of the
program, including all contact with the borrowers or their representatives, preparation and
execution of all documents, recordation of appropriate documents and the on-going servicing of
the. loans. They will also maintain appropriate records of each transaction as well as the
disbursement of all monies for the purpose of any possible audit by appropriate entities.
The Redevelopment Agency 1996-97 budget appropriated $190,000 from HUD Home Funds plus
an additional 25% match of $47,500 required by HUD as part of the Home Program. The match
will be provided in Redevelopment Set-Aside Funds for Home Fund eligible applicants. An
additional $252,500 from Redevelopment Agency Housing Set-aside Funds will be used for this
program. In future years additional Redevelopment Agency funds will become available.
The loans will be secured through the recordation .of a second trust deed against the property
being purchased by the program participant. The interest rate on the loans will be a simple interest
rate of 7% per annum. Repayment on the loans using HOME funds are deferred for the first five
years. Monthly payments will then be due to fully amortize the downpayment assistance and the
second trust loan by the twentieth year. Repayment on the loans using Redevelopment Agency
Housing Set-aside Funds are not required until the home is sold, title transferred to non-income
qualifying households, or the property is rented or leased. In both instances the loans may be
prepaid at any tlme.
Findings have been previously made and resolutions were adopted so that housing set-aside funds
could be used outside the boundaries of the Town Center and South Central Redevelopment
Project Areas. This allowed the housing set-aside funds to be used for the purpose of increasing,
improving, and preserving the community's supply of Iow and moderate income housing. No
additional actions regarding the use of housing set-aside funds outside the project area are
required at this time because of the actions previously taken by the Tustin Community
Redevelopment Agency.
The City Attorney's office has reviewed and approved the proposed Consultant Services
Agreement.
Christine Shingleton x,
Assistant City Manager
David Gottlieb
Redevelopment Project Manger
CONSULTANT SERVICES AGREEMENT
This Agreement for Contract Services (herein "Agreement"), is made and entered into by and
between the TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a public body, corporate and
politic, ("Agency"), and U.S.E. Community Services Group Inc. (U.S.E.), ("Consultant").
WHEREAS, Consultant is qualified to provide the necessary services and has agreed to
provide such services; and
WHFREAS, Consultant has submitted to Agency a proposal, dated November 8, 1997 a
copy of which is attached hereto as Exhibit "A", and is by this reference incorporated herein as though
set forth in full hereaf[er (the "Proposal").
NOW, 'IIqEREFORE, in consideration of the premises and mutual agreements contained'
herein, Agency agrees to employ and does hereby employ Consultant and Consultant agrees to provide
consulting services as follows:
1. SERVICES OF CONSULTANT
1.1 .Scope of Services. In compliance with ail terms, and conditions of this
Agreement, the Consultant shall provide those services specified in the Proposal attached hereto as
Exhibit "A." Consultant warrants that all services will be performed in a competent, professional and
satisfactory manner in accordance with all standards prevalent in the industry.
In the event of any inconsistency between the terms of such Proposal and the text of
this Agreement, the text of this Agreement and Exhibits B, C, and D shall govern.
1.2 Compliance with Law. All services rendered hereunder shall be provided in
accordance with all Federal, State of Califomia laws, and the ordinances, resolutions, statues, roles, and
regulations of the City of Tustin and the Tustin Community Redevelopment Agency.
1.3 Familiarity with Scope of Services. By executing this Contract, Consultant
warrants that Consultant (aJ has thoroughly investigated and considered the work to be performed,
has generally acquainted itself with the site of the work and conditions there existing and (c) has
carefully considered the means and methods for performance (d) fully understands the facilities,
difficulties, restrictions attending performance of the work under this Agreement. Should the
Consultant discover any latent or previously unknown condition materially differing fi.om those
inherent in the work or as represented by the Agency, Consultant shall immediately inform Agency of
such fact and shall not proceed with any work except at Consultant's risk until written instructions are
received fi.om the Contract Officer.
1.4' Care of Work. The Consultant shall adopt reasonable methods during the
life of the Agreement to prevent loss or damage to materialS, papers and other components thereof to
minimize losses of damages and shall be responsible for all such damages until acceptance of work by
Agency, except such losses or damages as may be caused by Agency's own negligence.
1.5
Additional Services. In accordance with the terms and conditions of this
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Agreement, the Consultant shall perform services in addition to those specified in the Scope of Services
when directed to do so in writing by the Contract Officer, provided that Consultant shall not be
required to perform any additional services without additional, reasonable compensation. Any
additional compensation not exceeding ten percent (10%) of the original contract sum may be
approved in writing by the Contract Officer. Any greater increase must be approved by the City
Manager. Other applicable provisions for additional services are found in Section.2.3 and 2.4.
1.6 Special Requirements. Additional terms and conditions of this Agreement
which are made a part hereof are set forth in Exhibits "B", "C", and "D" and are incorporated herein by
this reference. In the event of a conflict between the provisions of Exhibits "B", "C" and "D" and any
other provision of this Agreement, including Exhibit A, the provision of Exhibit "C" and "D" shall
govem.
2. COMPENSATION
2.'1 For the'services rendered pursuant to this Agreement, the Consultant shall
be compensated in accordance with Exhibit C (attached).
2.2 Method of Payment. In any month in which Consultant wishes to receive
payment, Consultant shall, no later than the first (lst) working day of such month, submit to the
Agency in a form approved by Agency, an invoice for services rendered prior to the date of the invoice.
Agency will pay Consultant for all expenses stated thereon which are approved by Agency pursuant to
this Agreement no later than the last working day of said month.
2.3 Changes. In the event of any change or changes in the scope of work
requested by Agency, the parties hereto shall execute an addendum to this Agreement, setting forth
with particularity all terms of the Addendum, including but not limited to any additional compensation
to Consultant.
3. PERFORCE SCHED~E
.3.1
Agreement.
Time of Essence. Time is of the essence in the performance of this
3.2 Schedule of Performance. Ail services rendered pursuant to this Agreement
shall be performed within any time periods prescribed in any Schedule of Performance attached hereto
marked Exhibit "D". Extension of any time period specified in the Exhibit "D" must'be approved in
writing by the Contract Officer.
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3.4 Term. Unless earlier terminated in accordance with Section 7.7 of this
Agreement, this Agreement shall continue in full force and effect until completion of the services but
not exceeding one (1) year from date hereoF..
4. COORDINATION OF WORK
4.1 Revresentative of Consultant. The following Representative of the
Consultant is hereby designa-t~cl as being the Representative of Consultant authorized to act in its behalf
with respect to the work specified herein and make all decisions in connection therewith: Ted ,4.
McDermith
It is expressly understood that the experience, knowledge, capability and
reputation of the forego~g Representative is a substantial inducement for Agency to enter into this
AA~eemen!.,. Th,.eref.ore, ~e .f. or..e, going ~Representative shall be responsible during the term of this
eement mr mrecung au acuvmes of Consultant and devoting sufficient time to personally supervise
the services hereunder. The foregoing Representative may not be changed by Consultant without the
express written approval of Agency.
4.2 Contract Officer. The Contract Officer shall be the Assistant Executive
Director of Agency unless otherwise designated in writing by the Executive Director of Agency. It
shall be the Consultant's responsibility to keep the Contract Officer fully informed of the progress of the
performance of the serv/ces and Consultant shall refer any decisions which must be made by Agency to
the Contract Officer. Unless otherwise specified herein, any approval of Agency required hereunder
shall mean the approval of the Contract Officer.
4.3 Prohibition Against Subcontracting. or Assignment.' The experience,
knowledge, capability and reputation of Consultant, its principals and employees were a substantial
inducement for the Agency to enter into this Agreement. Therefore, Consultant shall not contract with
any other entity to perform in whole or in part the services required hereunder without the express
written approval of the Agency. In addition, neither this Agreement nor any interest herein may be
assigned or transferred, voluntarily or by operation of law, without the prior written approval of
Agency.
-.
4.4 Independent Contractor. Neither the Agency nor any of its employees shall
have any control over the manner, mode or means by which Consultant, its agents or employees
perform the services required herein, except as otherwise set forth herein. Consultant shall perform all
services required' herein as an independent contractor of Agency'and shall remain at all times as to
Agency a wholly independent contractor with only such obligations as are consistent with that role.
Consultant shall not at any time or in any manner represent that it or any of its agents or employees are
agents or employees of Agency.
· 5. INSURANCE AND INDEMNIFICATION
5.1 Insurance. Consultant shall procure and maintain, at its cost, and submit
concurrently with its execution of this Agreement, public liability and property damage insurance
against all claims for injuries against persons or damages to property resulting fi.om Consultant's
performance under this Agreement. Consultant shall also carry workers' compensation insurance in
accordance with California workers' compensation laws. Such insurance shall be kept in effect during
the term of this Agreement and shall not be cancelable without thirty (30) days written notice to
Agency of any proposed cancellation. The Agency's certificate evidencing the foregoing and
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designating Agency as an additional named insured shall be delivered to and approved by the Agency
prior to conunencement of the services hereunder. The procuring of such insurance and the delivery of
policies or certificates evidencing the same shall not be construed as a limitation of Consultant's
obligation to indemnify the Agency, its officers, and employees. The amount of insurance required
hereunder shall include comprehensive general liability, personal injury' and automobile liability with
limits of at least One Million Dollars ($1,000,000) combined single limit per occurrence and
professional liability coverage with limits of at least Five Hundred Thousand Dollars ($500,000).
Coverage shall be provided by Admitted Insurers with an A.M. Best's Key Rating of at least A VII. If
Consultant provides claims made professional liability insurance, Consultant shall also agree in writing
either (1) to purchase tail insurance in the amount required by this Agreement to cover claims made
x~thin five years of the completion of Consultant's services under this Agreement, or (2) to maintain
professional liability insurance coverage with the same carder in the amount required by this
Agreement for at least five years after completion of Consultant's services under this Agreement. The
Consultant shall also be required periodically to provide evidence to Agency of the purchase of the
required tail insurance or continuation of the professional liability policy.
5.2 Indemnification. The Consultant shall defend, indemnify and hold hanrdess
the Agency, its officers and employees, fi-om and against any and all actions, suits, prigs, claims,
demands, losses, costs, and expenses, including legal costs and attorneys' fees, for injury to or death of
person or persons, for damage to property, including property owned by Agency, and for errors and
omissions committed by Consultant, its officers, employees and agents, arising out of or related to
Consultant's performance under this Agreement, except for such loss as may be caused by Agency's
own negligence or that of its officers or employees.
6. RECORDS AND REPORTS
6.1 Reports. Consultant shall periodically prepare and submit to the Contract
Officer such reports concerning the performance of the services required by this Agreement as the
Contract Officer shall require.
6.2 Records. Consultant shall keep such books and records as shall be
necessary to properly perform the services requked by this Agreement and enable the Contract Officer
to evaluate the performance of such services. The Contract Officer shall have full and flee access to
such books and records at all reasonable times, including the right to inspect, copy, audit and make
records and transcripts fi-om such records.
