Agenda 01/28/2014 Item #16D 91/28/2014 16.D.9.
EXECUTIVE SUMMARY
Recommendation to amend the State/Federal Subordination Loan Policy to allow future
subordination requests to include impact fee deferral liens.
OBJECTIVE: To support the continued affordability of housing by allowing State/Federal housing
assistance program recipients the advantage of subordinating their liens with Collier County.
CONSIDERATIONS: In order for homeowners to refinance an existing first mortgage to a lower
interest rate, thereby reducing their monthly housing expense, subordinate lenders must either be repaid or
agree to remain in a subordinate position. On June 25, 2013, agenda item 16.D.9, the Board approved the
current State/Federal Subordination Loan Policy. Under the current Policy only State or Federal grant
program loans may be subordinated.
Homeowners Roderick & Tania MacDonald, recipients of housing assistance request that an impact fee
deferral lien on their property be subordinated to a mortgage used to refinance. This request cannot be
administratively granted because impact fee deferral liens are not included in the Board approved
State/Federal Subordination Loan Policy. In addition, the question or whether or not to grant the
McDonalds' request, even through policy change, was further complicated by the fact that their impact
fee deferral lien was in a first priority position. Because the advantage of overall housing affordability
through refinance outweighs the risk of loss of priority position, staff recommends inclusion of all
State/Federal liens such as impact fee deferral liens in the Policy, regardless of priority position, so that
the McDonalds and future similarly situated persons may benefit from a reduced interest rate housing
payment.
The overall advantage of a reduced housing payment allows for the continued affordability of the home
and a less likely chance of default from the homeowner.
Accordingly, Staff requests the following approval from the Board;
1) Contingent upon its compliance with the State/Federal Subordination Loan Policy, subordinate a
SHIP Impact Fee Deferral lien issued to Roderick and Tania McDonald in the amount of
$10,498.98. Recorded in Official Records Book 3551, Page 3903.
2) Allow all liens issued under a State/Federal grant program to be included in the current
Subordination Policy, effective immediately.
FISCAL IMPACT: The recording costs associated with the subordination agreement will be borne by
the homeowner. This item has no immediate fiscal impact; however, with the impact fee deferral lien in
2nd position, if foreclosure occurs, the SHIP Trust Fund may not be fully repaid.
LEGAL CONSIDERATIONS: This item has been approved for form and legality and requires a
majority vote for Board action. JAB
GROWTH MANAGEMENT IMPACT: None
RECOMMENDATION: To approve the subordination of an SHIP Impact Fee Deferral lien issued
homeowners Roderick and Tania McDonald and to allow all future subordination requests to include all
liens issued under State/Federal grant programs in the State/Federal Subordination Loan Policy.
/0"1 Prepared By: Priscilla Doria, Grant Coordinator, Housing, Human and Veteran Services
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1/28/2014 16.D.9.
COLLIER COUNTY
Board of County Commissioners
Item Number: 16.16.D.16.D.9.
Item Summary: Recommendation to amend the State /Federal Subordination Loan Policy
to allow future subordination requests to include impact fee deferral liens.
Meeting Date: 1/28/2014
Prepared By
Name: DoriaPriscilla
Title: SHIP Loan Processor,Housing, Human & Veteran Servi
1/2/2014 1:08:56 PM
Submitted by
Title: SHIP Loan Processor,Housing, Human & Veteran Servi
Name: DoriaPriscilla
1/2/2014 1:08:58 PM
Approved By
Name: KushiEdmond
Date: 1/3/2014 3:34:35 PM
Name: SonntagKristi
Date: 1/13/2014 10:05:08 AM
Name: GrantKimberley
Title: Interim Director
Date: 1/14/2014 12:40:20 PM
Name: AlonsoHailey
Title: Operations Analyst, Public Service Division
Date: 1/15/2014 9:22:43 AM
Name: RobinsonErica
Date: 1/15/2014 12:17:25 PM
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Name: TownsendAmanda
Title: Director - Domestic Animal Services,Domestic Anima
Date: 1/17/2014 3:10:15 PM
Name: BelpedioJennifer
Title: Assistant County Attorney,County Attorney
Date: 1/21/2014 8:36:19 AM
Name: CarnellSteve
Title: Administrator - Public Services
Date: 1/21/2014 4:07:54 PM
Name: KlatzkowJeff
Title: County Attorney
Date: 1/21/2014 4:26:33 PM
Name: FinnEd
Title: Senior Budget Analyst, OMB
Date: 1/21/2014 4:46:51 PM
Name: StanleyTherese
Title: Management/Budget Analyst, Senior,Office of Manage
Date: 1/21/2014 5:00:02 PM
Name: OchsLeo
Title: County Manager
Date: 1/21/2014 5:14:13 PM
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1/28/2014 16.D.9.
1/28/2014 16.D.9.
Collier County
Housing, Human and Veteran Services Department
STATE /FEDERAL
SUBORDINATIONPOLICY
Requests for subordination must be approved in advance by the Housing, Human and Veteran Services
Department ( "Department "). We may consider subordinating our loan/lien if the following factors are
present:
• The proposed transaction is a rate and term refinance (less than $500.00 to borrower at
closing); and
• The new interest rate is a least one percent less than the current interest rate; and
• The new principal and interest payment is lower than the current payment; or if the new
monthly payment is increased due to a reduction to the term of the loan, the Department will
determine if the new payment is reasonable and beneficial to the client; and
• The proposed transaction only includes the current first mortgage payoff and reasonable closing
costs; and
• Closing costs are reasonable as determined by the Department; and
• The proposed transaction does not include a prepayment penalty.
• Property being refinanced must be the borrower's principal residence.
The following documents must be submitted to our office in order to process a subordination request:
1. Subordination Request form (attached).
2. Signed and executed Good Faith Estimate and Truth in Lending statement; and
3. Signed and executed mortgage /loan application; and
4. Preliminary HUD -1 Settlement Statement; and
5. Copy of title commitment; and
6. Name, phone number and email address of closing agent /Title Company.
Please allow 10 business days for processing from the date the request is submitted to our office. If
approved, the Department will notify the lender and title company prepare the Subordination
Agreement. If we are unable to approve the request, a payoff letter will be issued.
Priscilla Doria
Grant Coordinator
Housing, Human & Veteran Services Department
3339 E. Tamiami Trail, Bldg H, Suite 211
Naples, Florida 34112
.-%, Phone: 239 - 252 -5312 E -fax: 239- 252 -6518 Email: PriscillaDoria @colliergov.net
Revised 01/2014
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1/28/2014 16.D.9.
Subordination Request Form
Complete the following form and fax to: (239) 252 -6518
Attn: Priscilla Doria
Borrower (s) name:
Borrower (s) address:
Name of Lender/Broker:
Address:
Email: Phone:
Current MorWaLye Information
Principal Balance: Interest Rate:
Monthly Payment: Loan Term:
New MortLyaze Information
Loan Amount: Interest Rate:
Monthly Payment: Loan Term:
Closin A ent /Title Company Information
Name: Contact Person:
Phone: Email Address:
I certify that the above information is correct. I certify that there will be no cash out to the borrower, and no
other unsecured debt will be paid off (i.e., credit cards, automobile loans, etc.). I understand that the
subordination document prepared by Collier County will be invalid if that is the case.
Lender /Broker Signature Date Lender/ Broker Name Printed
Revised 01/2014
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