6.3 Ownership of Documents. All drawings, specifications, reports, records,
documents and other materials prepared by Consultant in the performance of this Agreement shall be
the property of Agency and shall be delivered to Agency upon requeSt of the Contract Officer or upon
the termination of this Agreement, and Consultant shall have no claim for further employment or
additional compensation as a result of the exercLse by Agency of its flail rights or ownership of the
documents and materials hereunder. Consultant may retain copies of such documents for its own use.
Consultant shall have an unrestricted right to use the concepts embodied therein.
6.4 Release of Documents. All drawings, spedfications, reports, records,
documents and other materials prepared by Consultant in the performance of services under this
Agreement shall not be released publicly without the prior written approval of the Contract Officer.
7. ENFORCEMENT OF AGREEMENT
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7.1 California Law. This Agreement shall be construed and interpreted both as
to validity and to performance of the parties in accordance with the laws of the State of California.
Legal actions concerning any dispute, claim or matter arising out of or in relation to this Agreement
shall be instituted in the Superior Court of the County of~Orange, State of California, or any other
appropriate court in such county, and Consultant covenants and agrees to submit to the personal
jurisdiction of such court in the event of such action.
7.2 Disputes. In the event of any dispute arising under this Agreement, the
injured party shall notify the injurin-g party in writing of its contentions by submitting a claim therefor.
The injured party shall continue performing its obligations hereunder so long as the injuring party cures
any default within ninety (90) days after service of the notice, or if the cure of the default is commenced
within ~ (30) days after service of said notice and is cured within a reasonable time after
commencement; provided that if the default is an immediate danger to the health, safety and general
welfare, the Agency may take immediate action under Section 7.5 of this Agreement. Compliance with
the provisions of this Section shall be a condition precedent to any legal action, and such compliance
shall not be a waiver of any party's right to take legal action in the event that the dispute is not cured.
7.3 Waiver. No delay or omission in the exercise of any fight or remedy of a
non-defaulting party on any default shall impair such right or remedy or be construed as a waiver. No
consent or approval of Agency shall be deemed to waive or render unnecessary Agency's consent to or
approval of any subsequent act of Consultant. Any waiver by either party of any default must be in
writing and Shall not be a waiver of any other default concerning the same or any other provision of this
Agreement. ·
7.4 ' and,Remedies, are Cumulative. Except with respect to rights and
remedies expressly dec' ~gh!s
mrea to t>e excmsive in this Agreement, the'rights and remedies of the parties
are cumulative and the exercise by either party of one or more of such rights or remedies shall not
preclude the exercise by it, at the same or different times, of any other rights or remedies for the same
default or any other default by the other party.
7.5 ~. In addition to any other fights or remedies, either party may
take legal action, in law or in equity, to cure, correct or remedy any default, to recover damages for any
default, to compel specific performance of this Agreement, to obtain injunctive relief; a declaratory
iud .gment or any other remedy consistent with the purposes of this Agreement.
........................... o,.o for any
r~...,,....,. ($ '~ .~.-,;.-...:,4...~.4 .4 ......
· .,;~4, t,,-,I,4 C-,-,-, ,.~
7.7 Termination Prior to Expiration of Term. The Agency reserves the fight to
terminate this Agreement at any time, with or without cause, upon thirty (30) days written notice to
Consultant, except that where termination is due to the fault of the Consultant and constitutes an
immediate danger to health, safety and general welfare, the period of notice shall be such shorter time
as may be appropriate. Upon receipt of the notice of termination, Consultant shall immediately ce2se
all services hereunder except such as may be specifically approved by the Contract Officer. Consultant
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shall be entitled to compensation for all services rendered prior to receipt of the notice of termination
and for any services authorized by the Contract Officer thereafter.
7.8 Termination for Default of Consultant. Ii'te~ation is due to the failure of
the Consultant to fulfill its obligations under this Agreement, Agency may take over the work and
prosecute the same to completion by contract or otherwise, and the Consultant shall be liable to the
extent that the total cost for completion of the services required hereunder exceeds the compensation
herein stipulated, provided that the Agency shall use reasonable efforts to mitigate damages, and
Agency may withhold any payments to the Consultant for the purpose of set-off or partial payment of
the amounts owed to Agency.
7.9 Attorneys Fees. If either party commences an action against the other party
arising out of or in connection with this Agreement or it subject matter, the prevailing party shall be
entitled to recover reasonable attorneys' fees and costs of suit fi.om the losing party.
8. AGENCY OFFICERS AND EMPLOYEES; NON-DISCRIMINATION
· .
8.1 Non-Liabili _ty of Agency_ Officers and Employees. No officer or employee
of Agency shall be personally liable to the Consultant, or any successor-in-interest, in the event of any
default or breach by the Agency or for any amount which may become due to the Consultant or its
successor, or for breach of any obligation of the terms of this Agreement.
8.2 Covenant Awainst Discrimination. Consultant covenants that, by and for
itselt~ its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no
discrimination or segregation in the performance of or in connection with this Agreement regarding any
person or group of persons on account of race, color, creed, religion, sex, marital status, national
origin, or ancestry. Consultant shall take affirmative action to insure that applicants and employees are
treated without regard to their race, color,, creed, religion, sex, marital stares, national origin, or
9. MISCELLANEOUS PROVISIONS
9.1 Notice. Any notice, demand, request, consent, approval, or commUnication
either party desires or is required to give to the other party or any other person shall be in writing and
either served personally or sent by pre-paid, first-class mail to the address set forth below. Either party
may change its address by notifying the other party of the change of address in writing. Notice shall be
deemed communicated forty-eight (48) hours from the time of mailing if mailed as provided in this
Section.
To Agency:
TUSTIN COMMUNITY REDEVELOPMENT AGENCY
300 Centennial Way
Tustin, CA 92780
Attention: Assistant Executive Director
(Contract Officer)
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To Consultant:
Ms. Teri A. McDerrnith, Southwest Regional Manager
U.S.E. Community Services Group
8121 E. Florence Avenue
Downey, Ca 90240
9.2 .Inte~:ratecl Agreement. TNs Agreement COntains all of the agreements of
the parties and cannot be amended or modified except by written agreement.
9.3 ' Amendment. Th/s Agreement may be amended at any time by the mutual
COnsent of the parties by an instrument in writing.
9.4 Severability. In the event that any one or more of the phrases, sentences,
clauses, paragraphs, or sections conu~ined in this Agreement shall be declared invalid or unenforceable
by valid judgment or decree of a COurt of competent jurisdiction, such invalidity or unenforceability
shall not affect any of the remaining phrases, sentences, clauses, pinS. graphs, or sections of this
Agreement, which shall be interpreted to carry out the intent of the parties hereunder.
9.5- Com. orate Authority. The persons executing this Agreement on behalf of
the parties hereto warrant that they are duly authorized to execute this Agreement on behalf of said
parties and that by so executing this Agreement the parties hereto are form~y bound to the provisions
of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates stated
below.
Dated:
APPROVED AS TO FORM:
"Agency"
Tustin Community Redevelopment Agency,
a public body, COrporate and politic
By:
Christine Shingleton
Assistant Executive Dkector
Lois Jeffrey
City Attorney
"Consultant"
U.S.E. Community Services Group
U.S.E. Community Services Group
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By:
Name Printed
Title
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Attached hereto are:
1)
2)
EXHIBIT "A"
PROPOSAL and SCOPE OF SERVICES
Consultant's Proposal;
Scope of Work and Budget
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o
.
.
.
.
.
.
.
EXHIBIT "B"
SPECIAL REQUIREMENTS
The "Force Majeure" provisions described in Section 3.3 are hereby waived.
The "Liquidated Damages" provisions described in Section 7.6 are hereby waived.
Consultant shall present to Agency certificates of insurance and endorsement forms verifying
that the Consultant has the insurance as required by this Agreement. Said forms shall be
reviewed and approved by the office of the'City Attorney of the City of Tustin. A Certificate
of Insurance Form is attached.
If the Contract Officer determines that a product deliverable is unacceptable,' either before or
atter a draft or final draft is issued, because it did not conform to the specifications'set forth in
the Agreement, the Consultant shall submit a revised report or product at Consultants' expense.
Progress reports shall be submitted by Consultant when' requested by the Contract Officer. All
progress reports must be signed by the Consultant.
Consultant shall utilize those professional personnel and subconsultants to perform services
required under this Agreement as identified in Consultants' Proposal. No substitution shall be
made without the advance written approval of the Contract Officer, atter review of the
proposed replacement's experience and qualifications with a written explanation of the
necessity for the change. No increase in the compensation or reimbursable salary rates will be
allowed when personnel or firm substitutions are authorized.
Consultant shall remove and replace project personnel or subconsultants assigned to project
personnel or subconsultants assigned to project who do not perform assigned duties in a
manner satisfactory to the Contract Officer.
Consultant shall be required to meet with Contract Officer of the Redevelopment Agency to
the extent necessary or desirable to discuss progress on the Scope of Work at contract Officer's
direction.
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Is attached hereto.
EXHIBIT "C"
SCHEDULE OF COMPENSATION
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EXHIBIT "D"
SCHED~E OF PERFORMANCE
Attached hereto is the schedule ofperformance for the scope of services outlined in Exhibit A.
The "start date" for this schedule of performance is agreed to be the date this Agreement is
executed by Agency.
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ALL PURPOSE ACKNOWLEDGM~_.~
STATE OF CALIFORNIA' )
)SS-
COUNTY OF _)
On this _day of
, 19____, before me,
, Notary Public, personally appeared
personally Imown to me - OR
proven to me on the basis ofsatisfactory evidence to be the
person(s) whose name(s) is/are subscribed to the within instrument and actmowledged to me
that he/she/they executed the same in Ns/her/their authorized capacity0es)' and that by
his/her/their sigp. a. ture(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
Wimess my hand and official seal.
NOTARY SEAL
Signature of Notary
CAPACTI~' CLA~fED BY SIGNER:
SIGNE. R IS REPRESENrlING:
~ ofP,:m~s) ,~ Enth~)
P-IIIiIIIIIilIIIIIIIIIIIIIIIIIIIIiiilllllliiiiillliiiiiiiiiiiIiH})
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· Tills CERTIFICATE Nil/ST BE ATTACHED TO TIlE [X)CUMENT D~ED *
· TO THE RIGHT: *
·
· N~ml:x::r ofP, gc~: D~k: of~
·
·
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EXHIBIT A
PROPOSAL
o
PROPOSAL CONTENT~_
EXHIBITS
lo
2.
3.
4.
e
9.
Name, Address, Principal Place of Business
Statement of Qualifications
Project Manager-Name and Qualifications
Similiar Programs
SCOPE OF WORK
Loan Processing and Underwriting
Loan Document Preparation
Loan Portfolio Management
Delinquency and Default foIlow-u~ Management
First Time Homebuyer Consulting Ser~'ices
First Time Homebuyer Program
Schedule Of Performance
Fee Stru. cture
Payment Schedule
Summary of Benefits
Management and Participating Personnel
1.
General Information
Loan Document Preparation and First Time Home Buyer '
Loan Portfolio Management
U. S.E. COMMUNITY
SERVICES'
SUBMISSION REQUIREMENTS
I. NAME, ADDRESS, PHONE OF PRINCIPAL PLACE OF BUSINESS
USE COMMUNITY SERVICES GROUP, INC.
8121 E. Florence Avenue
Downey, Ca 90240
(310) 927-6656
2. STATEMZNT OF QUALIFICATIONS
U.S.E. Community Services Group, Inc. (U.S.E.) corporate goal is to provide streamlined and cost
effective support services to government housing and community development programs.
U.S.E.'s group includes: United States Escrow, U.S.E. Trust Deed Collections, and Continental
Community Funding.
U.S.E. is fully licensed and governed by the Department of Cortx)mtiorts. We also possess an
Escrow license, a Real Estate Brokers license, and are approve4..by FHA as a non-supervised
seller and servicer. Under this approval, U.S.E. has the abili~j t~ originate funds and service
FHA insured loans, as well as, guarantee local agencies that their portfolios are serviced to FHA
standards. FHA Title I, 203K, and 203B are just a partial list of some of the various loans
serviced by U.S.E. HUD requires that this approval is contingent upon meeting all necessary
HUD & FHA standards, including extensive financial audit requirements. (Exhibit at the end of
this section)
BONrDFNG, AND INSUR.&NCE
U.S.E. has fidelity coverage in place for one million dollars ($1,000,000) in the event of
mishandling of funds held in lrust. (Exhibit at the end of this section)
· I~ addition, all U.S.E. employees are fingerprinted and registered with a bonding agent. This
guards against employee misappropriation of that funds.
ERROR~ AND OMISSIONS INSURANCE (MORTGAGE 1~.~ INSURANCE
The key to any loan servicer is its ability to protect its investors fi.om major loss due to damage of
the property securing the loan. An uninsured loss due to fire, flood, or other natural disasters can
destroy the total value of the property, leaving your Agency exposed to default and lose of
principal.
U.S.E.'s Errors and Omissions Insurance will protect up to $I,000,000 per occurrence of
uninsured damage from fire and/or flood. This coverage applies whether U.S.E. is escrowing for
insurance and neglects in the timely payment of hazards or if the borrower does not make
payment and there is a resulting lapse of insurance on the property. Our policy also protects the
Agency in the event of a lapse in the payment of property taxes and eventual foreclosure by the
taxing authority. U.S.E.'s Errors and Omissions policy is underwritten by Lloyd's of London.
COMPREHENSIVE BUSINESS LIABILITY
U.S.E. also maintains a comprehensive business liability insurance package that covers loss up to
$I,000,000 per occurrence. This policy protects the Agency and related entities from damages
arising from ANY actions of U.S.E.
PRINCIPALS AND MANAGERS
Gary M. Parsons
JeffC. Parsons
Anant Chandel, CPA
Kay Morris ·
Bill Green
President & Executive Director/Community
Services
Senior Vice President/Operations
Assistant Vice President & Conn-oller
Assistant Vice President/Community services
South East Regional Manager
Dean Sukeena
Teri McDermith
Donna Rush
Erik Sruenckel
Brenda Gordon
Michael Torres
Ralph Madhosingh
OTHER OFFICE LISTINGS
North East Regional Manager
South West Regional Manager
North West Regional Manager
Vice President/Operations
Manager of Loan Collections
Manager of Funds Disbursements
Manager of Computer Services
Regional offices
Sacramento Office
P.O. Box 927
Georgetown, CA 95634
Phone: (916) 333-0330
Fax: (916) 333-0650
Florida Office
10014 N. Dale Mabry H~W.' Suite I01
Tampa, FL 3361g
Phone: (813) 962-8817
Fax: (813) 926-791 g
Texas Office
2632 Encina Drive
Irving, TX 75038'
Phone: (214) 258-I 164
Fax: (214) 258-1714
Maryland Office
101 West Read Street, Suite 312
Baltimo .re, MD 21201
Phone: (410) 727-669 I
Fax: (410) 727-6693
?.I~NORITY OWNED Af,;D OPERATED BUSINESS ENTERPRISE
U.S.E. is a Minority Business Enterprise 0VlBE) firm with stOCk ownership retained by American
Indians. (Exhibit at the end of this section)
· EQUAL OPPORTUNITY
U.S.E. will not discriminate against any employee or applicant for employment because of'their race,
religious creed, color, national origin, ancestry, physical handicap, medical condition, marital status,
or sex. U.S.E. will take affirmatiVe action to ensure that applicants are employed, and . that
employees are treated during employment without regard to their race, religious creed, color, national
origin, ancestry, physical handicap, medical coni:lition, marital status, or sex. Such' action will
include, but not to be limited to, the following: employment, upgrading, demotion or transfer,
recruitment or recruitment advertising, layoff or termination, rates of pay or other forms of
compensation and selection for training, including apprenticeship.
DR UG-FREE WORKPLA CE'
U.S.E. certifies that it is a drag-fi-ce workplace.
CONFIDENTIAL SfA TERIAL
..
U.S.E. requests you keep this information confidential within your agency. All correspondence and
inquiries should be directed to U.S.E., 8121 East Florence Avenue; Downey, Califomia 90240; (310)
927-6686.
EXPERIENCE AND REPUTATION
In its twenty-first year of service to government agencies, U.S.E. Community Services G~/oup, Inc.
CO.S.E.) is commiued to meeting the specialized needs of our clients. Aided by a staffof dedicated
professionals, our services are s~ru.cmred on the technical understanding of HUD and State
regulations. We are a unique blend of private sector knowledge and public sector pmp6se.
U.S.E. is the leader in the development of support services to local and state government agencies.
We are noted in the industry for dependable, efficient service delivery. Our professional staff offers
you a broad range of disciplines including business administration, constrUction management, real
estate brokerage, escrow management and.joint fund control, finance, engineering, public speaking
and training, and housing program design,
U.S.E. specializes in cons'~ction funds disbursements (joint fund control). Funds are held in trust
and disbursed without delay upon proper authorization. We are fully lic~ and regulated by the
State Department of Corporations. We are also a member of the Es~'ow Agents Fidelity Corporation
and have fidelity bond coverage of $1,O00,O00.
For over two decades, U.S.E. has developed and delivered several innovative services to government
agencies involved in community and economic development act/dries. Our full scope of services
include, but are not limited to the following:
.o
· Administrative & Program Consultation -
· Loan Processing and Underwriting
-· Loan Document Preparation
· Construction Funds Disbursement
· Loan Portfolio Management
· Computer Lkflcage Package
· Construction Management
· Technical Consulting
· First Time Home Buyer Loan Program-Services
· Davis-Bacon Wage Compliance and State Prevailing Wage Compliance
· Delivery of Disaster Services to the States of California and Florida
· Mortgage Credit Certification (MCC) Program Services
Federal Cash Management (HOME and HOPE 3)
U.S.E.'s corporate and regional field service staff stay abreast of current changes in regulations,
on a national scope, which affect local agencies and, ultimately, the delivery of our services.
Regular contact is maintained with HUD Washington, D.C. staff in order to effectively deal with
daily issues you may face. Through constant exchange with local agencies throughout the United
States, we are also a networking link between agencies. Innovative ideas and approaches to
program service delivery are continually passed on to our client base.
We are proud of our twenty year history of dedication to the support of government housing and
redevelopment programs. Like you,.we have had to adjust to federal regulatory changes, loss of
"working" programs, and the startup of services to new programs. We have developed a full
scope of technical services to support both the HOME Program and the HOPE 3 Program. As is
our custom, we have introduced a menu of services that is technically sound and in compliance
with current regulations.
3. PROJECT MANAGER-NAME KNI) QUALIFICATIONS
Ted 3[cDermith, Regional Manager. Ms. McDermith is responsible for marketing, client 'issues,
and consulting for of Southern California. She also assists in new program design and
administration of new and existing programs. Ms. McDermith, maintaining a California real
estaie license, brings 15 years of banking, retail, and wholesale lending experience to U.S.E.,
including processing, Underwriting, originating, and closing loans for private sector companies.
In addition, Ms. McDermith is familiar with HUD assisted Davis-Bacon projects and the payment
of State Prevailing Wages associated with the construction and rehabilitation of construction
projects. She also conducts Davis-Bacon pre-bid and pre-construction conferences.
Ms. McDermith is a member of ihe Housing Committee for tile Orange County Chapter of the
Buildin§ Industry Association (BIA), an active member in the California Redevelopment
Association (CRA), and local chapter of the National Association of Housing and Redevelopment
Officials CNAHRO).
·
Ms. McDermith has personally written and set up all of the Southern California First Time Home
Buyers Programs, as well a managed each program currently being executed by U.S.E.
4. SIMILAR PROGRAMS
CITY OF FONTANA-First Time Home Buyers Program (Redevelopment) program funds
U.S.E. began funding loans for this program is/January 1995, and since inception has funded
16 loans, with more to follow. The dollar amount to date of funded loans is approximately
$145,100. Julie Bjork is the contact person in Fontana that we work with on this program. Her
phone number is (909) 350--6625. The Bureau Director of Economic and Community
Development is David Edgar, and his phone number is (909) 350-6739. The maximum loan limit
is 5;15,000, and the average.loan has been about $9,000..
CITY OF POMONA-First Time Home Buyers Program (Redevelopment) program funds
Pomona is a recent addition to the list of Agencies that have been assisted by U.S.E.'s expert
services on the First Time Home Buyers program development and implementation. The number
of loans funded to date are three with a dollar amount of $33,000. Pomona has several loans in
the pipeline that will be closing within the next week. The maximum loan amount is 10% of the
purchase price. Ed Flores is the Housing Manager in Pomona and our contact person is Guillermo
Najar.' Their phone numbers respectively are (909) 620-3630 and (909) 620-3766. Mr. Flores
worked in the City of San Bernar'dino when U.S.E. first started administering their First time
. Home Buyers Program. When he moved to Pomona, he was very anxious to bring U.S.E. on
board as the administrator of their FTHB program. In addition to the regular scope of services
provided to some of our FIMB clients, Pomona has implemented a mandatory Energy Efficient
Loan Program that requires an additional step of coordination of Energy Efficient inspectors and
additional requirements.
CITY OF DOlfrNEY-First Time Home Buyers Program (HOME) p'rogram funds
This proce.ss for the implementation of this program started in May of 1995. The dollar
amount spent to date is-approximately 5;306,000. The number of First time Home Buyers assisted
is approximately 13. The maximum loan amount for this program is 5;30,000. The contact person
in Downey is Mark Morris, Housing Planner. His phone number is (310) 904-7165. Ed'ward
Velasco is the Housing Manager in Downey, and he can be reached by the same phone number.
Generally when U.S.E. assists different agencies with F'I~B programs, we help develop the
program, documents, and manuals, as well as provide the services of processing and underwriting,
loan document preparation, coordination 'with the Real Property Escrow for timely closing of
loans, and for agencies in the direct vicinity of the Corporate office in Downey, provide Real
Property Escrow Services. All of our services can be used in whole or in part. Throughout the
scope of work section that follows, are different services that are provided to agencies in
conjunction with this type of program. Once again, your agehcy must decide what services best
suits your particular needs, and choose your program design accordingly. The services that are
not specifically requested in this proposal will be more visible because they are in Bold and Italic
styled writing.
f:\msoffice\winword~-nkgtdata\pros\teri\tsmfthb.doc November 5, 1996
5. SCOPE OF WORK
LOAN PROCESSIA'G AA'D UA'D~RWRITI,,'v~. Down payment assistance, in the form of a
deferred and or second mortgage, are offered to eligible applicants as part of an Agency's First
Time Home Buyer Program. This prood-am requires the coordination of the Agency, the First
Trust Deed Lender, U.S.E. Community Services Group CO.S.E.) and thc escrow firrn handling the
sale escrow transaction. U.S.E. excelswhen it comes to the coordination of numerous entities and
the complex underwriting processes necessary to achieve thc guidelines ofthis type of program.
A_oplication Intake. A final approval of down payment assimance is dependent upon the
· successful completion of an application package with the Fire Trust Deed Lender. In an effort to
avoid unnecessary duplications and costs, U.S.E. will coordinate paperwork requirements for
second trust deed approval with the First Trust Deed Lender. When the First Trust Deed Lender
determines that the applicant is a viable candidate, thi:y will send a copy package to U.S.E. to
begin underwriting the second trust deed.
Upon receipt of a completed loan application package, U.S.E. will review the application package
to determine that support materials are present and that forms are complete. Support materials
include tax returns, paycheck stubs, W-2's, mortgage statements, property tax bills, and insm-ance
policies, when applicable.
Underwriting Analys~. The primary objective of an underwriting analysis for down payment
assistance is to ensure that the Agency's program requirements are met, the senior lien holder's
position is maximized, and the Agency's lien position is secure. U.S.E. will review the file for
accuracy and thorou*~mess and order the appropriate Lenders Policy of title insurance for the
amount of the second trust deed. An underu, ziting analysis will be prepared, addressing the
following items:
· Funding source requirements, e.g. housing cost ratios, maximum income levels, and
occupancy.
* Loan to value
- Stat~ of title to secure lien position
· Current and prior credit history
· Affordability
· Maximum participation of senior lender
The First Trus/Deed Lender's approval is dependent upon a commitment fi.om the Agency to
fund the down payment assistance. U.S.E. will issue a commitment letter to the First Trust Deed
Lender after all requirements have been met and upon approval by the Agency.
MCCAnd First Time Home Bu_ver Pr%oram$. U.S.E. w~l furnish normal bilateral escrow services
for each loan submitted under the MCC and FTHB Down Payment Assistance Programs.' These
services will be. pursuant to .written instructions and will include, but not be limited to, the
following:
· Acceptance of documents and funds for use in the respective escrow
· Drawing of necessary deeds
· Ordering ofreconveyance~ from trustees under Deeds of Trust
· Recording all documents which may be required
· Requesting and accepting demands fi'om beneficiaries, and if'time limits expire,
requesting amended demands for the use of submitted notes and Deeds of Trust
· payments of existing encumbrances
· Proration of taxes
· Coordination-and review of all MCC and FTHB Program requirements and Down
Payment Assistance Program requirements prior to close of escrow
· Oisburscmcnt of funds and furnishing closing statements to seller and Agency :~s
required
- The necessary instruments ,,,,'ill be recorded properly in .-,ccordance with escrow
instructions and prog~m requirements
· The appropri~,te title policies will be issued insuring the Agency's and lender's position
in accordance with escrow instructions.
LOAN DOCUMENT PREPARATION. Upon receipt of the lender's final approval letter, U.S.E.
will prepare the following customary loan documents to be submitted to escrow for execution by
the applicant:
Request for Loan Documents. This form is used by Agency staff.to request that loan documents
be prepared. It asks for information needed to fill out the documents correctly. The request may
be faxed to our office to speed up the process. We guarantee a five day turnaround on preparation
of documents. (Exhibit at the end of this section)
Deed of Trust. A ga'it'ten instrument by which a borrower (trustor) conveys title to real property
to a neutral third party (trustee) for the purpose of securing an obligation to a lender (beneficiary).
(Exhibit at the end of this section) .~.
Promissory Note, A wr/tten promise to pay or repay a specified sum ofmoney at a stated time or
on demand to a named person. In addition to the payment of principal, a promissory note usuaIly.
provides for the payment of interest. (T. xhibit at the end of this section)
Truth in Lending Disclosure Statement. Reveals to the borrower the actual cost of repaying
principal and interest over the term of a loan. Also includes a breakdown of all costs associated
with originating the loan. (Exhibit at the end of this section)
Request for Notice. Notice recorde, d by the holder of a junior lien requesting notification if a
Notice of Default is recorded under a prior Deed of Trust. (Exhibit at the endofthis section)
·
t¥otice o_fRi~,,ht to Cancel. Gives consumer notice of his&er legal fight to cancel loan transaction
within three (3) days of executing the Promissory Note. Must specify the maximum date and time
to which cancellation will be accepted. (Exhibit at the end of tbis section)
Control Instructiony. Governs the disbursement of funds held by the Fund Control Holder
between two parties to an Agreement (borrower and escrow company). Funds are disbursed,
without delay, upon receipt of an Authorization for Payment. (Exhibit at the end of this section)
U.S.E. will prepare any other loan documents requested by the Agency. The escrow holder will
return copies of executed documents to U.S.E..
DISB URXEMENT~ OF LOAN PROCEEDS.
Qt~tion I. Funds provided by'City, at an appropriate set time before each loan closing, with
approval to disburse loan proceeds to Sale escrow. U.S.E.'s fees will be disbursed fi.om the same
proceeds.
Qotion ~?. An Authorization for Payment will be submitted to the City for approval to disburse '
loan proceeds to the sale escrow fi.om a specialized Down Payment Assistance Program
Disbursement Account, funding individual project escrow's.
Allocated program funds are placed in an escrow account (in no less than four [4] installments
annually) and disbursed upon receipt of an Authorization for Payment.
FIRST TIME HOME BUYER CONSULTING SERVICES. U.S.E. has over 20 years of
experience in developing programs that provide for a higher level of loan and grants produced, at
a very low administrative cost to the Agency. U.S.E. offers comprehensive first time home buyer
consultation services in the areas of:
Pro?ram Devcloptncnt. U.S.E. can cvaluatc Agency's goals, proccdurcs, policies, and
performance to recommend program changes and/or implementation for an effective use of funds
and efficient use of staff resources.
U.S.E. can develop a report of parameters of funding sources used and prepare guidelines for
review and approval of stuff members (included but not limited to loan size; income
specifications; interest rote; deferred vs. amortized; term; loan to value; impound accounts;
reverification, etc.)
Document Design. According to agency guidelines, U.S.E. will design documents, for legal
review, including, but not limited to, Promissory Note~ Deed of Trust, Rider to Deed of Trust,
Loan Agreement, Truth-h-Lending Disclosure Statement, and Right of Recision Statement.
grogram 3t'anual Developmcn.~ U.S.E. will develop a training manual for lenders, Realtors, and
borrowers that discloses step-by-step procedures involved in blending a First Trust Deed Lenders
program and an agency's silent second or down payment assistance program. U.S.E. will meet all
requirements for AB1290 and federal' pro,m-am requirements for HOME, HOPE, and CDBG.
Lender's Training. U.S.E. will provide a comprehensive training session for the I'd.Trust Deed
Lenders for certification to participate in the Agency's First Time Home Buyer Program. Lenders
will be instructed on the pm-qualification of borrowers relating to the funding source'used by the
Agency, and how to combine the 1"* Trust Deed and the Secured Trust Deed for the maximum
benefit ofthe progr~n. Lenders will be educated in the differences of their loan sources and state
and federal sources utilized bythe Agency.
LO.AN PORTFOLIO M.aJ~AGE~L U.S.E. Community Services Group, Inc. (U.S.E.)
currently provides loan servicing and forbearance/foreclosure services to over 120 government
agencies nationwide. U.S.E.'s present S400,000,000 portfolio contains over 20,000 amortized and
deferred Ioans. U.S.E. has over 20 years of experience servicing complex loan terms and funding
source monitoring requirements.
Our staff of customer service representatives are continually available for both agency and
borrower inquiries. U.S.E. personnel keep informed of all State and Federal tax and regulatory
activity that may impact our clients. Our staff of computer programmers operate with state-of-
the-art equipment and systems that have been developed with the special needs of government
pr%m"ams in mind.
U.S.E. provides collection services for both amortized (monthly payment) and deferred loans.
Through a sophisticated tickler system, we also provide pre-plarmed tickler notification to client
agencies and borrowers.
Crucial to a successful collections et¥ort is the timely follow-up on delinquent accounts. U.S.E.
sends out late payment notices at 30, 60, and 90 days. Agency personnel receive Delinquent
Aging Reports on a monthly basis for their immediate follow-up with the individual borrowers.
Working as a team with Agencies, U.S.E. has been able to keep delinquency and default rates to a
bare minimum.
To enhance the management of loan portfolios, U.S.E. offers the impounding of taxes and
insurance or the monitoring of taxes and insurance. U.S.E. also offers the monitoring of title
status for the life of the loan (where available).
The political reality of a governrdent agency become lender is such that it is virtually impossible
for such an entity to' foreclose on delinquent borrowers. U.s.E. has developed a unique
foreclosure service where U.S.E. will buy the delinquent note for $I.00 and, under the Agency's
direction, go through the steps of foreclosure. Foreclosure proceeds are then returned to the
agency for $1:00. In conjunction with our foreclosure service, we provide a delinquency/default
follow-up and forbearance sen'icc designed to avoid foreclosure and at the same time minimize
financial loss to the Agency.
STANDARD LOAN PORTFOLIO MANAGEMENT AND COLLECFION,~. The £ollowing
is a description of standard loan servicing without specialized delinquency & default follow up.
To Activate A Deferred Collection AccounL The Agency will provide U.S.E. all necessary loan
information (loan terms, borrower's name, ~tc.) plus a copy of the Promissory Note and Deed of
Trust or Mortgage. (Exhibits'at the end of this section.}
Upon assurnption of servicing, U.S.E. will send to each bon'ower an explanation letter welcoming
the borrower and instructing how and when to make payments. (Exhibit at the end ofthis section)
Upon Agency request, U.S.E. will monitor the timely payment of property taxes and insurance
premiums. Tax service will be ordered to monitor property taxes for the life of the loan. U.S.E.
will notify the insurance agent in writing' that premium pa)~nents are being monitored by U.S.E.
and that notices of delinquencies or cancellations are to be forwarded directly to U.S.E.
Upon Agency request, U.S.E. will establish an impound account for any borrower for the payment
of taxes mad iastu-ance. Many borroWm's fund it easier to pay into aa impound on a monthly basis
rather than making large semi-annual or annual tax and insurance payments. If aa impound
account is established, U.S.E. will issue an annual coupon book, collect monthly impounds fi.om
the borrower, and disburse tax and insurance payments on the borrower's behalf.
At the Agency's request, U.S.E. will monitor the status of title for the life of the loan (where
available), notifying the Agency of any uru'eported title transference. At the Agency's request,
U.S.E. will notify the borrower th.at the loan is immediately due, based on the unreported
transference, and will take sufficient steps necessary, up to and including foreclosure, to activate
payoff.
'To Activate/fn/4mortizeff Collection/tccoun_L The Agency will provide U.S.E. all necessary
loan information (loan terms, due dates, borrower's information, etc.) plus a copy of the
Promissory Note and Deed of Trust. (Exhibits at the end of this section)
Upon assumption of servicing, U.S.E. will send to each borrower an explanation letter and an
annual supply of coupons. Both the payment coupons and explanation letter can be olTi:red in
Spanish and English. This, along with our bilingual staff, can better assist those customers Who
communicate more proficiently in Spanish. (Exhibits at the end of this section)
Upon Agency request, U.S.E. will monitor the timely payment of property taxes and insurance
premiums. Tax service will be ordered to monitor property tax for the life of the loan. U.S.E.
will notify the insurance agent in writing that premium paS'rnents are being monitored by U.S.E.
and notices of del'.mquencies or cancellations are to be forwarded to us.
Upon Agency request, U.S.E. will establish an impound/escrow account for any borrower for the
payment of taxes and insurance. 'Many borrowers f'und it easier to pay into an impound on a
monthly basis rather than making large semi-annual or annual tax and insurance payments.
U.S.E. will collect the monthly impounds from the borrower and disburse tax and insurance
payments on the borrower's behalf.
At the Agency's request, U.S.E. will monitor the status of title for the life of the loan (where
available), notifying the Agency of any unreported title transference. At the Agency's request,
U.S.E. will notify the borrower that the loan is immediately due, based on the unreported
transference, and will take sufficient steps necessary, up to and including foreclosure, to activate
payoff'.
In kceping with the provisions of the Agency's promissory notes, U.S.E. will assess and retain the
borrower's late fee when payment is not made within the grace period.
U.S.E. will hold the borrower's first monthly payment in reserve against future NSF checks.
.Account Inquiries. The Agency and borrowers will have continuous access to all loan account
information during normal work hours through U.S.E.'s customer service phone line.' In addition,
U.S.E. will provide instant hard copy account payment histories or other information through
facsimile transmission or U.S. mail.
Whenever requested by a borrower, U.S.E. will provide, without charge, a detailed statement of
all transactions relating to the borrower's payments and/or impound/escrow account.
SPECIALIZED CO~NITY LOAN PORTFOLIO SERI/ICE~ The Agency can request
these special services i/they answer the particular needs of your program. .
~£lTdavit O_t' Owner. U.S.E. will fot2ward an instructional lelte_r and Affutavit of Owner to each
borrower. The Affutavit requires the owner to swear to continued compliance with all
provisions of the promissory note and/or rehabilitation agreemen~ Such provisions may
include, but are not limited to, the following: continued residence,, timely payment of property
taxes;, ongoing hazard and flood insurance coverage; timely payment of ali sums due superior
lien holders; proper maintenance of the property; non-suboMinatiora If no response is received
within two weeks, [J.~.E. will se. nd a second letter requesting owner to sign and return the
affidavit U.S.E. wiZl compile responses and will forward original affutavits to the Agency.
.Additional Services. U.S.E. will provide loan payoff quotations and will perform reconveyancex
or Satisfaction of 3fortgage at th e borrower's expense, for any loan at th e Agency's request.
U.S.E. will provide loan amortization schedutes for any loan at the Agency's reques£
U.S.~ will provide for an' annual tickler notification to any borrower, should the Agency
' request ia
Per IRS regulations,. U S.E. will submit each year on behalf of the Agency, required 1098 tax
information returns for any borrower paying interest on any Agency loan. Such informational
returns will be issued on conforming magnetic tape 'as required by IRS.
U.S.E. will supply a year end account summary statement to each borrower if there has been
interest or impound activity on their accoun~ The report will indicate principal and interest
paid, the amount of pro, merits U.S.E. made on the borrower's behalf for taxes and insurance,
and any remaining impound balance.
Computer Linkage Packa_o~e. A key component to managing any large portfolio is the ease of
accessibili.tv to loan profile and payment history information. Having this critical loan
information provided to you through computer link provides your Agency with the most
efficient method of accessing your portfolio.
'U.S.E. has developed a computer linkage package designed to make available to your Agency,
electronically, loan status information that is normally received via hard copy reports or phone
btquiries. Your Agency's portfolio database is made available (on a read only basis) directly
through modem communication to your system's terminal With our computer linkage, Agency
staff can avoid phone inquiries and receive loan info. rmation instantly.. Our computer linkage
package is compatible with most IBM-based machines and features report printing capabilities
on most laser or inkier O'pe printers.
Some of the reports currently available for viewing and printing include the Account Master
File Information and the Account History Ledger.
To secure )'our portfolio's data base, the Agettc.}, ,,ill be issued a unique password code to
access its records. U. oc.E. is currently, developing a second level of computer linl'age usage that
provides a unique report gctteration capubilio,' Usittg tire complete loan database as its
ittformation source, the report generator will allow .}'our Agency the freedom to develop
unlimited reporting information through sorting, filtering, and formatting changes. The report
generator will aliow your Agency to create virtually any report required.
~. U.S.E, will natify the borrower in writing of delinquent payments at intervals of
thirty, sixty, and ninety days past the payment due date. Upon issuing the ninety day notice., no
further action will be required of US.E. regarding the delinquent account unless otherwise
instructed in writing by the Agency.
r aff. q~2~_~_q.~ For loans past an Agency specified delinquency date, US.E. will notify the
borrower by certified mail 'that the loan is seriously delinquent and a request for immediate
pa.}'ment of the amount due ,,ill be made. '
The letter will also provide the borrower an opportunity to respond, in written form, to state
justi./-table reasons why payments cannot be made.
At the discretion of the Agency, the letter may include an unf'ded copy ora Notice of Default
which will be recorded if no response is received from the borrower within fifieen days of
receiving the introductory letter. Ifa written statement is received from a borrower, US.E. will
begin the forbearance evaluation.
JustiJ-table reasons for non-payment may be specijTed by the Agency for which the borrower
must provide back-up information to document the claim. An e. rample of a justifiable reason
would be a dramatic loss of income or major medical e. xpens~
If the borrower's explanation is evaluated as legitimate, U.S.E. will provide the borrower with a
set of pre-determined options from which to choose a repayment method. These could include
50% payments for one year with interest accruing, defer ali payments for six months, defer
principal payments for six months, etc. The borrower would be required to choose one option,
sign the form, and return'it within 15 days. US.E. would then resume servicing under the
revised terms of the Agreement signed by the borrower. If the borrower's explanation is
evaluated as non-justifiable, U.S.E. will ~egin foreclosure proceedings upon Agency approval
Foreclosure (Deferred And Amortized £oan~_I. Ifa senior lien 'holder forecloses on property in
which the Agency is a junior lien holder, the Agency may choose to advance funds to bring the
senior lien current, and then foreclose on that advance. At the Agency's request, U.S.E. will
Conducl foreclosure proceedings.
If an unreported transfer of title takes place on a property upon which the Agency has a lien,
the/lgenc3, may choose to foreclose if demand for payoff is disregarded.
If a borrower has been non-responsive to [J.S.E. and/or Agency attempts to 'provide
forbearance, or the borrower's explanation is evaluated as non-responsive, U.$.E. will begin
foreclosure proceedings.
.
U.S.E. may foreclose on behalf of the Agency or under ils own name. To foreclose under
U.S.E.. 's name, promissory note ownership will be transferred f~.om the Agency to U.S.E, for
$1.00.
Reinstatement of the loan by the bo"rower will require aH payments necessary to bring the note
current plus all foreclosure costs incurred by U.S.E.. If reinstated, US.E. will sell back to the
Agent, the loan plus payments received for SL 00.
If the loan is not reinstated or paid off, tJ.S.E, will continue the foreclosure up to and including
tit e Trustee's sale of the property.
Upott sale of the prope.rO,, U.~7. E. will return all proceeds of the 3a[e to the Agency less
foreclosure fees and any other outside costs incurred. . .
U.S.E. will not sell any note and associated Trust Deed or 3tortgage originally owned by the
,4£cncy to arty other third parry.
For those loans that are reinstated by the borrower, U.$.E. will resume normal collection
set~,ice, s.
B. F2_QI~. The following reports represent standard loan servicing as well as specialized loan
servicing, and also additional reports on an 'as needed' basis.
Portfolio Status Report. The report provides a complete accounting per loan of the total
portfolio. The report identifies annual payments made, remaining balances, borrower's name and
account number, original loan balarice, interest rate, and loan term. For those deferred loans
accruing interest, the report shows ongoing interest accrued and the resulting increase in loan
balance. (Exhibit at the end of this section)
Frequer}Cy: One report forwarded monthly to Agency.
Current Mouth's Reconciliation Re.tx>rt. This report serves as a reconciliation for the loaa
paymeats remitted by borrowers. ManY borrowers who are not required to make regular payments
choose to do so. U.S.E. collects all payments and remits the total amount collected to the Agency.
(Exhibit at the end of'this section)
Frequency: Report, along with remittance check, forwarded to th'e Agency within ten working.
days of the close of the month.
Delinquent Aging Report. This report reflects delinquent accounts at the thirty, ~ixty, ninety, and
over ninety day levels. Borrower accounts moved into the forbearance or foreclosure process are
designated. (Exhibit at the end of this section)
' Frequency: One. report forwarded monthly to the Agency.
Loan Payoff Quotation. A Payoff Quotation indicates the amount required to fully satisfy the
balance owed on the loan as of the date of the quotation. The payoff figure is automatically
calculated by ~/dding the prorated interest, plus borrower's demand and Reconve)iance fees. An
interest per diem amount is also indicated to facilitate payoffs. (Exhibit at the end of this section)
Frequency: Available to the Agency.or payoffagent upon request
Loan Amortization Schedule. The Loan Amortization Schedule shows the breakout of principal.
paid and interest paid for each monthly payment for the term of the loan. This schedule is useful
in determining how much principal is still owed and how much interest has been paid at any
period of time in the life of the loan. This report can also be used in determining any balloon
amounts due per the terms of the note. (Exhibit at the end of this section)
Frequency: Available to the Agency upon-request.
Escrow Analysis ReP°r~. For loans requiring monthly impound/escrow payments for taxes and/or
insurance, U.S.E. corlducts an annual escrow analysis to determine the proper monthly payment a
given borrower needs to make in order t6 cover future tax and insurance payments. This report is
especially useful when impound/escrow requirements significantly change. Example: a marked
increase in property tax due to a re. assessment or supplemental tax assessment U.S.E. is presently
in compliance with Regulation X requirements for determining amounts which may be held in
escrow accounts under Real Estate Settlement and Procedures Act (RESPA). (Exhibit at 'the end
of this section) ,
Freo_uency: Available to the Agency upon request.
,.Vpccializcd £qan Portfolio t~fana?.cmcnt ,.tcn,iccs.~ A borrower is delinquent if payment is not
- received on or before its due date, irrespective of the grace period. ,4 borrower is in default of
the protnis$oty note when two pa.}~ments are past due_ ' U.S.F_.. Cont~tunity Setn,ice.$ Group
(U.S.E.} proposes to provide treatment for mort£ages in delinquency and default through
positive pressure that is fair but firm. If delinquent borrowers have a positive attitude toward
their obligations, we should be able to help them return to a current payment status. The
following policy of follow-up will be adhered to by U.S.F_ to minimize loss of income to the
Agency.
lYeW BQrrowcr Delinquency. Early delinquency can be a sign ora chronic delinquent borrower.
U.$.E. forwards its first letter to new delinquent borrowers at 5 days past the first payment due
date_ If there is no response, a second letter is sent at fifieen da.},& Borrowers are invited to
contact our office to discuss difficulties they may be facing in meeting their obligations. If no
response is received to edther letter, due diligence phone calls begin at 31 days delinqu'ent
(Exhibit at the end of this section,) '
Delinquenc3_,/Default Letter PrQduction. IVhite most borrowers },,ill pay without much
individual attention, delinquencies will rise because some borrowers, left alone, will fatl into
poor paying habits. Therefore, letters of varying tone and composition will be sent at 15, 30,
and 60 days past the payment due date_ The letters onphasize the seriousness of the situation,
the potential for loss of the borrower's home, and demands immediate payment (~hibits at
the end of this section} '
Due Dil~ence Phone Caltc. Phone calls are placed to borrowers beginning at 31 days
delinquen£ Telephone contact offers se~,eral advantages: it demands attention; it interrupts
other activiO,; it establishes a personal communication; it requires immediate response_ The
objective of the phone cail is to comfnunicate to the borrower that the situation is serious and to
gain a commitment for repayment. Three due diligence phone calls are made to the borrower
before a recommendation to foreclose is forwarded to the Agency.
.
Confirmation £etter~. Contact with borrowers is used to solicit commitments to repay past due
amounts. .4 borrower will be provided with the opportunity to bring the [oan current
immediately, but no longer than within 6 months. Once a commitment is gained, U.S.F_ will
forward a confirmation letter to document both the phone call and the commitmen£ The
revised payment plan of no greater than 6 month's duration is then implementec~ Default from
this plan will cause U.S.F__ to recommend foreclosure. (F-rhibit at the end of this section} '
Hardsh(o Situatiqn_~. A hardship is defined as a situation or set of events or circumstances
beyond the normal control of the borrower which prohibits the borrower from adhering to the
planned repayment schedule_ If a borrower states, either verbally or in writing, that a hardship
situation exists, U.S.F~ will develop in coordination with the borrower a fully documentedJ~de_
The following documentation will be provided to the Agency for its final approval .of a
recommended forbearance plan: Lelter from borrower requesting/lgency's consideration of
hardship; nature of the hardship; expected duration of the hardship; evidence to substantiate
hardship; and, Forbearance Plan Proposal (Exhibits at the end of this section}
If the Agency approves the Forbearance Plan Proposal and executes the agreement with the
borrower, U.S.E. will resume loan servicing under.the new payment plan. The file will be
tickled for follow-up at the expiration of the temporary plan.
· U.S.F~ 's objective is to formulate aplan to bring the loan current as soon aspossible_ However,
in light of the Agency's original purpose of assisting Iow/moderate income and disadvantaged
citizens of its communiO,' U.S.E. may recomme_nd forbearance plans that defer all or part of the
regular repayments, for a specigqed period of time-
Rccommc, dation TO Foreclose._ The mortgage transaction and all collections cffort~ arc
predicated on the assumption that the borrower is motivated attd able to meet the mortgage
obligation. ,4 decision to foreclose is based on an analysis of the individual loan. U.$.E. will
evaluate the borrower with particular emph~ on 0 b~ic moavation; 2) abiliO, to pay; attd 0
attitude or level of cooperatiom If a borrower h~ been uncooperaave, nonr~ponsive, or
unwilling to cure the ~t~g defauR by a~ re~onable mean& U.S.~ will recommend
foreclosur~ Th~ step ~ taken be~e~ 90and 120 da),~ The borrower will receive a~mal letter
s~t by c~ ma~ If no r~go~e ~ re~ed w~ 5 days, U~.~ w~ ~u~ a formal
reco~dation to foreclose and w~ do~~ ~ st~s tak~ to effe~ a cur~ (~R at the
end of th~ sectbn)
~oecialized Servic~ For ~ting Po~Foliog In the takeover of ~t~g poUf olios w~h high
d~au~ rat~ or ~pl~tation of Dd~qu~q and Defau~ Follo~up to po~olios pr~ently
being se~ed by U~.~, we w~ separate a~ lo~ whi~ are 3 or more paym~ detinquenL A
notice of defau~ stat~ and a requ~t to conta~ our office w~ be sent by l~. If no r~ponse
~ received in ~o wee~, U.S.~ w~ s~d a se~nd ~er requ~t~g ihat &e borrower contact
our offic~ If afl~ one week no r~po~e ~ ~de to ~ second l~er, U.$.~ w~ a~empt a
phone calk Ifa co~~t for rep~t w~ s~ months ~ ga&ed, U.S.~ w~ docum~t
~e co~~t wRh a ~nf~tion l~ ~d w~ r~ume sem~g. ~~ at the ~d of th~
section)
FORB~NCE P~NS. U.S.~ 's colle~n ph~sophy ~ to work wRh mortared delinquent
borrowe~ to ~s~t th~ ~ br~g~g ~ ~ ~rr~L ARhough a borrow~ may not be
capable of curing a defauH ~ed~tely, U.S.~ ~n fa~Hate the d~elopm~t of a forbearance
plan which will allow the borrower to ~ up ov~ a specked period of tim~ In ce~ain
circu~tanc~, U.S.E may reco~end that the pro~so~ note be perman~tly modred to
change the monthly paym~t amount ~or to ~d the loan ter~ U.S.~ requir~ the
borrower's notarized signature on the forbear~ plan wh~ se~ ~ formal confirmation of
. repay~t r~pons~H~i~ (~ib~ at ~e ~d of~ s~n}
Formal~orbearance plans are ~p~aHy ~ed for defau~ of 9~ days. A forbearance plan of
l~s than s~ monks duration ~ ~t~ by ~e borrower and ~ediatdy ~lem~ted by
U.S.~. Formal mod~gatio~ to prom~so~ note ter~ and forbearance pla~ of greater than
s~ month's duration are fo~arded to the Agen~ for pre~pprovaL An Ag~ staff pe~on ~
requ~t~ to approve the plan before the agre~nt ~ ~cuted by the borrower. Once signed,
U.S.~ will implement the new payment sche~l~ ShouM a borrower default from the new
payment schedule wRhout ca~e, U.S.~ w~ reco~d foreclosur~
R~L PROPER~ ~CROW SER~C~. U.~ prM~ ~e~on not only a prof~sion~l Real
Prope~ ~crow Div~ion but one that h~ a sign~gant unde~tand~g of government
program. ~e b~li~e ~tat the b~t ~ter~ of ~e Agen~ will be be~er se~ed when an ~crow
firm has a thorough knowl~ge of program para~e~ ~ myriad of ~crow ag~ with l~tle or
no knowledge of the program CouM poss~ly be ~igned the t~k of coordinating docum~,
L~de~, and fun~. ~t~ can create unnec~sa~ delays while staff educat~ ea~ ~crow agent
on each ioan.
U.S.E. can coordinate not only the movement of documents and funds between the Lender and
the ~4gency, but can manage funds more cost effectively since the underwriting function of the
Down Payment/lssistance Program and program funds will be under one roof. ~4gency funds
will not be transferred until absolutely required. 14qth a thorough knowledge of program
requirements, our escrow officer will provlde the added security of cross checking documents to
ensure that all conditions are met between all parties. ~2cecution of loan documents and notary
services can be provided at the z~ge. ncy location.
6. SCIiEDULE OF PERFORMANCE
_ Because U.S.E. is involved in so many similar programs as the FTHB program requested by
Tustin, our boiler plate work is already complete. We are prepared to have program design and all
applicable forms, manuals, and guidelines first draft completed by the end of December 1996, and
with Tustin's approval, all documents will be completed and ready for execution of the first loans
expected for this program by January 21, 1996. U.S.E. will be available for an interview the week
of December 2, 1996.
The processing of individual Second Trust Deed Loans begin at the same time as the first
trust deed loans. The First Trust Deed Lender sends a copy package to U.S.E. at the same time
their loan goes to their underwriter, so the loans are underwritten simultaneously. The Lenders
are trained at the Lender's Training Session provided by us on what documentation to collect at
the onset of a potential loan on behalf of the Agency. Should additional information be required
for the Agency's policies to be adhered to, U.S.E. will gather additional information for the
underwriting process. If the package is complete when it is received by us for underwriting, the
loan will be underwritten and documents prepared within 5 working days, and will then be sent to
the real property escrow company for execution with the First Trust Deed Loan documents.
U.S.E. coordinates this procedure for maximum sen, ice the Agency and its borrowers. Escrow
will send the second trust deed documents to the Agency for your execution. U.S.E. will then
receive a copy of the recorded documents to set up the loan servicing portion of the process.
Borrowers will receive a Welcome Letter fi.om U.S.E. advising them to send any payments they
may wish for the deferred portion of the HOME loans, or the deferred Redevelopment loans, and
will provide our address to do so. When the amortized period begins, borrowers will once again
be directed where to make pa. yments,.as weil as be provided with a Coupon book.
7. FEE STRUCTURE
Consulting services requested in proposal, such as program design and vendor training, shall be
provided fi.ce of charge.
First Time Home Buyer Consulting Sen'ices not specified in RFP will incur a charge of $75.00
per hour. Underwriting City Direct Deferred andAmortized Loans (per loan): $330.00.
Cancellation fees will be ',4 of the above fees plus outside costs if loan is canceled prior to delivery
of full underwriting analysis to City.
Loan Document Preparation And Recording: S155.00 pitts outside costs.
·
Cancellation fees will be 5;65.00 if'outside services are ordered but no documents are prepared;
5;125.00 if documents are prepared and loan is canceled.
Specialized Down Payment Assistance Program Disbursements: $95.00 per nine transactions.
Optional, depending on the process the Agency uses to fund loans.
Loan Portfolio Management DEFERRED $80.00 per loan for the life of the loan (one time fee).
Deferred with monitoring of taxes and insurance: One time charge of $105.00 per loan for the life
of the loan plus a one time outside vendor tax service fee. Deferred with monitoring of taxes,
insurance, and title: One time charge of $125.00 per loan for the life of the loan plus a one time
outside vendor tax service and title protection fee. Deferred with impounding of taxes and
insurance: One time charge of. 5;60.00 plus a one time outside vendor tax service fee plus $6.50
per month per loan.
AMORTIZED: One time Ioan set-up fee of $25.00 per loan plus 1/24 of I% per month of original
principal loan amount with a minimum fee of $8.50 and maximum fee of $18.00 for each loan in
the portfolio.
U.S.E. will charge a flat-fee of $8.50 per payment for receiving occasional payments on deferred
loans. U. oe.F_ will charge alee of $10. OO for each ticMer notification, oehould Agency transfer
its portfolio to another servicer, U. oe.F., will charge a portfolio transfer fee of $25.00 per loan
being serviced
Specialized Loan Portfolio Management. A3IORTIZED (one time loan set up fee): 525.00 per
loan plus 1/24 off%per month of original principal loan amount with a minimum fee orS&50
and ma. rimutn fee of 525.00 for each loan in the portfolio. An additional DFU sen'icing fee of
53.50 per loan will be charged for all amortired loans in the portfolio.
Real ProperO, Escrow Services: 5200. OO plus $1. OO per 51,000 of sales price.
For the close of each escrow, applied to both buyer and seller, 'based on the purchase price of
the property.
Specialized Loan Portfolio Managemeng AMORTIZED (one time loan set up fee): $2$.00'per.
loan plus 1/24 of l% per month of original principal loan amount with a minimum fee of $8.50
and maximum fee of $25.0O for each loan in the portfotio. An additional DFUservicing.fee of
$3.50 per loan will be charged for a~. amortized loans in the portfolio.
Borrower Affidavit: $75.00 per file. To provide letter and affidavit to borrower and receive
affidavit and compile repot-~
Foreclosure (a one.time fee) A one time charge of 5250.00 to transfer note ownership and
prepare documents to corning, ncc foreclosure proceedings and to manage the foreclosure
process on behalf of the Agency.
In addition to tlte above foreclosure service fee, US.F_. will be reimbursed for other costs
incurred in the foreclosure process such as, but not limiIed to, conventional legal fe~s, sheriffs'
deposits, bankruptcy closing costs, fees set by law, etc_ These fees will be accurately quoted on a
case-by-case basis upon. request by the Agency and they will be within all applicable statutory
limits.
Wo cash deposit will be required from the Agency at the time foreclosure proceedings are
btstituted, pursuant to an e_r. ecuted agreemeng However, U.S.E. 's fee for services rendered, and
its costs and other charges will be due and payable, by the Borrower upon r~instatement (or fail
· payment of any Deed of Trust or Mortgage under foreclosure), pursuant to an agreement; or
payable by the Agency at the time of Publication of any Notice of Trustee's Sale of the real
property encumbered by sam Deed of Trust or Mortgage; or payable by the Agency .Ewe (5)
months from the date foreclosure proceedings are instituted in connection with such Deed of
Trust or 3£ortgage, whichever event will sooner occur. ·
Loan Forbearance Services (one time fee): 5250. OO for each loan for which U.S.E. provides
forbearance services.
NOTE: Tax service and title protection fees are outside costs passed through fi.om outside
vendors and are subject to marketplace increases, beyond the control of U.S.E.. Impounding of
taxes and insur~ce is included with service at no additional cost except for one time outside
vendor tax service fee. Mqnitoring of taxes and insurance is included with service' at no additional
cost except a one time outside vendor tax service fee.
8. PAYMENT SCHEDULE
The costs for FI'HB loans are usually rolled into the loan themselves as they are soft cost
eligible. The borrower is not required to provide more cash up fi.ont than is already necessary for
the down payment and closing costs. U.S.E. receives its fees directly fi'om the escrow loan
closing. U.S.E.'s fees are included in the Good Faith Estimate to the borrower by the First Trust
Deed Lender.
9. SUMMARY OF BENEFITS
U.S.E. services are designed to meet the sPecial needs of government agencies. With over
two decades of experience and efficiency, LI.S.E. can offer a wide range of services at a
reasonable cost. If you need more' services, we can add them; if you need fewer, 'U.S.E. 'is
available on an "as needed basis."
Confidence. U.S.E. has proven its commitment to serving agency needs for two decades. With
everS, regulatory change faced by agency staff, we have adapted our services to meet changing
requirements. Although U.S.E. is public sector focused, we are private sector professional. A
minority owned firm, U.S.E. is a licensed, bonded escrow corporation with a $1 million fidelity
bond. We are an FHA non-supervised seller and servicer which assures the agency that their loan
portfolios are serviced to FHA standards:
Experience. Since 1975, U.S.E. has provided specialized administrative services to Community
Development, Economic Development, Redevelopment, Housing Authorities, and Non-Profit
organizations. With a comprehensive menu of services, we serve over 100 agencies nationwide.
U.S.E. has served the National Association of Housing and Redevelopment Officials (NAHRO) at
the regional and national level.
Sen'ice Flex-ibiliO: Our services are desi..~ed to meet )'our specific needs. All choices remain
with you. We will work with you to complement existing staffcapabilities.
Cost-Saving Operations. Through our experience and efficiency, we can offer a wide range of
services at a most reasonable cost.
PersonalAt~emtion. We pride ourselves on our reputation for strong attention to our clients. Our
field representatives are available to you at any time.
Comprehensive 3fonthly Reporting. Reports are designed to provide you with easy tracking of
each applicant. Each pr%re'am, owner occupant, and rental property, is reported on separately.
Fiduciary Trust Relationship. Only licensed escrow agents provide you with the built-in
safeguards needed in the handling of borrower's funds.
Quick Turnaround On Disbursement Of Checks. U.S.E. Community Services Group (U.S.E.)
ode .rs overnight turnaround for disbursement chec -ks. This eliminates Contractor inquiries as well
as 3'our personnel's time spent handling calls.
Better Use Of Agency Personnel Our comprehensive programs free your staff to run your own
operations more efficiently. This results in more loans being processed for your program.
Computerized Records. Our computerized records ire designed to assist management as well as
provide an excellent audit trail for Agency and HUD monitors. We have redesigned and added
reports as we identify a new need.
Reliable Document Verification. Our professionally trained escrow personnel prepare and veri~,
all escrow documents. By law we keep all records of your transactions for five years after
closing. These records are available to you upon request.
MANA GEMENT AND PARTICIPA TING PERSONNEL
The following key staff members of U.S.E. Community Services Group, Inc. (U.S.E.) have
extensive experience with federal and state regulations and are responsible for training of line
personnel.
Gary Parsons, Vice President and £recutive Director. A member of the Board of Directors, Mr.
Parsons joined the f'um in 1982 as Director of Community Services. Mr. Parsons is the Vice
President of Member Services of ~e National Association of Housing and Redevelopment
Officials (NAHRO). An expert in government-assisted housing purchase programs, Mr. Parsons
holds a Bachelor of Science degree in Finance from California Polytechnic State University at San
Luis Obispo. '
Donna Rush, Regional Manager. Ms. Rush is responsible for marketing outreach and client
services for the western United States. Joining U.S.E. in 1989, Ms. Rush has a significant
understanding of federal and state regulations pertaining to the administration of rehabilitation,
economic development, first time home buyer and prevailing wages compliance. Ms. Rush
directly facilitates the resolution of client issues as liaison to operations. Ms. Rush holds Bachelor
of Science degree in Business Administration from the University 0fPhoenix.
Kay Aforris, Assistant Vice gresiden~ Is respoas~le for overall field support activities and new
program designs. Ms. Morris has been with U.S.E.'since 1986. She has a background in market
research, lobbying, and non-profit fundraising and community program delivery.. Ms. Morri~
designs workshops, is a frequent speaker and, as a member of the company's consultant team,
specializes in streamlining of rehabilitation programs and grants writing. She holds a Bachelor of
Arts degree in Speech fi.om Illinois State University. ..
Dean Sukeena, Regional Manager. Is 'respons~le for client relations in our northeast region.
Mr. Sukeena has over seven years of mortgage banking and loan servicing experience,
specializing in the needs of the Iow to moderate income borrower. He graduated with a B.A. in
economics from the University of Maryland.
Mr. Sukeena will act as a customer service representative on contractual issues' and. policy
decisions. He will be available to your Agency on a continuing basis to review our service and
resolve any issues.
W'dliam R. Green, Regional M'anager. Is respoas~le for marketing outreach and client services
for the Southeastern United States. Mr. Green has over five years experience working in
residential and commercial real estate, has worked for a large non-profit organization in Tampa on
the federal HOPE 3 Pro_re'ara, and has over twenty years experience in customer service. He holds
active Florida Real Estate and Mortgage Broker licenses. Mr. Green holds a Bachelor of Arts
degree in Philosophy fi.om Simpson College in I. ndianola, Iowa
Er& J. (Ril9 Stbencke_I, Operations Manager/Vice President Has overall responsibility for
each of the departments (Loan Processing, Loan Documents, Funds Disbursement, HOME,
HOPE, Rental Rehab, Collections, and Davis-Bacon). Mr. Stuenckel has over eighteen years
experience as a f'mancial manager. He holds a Bachelor of Science degree in Business
Administration fi.om Buctmell University. Rik Smenckel has been with this fm-n since 1986.
Michael Torres, Fimds Disbursement Manager. Oversees daily work flow in the Funds
Disbursement and Cash Management Division as to accuracy, completeness of escrow hles, and
communication with agencies. Mr. Torres also manages Davis-Bacon Wage Compliance
Monito. ring and Payroll service as well as the Loan Document Preparation Department.' He is
responsible for the delivery of our Disbursement service to over 120 ager~cy clients. He has been
with the firm since 1987.
Brenda Gordon, Loan Servicing Manager. Oversees .U.S.E. Loan Collections and
Forb.earance/Foreclosures. Ms. Gordon has been with U.S.E. since 1983 and has worked as a line
person in the department she.now supervises. Ms. Gordon is a notary and has obtained a real
estate license. She supervises a staffoften service representafi~,es.
EXHIBIT "B"
SPECIAL REQUIREMENTS
.
.
o
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.
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.
o
The "Force Majeure" provisions described in Section 3.3 are hereby waived.
The "Liquidated Damages" provisions described in Section 7.6 are hereby waived.
Consultant shall present to Agency certificates of insUrance and endorsement forms verifying
that the Consultant has the insurance as required by this Agreement. Said forms shall be
reviewed and approved by the office of the City Attorney of the City of Tustin. A Certificate
ofl. nsurance Form is attached.
·
If the Contract Officer determ/nes that a product deliverable is unacceptable, either before or
after a draft or final draf~ is issued, because it did not conform to the specifications set forth in
the Agreement, the Consultant shall submit a revised report or product at Consultants' expense.
progress repons shall be submitted by Consultant when requested by the Contract Officer. All
progress reports must be signed by the Consultant.
Consultant shall utilize those professional personnel and subconsultants to perform services
required under this Agreement as identified in Consultants' Proposal. No substitution shall be
made without the advance written approval of the Contract Officer, after review of the
proposed replacement's experience and qualifications with a written explanation of the
necessity.for the change. No increase in the compensation or reimbursable salary rates will be
allowed when personnel or firm substitutions are authorized.
Consultant shall remove and replace project personnel or subconsultants assigned to project
personnel or subconsultants assigned to project who do not perform assigned duties in a
manner satisfactory to the Contract Officer.
Consultant shall be required to meet with Contract Officer of the Redevelopment Agency to
the extent necessary or desirable to discUss progress on the Scope of Work at contract Officer's
direction.
-10-
EXHYBIT "C"
SCHEDULE OF COMPENSATION
The costs for this first time homebuyers program are u'sually rolled into' the loan themselves as they are
soft cost eligible and are therefore paid for by the borrower. The borrower is not required to provide
more cash up front than is akeady ni~.ess~ for the down payment and dosing costs. U.S.E. will
receive its fees directly from the escrow loan dosing. U.S.E.'s fees are included in the Good Faith
Estimate to the borrower by the First Trust Deed Lender.
-11-
EXttlBIT "D"
SCHEDULE OF PERFORMANCE
Attached hereto is the schedule of performance for the scope of services outlined in Exhibit A.
The "start date" for this schedule of performance is agreed to be the date this Agreement is
executed by Agency.
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TO:
CITY OF TU""'W AND, TUSTIN COMMUNITY REDEV ~MEN'i' AGENCY
CERTIFICATE OF ;RANCE AND DESIGNATION OF NAb. _. ADDITIONAl_ INSURED
NO MOD/F/CA TIONS OR ADDITIONS MA Y BE MADE TO THIS FORM
CITY OF TUSTIN and
PROJECT:
TUSTIN COMMUNITY REDEVELOPMENT AGENCY
P.O. Box 3539
TustJn, CA 92681-3539
NAME AND ADDRESS OF INSURED CONTRACTOR:
NAME AND ADDRESS OF INSURANCE AGENCY:
COMPANIES AFFORDING COVERAGE
'MUST HAVE BEST'S RATING OF AT LEAST A
.
Company Letter A: ' '
_
Company Letter B: '
Company Letter C:
Company Letter D:
_
Company Letter E:
_
GENERAL LIABILITY
[ ] Commercial
General LJa biiJ~'y
[ ] Occurrence Basis
[ ] Owner's & Contractors'
Protectfve
[ ] Broad Form Prop. Damage
[ ] Explosion, Collapse,
Underground Hazards
AUTOMOBILE LIABILITY
{ ] Any Auto
[ ] Ail Owned Autos
[ J Scheduled Autos
[ ] Hired Autos
[ ] Non-Owned Autos
[ ] Garage Uability
EXCESS LIABILITY
[ ] Umbrella Form
[ ] Other than Umbrella Form
WORKERS' COMPENSATION
AND EMPLOYER'S LIABILITY
General Aggregate $
Prods-Comp/Ops Agg. $
Pers. & Advg. Injury $
Each Occurrence $
Fire Damage
(Any One Fire) $
Company Letter F:
This is to certify that the policies of insurance ~ted below have been issued to the insured name above, are in force at this ~Jme, that the City of
Tustfn and the Tus~Jn Community Redevelopment Agency are named add'~onaJ insureds thereon as respects claims arising in connection
the hereinabove-named Project and that such insurance shall be pdmary with respect to any other insurance in force procured by either the City
of Tustin or the Tustin Community Redevelopment Agency.
P°licy Policy
Type of Insurance Policy Number Effective Date ExpiralJon Date Ail Um~ in Thousands
Medical Expense
(Any One Person)
CSL
$
$
$
$
$
Bodily Injury
(Per Person)
Bodily Injury
(Per Occurrence)
Property
EACH OCCURRENCE AGGREGATE
$_ $
STATUTORY
$ Each Accident
$ Disease-Policy Limit
$-~~_ Disease-Each Employee
OTHER
)escription of Operations/LocationsNehicles/Special Items:
s certified that a waiver of subrogation is hereby to the City of Tustin and the TustJn Community Redevelopment Agen
Compensation insurance: The Issuing company will give thirty (30) days written notice to the City of TustJn and the TustJn
as pertainsW°rkers
,~munity ~Y to ~he terms
Redevelopment Agency prior to modification or cancellation.
,TE ISSUED:
Authorized Representative of the above-named in~,
EXHIBIT C
COMPENSATION
Tustin First Time Home Buyer Standard Fees
Consulting sen'ices requested in proposal, such as program design and vendor training, shall
be provided l?ee ofcharge.
['nderwritinl! City Direct Deferred and .3anortized Loans (per l°an): 5;330.00
Cancellation l~es will be ~: of the above flees plus outside co~g if lozm is canceled prior' to
delivery of full unde~vriting analysis to City.
I.oan Document Preparation And Recording: $155.00 plus outside costs
Cancellation fees will be 5;65.00 if outside sec'ices are ordered but no documents are
prepared: 5; 125.00 ifdoct,ments are prepared and loan is canceled.
Tustin First Time Home Buyer Non-Standard Fees
l,oan Portfolio .X, lana??.ement:
DEFERRED \VI'FIt .~IONITORIN(; OF 'FAXES, INSt'IL-XN(.'E. ANI)'I'I'I'I.E: ()ne
lime charo~e o1'5125.00 per loan for the life of the loan plus a one time outside ,,'endor
tax sen'ice and title protection fee.
t.)('T57DE 17~.\'D()R F-EES ~'(."LUDE: 1) PlRT-Chicago Title Report $105.00 2)
Rccordmg Fees-per Countx' Fees 3) 'Fax Set'vice Fee-S59.00
NOTE: These fees are subject to change, and are, not regulated bx' USE Conmmnitv
Ser¥ices Crroup. h~c. With the exception ora 55.00 handling fee on the Title Report. all fees
-',re charged to cliem as [.'SE is charged.
.k.XlOR'rlZED: One time loan set-up fee of 525.00 per loan plus 1/24 of 1% per
month of ori£inal princip',d lom~ mount with a minimum fee of 58.50 and maximum
tee ol'518.00 1'or each loan in the portfolio.
L'.$.E. ~'ill char§e ~ lla~ fee of $g.50 per paymeni for receiving occa.~ionai paymenL~ on
del'erred loans. U.S.E. will charge a fee of $10.00 for e~ch iickler notificalion. Should
.-\gency transfer its portfolio to another ser¥icer, U.S.E. will ch~r§e a portfolio transfer fee of
$25.00 per loan bdn§ ser¥iced.
Specialized Loan Portfolio Management..-~c\IORTIZED (one time loan set up Ibc): S25.00
'per loan plus 1 24 or' 1°o per month of original principal loan amount with a minimum l'ce of
S8.50 and maximum the of S25.00 for each loan in the portfolio. .-\n additional I)F['
sen'icing fee ofS3.50 per loan will be charged Ibr all amortized loans in the portl~.)lio.
Real Property Escrow Sen'ices: S200.00 plus 5;1.00 per 5;1.000 ofsales price.
For the close of each escrow, applied ~o both buyer and seller, based on fi~e purchase price of
~l~e property.
Specialized Loan Portfolio .Xlanagement..-LXlORTIZED (one time loan se! up fee): S25.00
per loan plus 1 24 of 1°o per month of original principal loan amoun! with a minimum fee of
58.50 and maximum fee of S25.00 for each loan in the portfolio. .~ additional DF/'
servicing fee of $3.50 per loan will be charged for all amortized loams in the portfolio.
Borrower .-xJfidavit: S75.00 per tile. To provide letter and all]davit !o borrower and receive
affidavit and compile report.
Foreclosure (a ox'~e time fee) A one time charge of S250.00 to trarkffer note ownership and
prepare documents to commence foreclosure proceedings and to manage the foreclosure
process on behalf of the .2moency.
In addition to the above foreclosure service fee, U.S.E. will be reimbursed for other costs
incurred in the foreclosure process such as, but not limited to, conventional legal fees,
sheriffs' deposits, bankruptcy closing costs, fees set by law. etc. These fees will be
accurately quoted on a case-by-case basis upon reclt,est by lhe .-\gency and lhev xx'ill be
xx ithin all applicable statutop,' limits.
No cash deposit will be required I?om the Agency at the time lbreclosure proceedings are
instituted, pursuant to an executed agreement. However. U.S.E.'s fee for sen'ices rendered.
and its costs and other charges will be due and payable, by the Borrower upon reinstatemenf
(or fi~ll payment of any Deed of Trust or Nlortgage under foreclosure), pursuant to an
a~eement: or payable bx' the Agency at fl~e time of publication of any Notice of Tmstee's
Sale of the real property encumbered by said Deed of Tm~ or ~lortgage: or payable by the
Agency five (5) monlhs from the date foreclosure proceedings are instituted in connection
with such Deed of Trust or .klortgage. whichever event will sooner occur.
I.oan Forbearance Services (one time fee): S250.00 for each loan for which U.S.E. provides
l'brbearance services.
N()-I'E: Tax service and title protection fees are outside costs passed through from outside
vendors and are subject to marketplace increases, beyond the control of U.S.E.. Impounding
of taxes and insurance is included with sen'ice at no additional cosl except Ibr one time
om.qde vendor tax sen'ice fee..X, lonitoring &taxes and insunmce is included with sen'ice at
no additional cost except a one time outside vendor tax serYJce fee.
First Time Home Buyer Cot~sttltittg Seiq'ices ttot specified itt RFP will Otcttr a charge of
$ 75.110 per hottr.
Specialized Doxm Pax~nen! Assistance Program Disbursements: S95.00 per nine
transactions. Optional, dependh~g on the process the Agency uses to fund loams.
DEFERRED S80.00 per loan for the life of the loan (one time fee). Deferred with
monitoring of taxes and insurance: One time charge of $105.00 per loan for the liti~ of the
loan plus a one time outside vendor tax sen'ice fee. Deferred with impounding of' taxes and
insur;mce: One time charge o£ S60.00 plus a one time outside vendor tax sen'ice l~e plus
S6.50 per month per