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A Resolution Authorizing Subordination of a Lien for the Property Located at 1026 South Harvey Avenue (BPIP-056)
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Introduction
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The loan recipient at 1026 South Harvey Avenue is requesting a subordination of their Barrie Park Investment Program mortgage to a home equity line of credit. The Village remains secure in a junior position on the title.
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Recommended Action
Approve the resolution.
Prior Board Action
On September 6, 2005, the Village Board adopted a resolution awarding a loan in the amount of Fifteen Thousand Dollars ($15,000) to Joanne Corwin and Richard Corwin for the premise at 1026 South Harvey Avenue pursuant to the Barrie Park Investment Program.
Background
On September 6, 2005, the Board of Trustees approved a $15,000 loan to the owner of 1026 South Harvey Avenue. The loan was supported by a mortgage which was recorded against the property. The mortgage was recorded as a second mortgage on the property with the purchase mortgage being first.
Loans made under the Barrie Park program are deferred for repayment until the conveyance or transfer of any interest in the property. The guidelines were amended in September 2008 to clarify under what circumstances requests for subordination will be granted. The guidelines provide that in cases where former loan recipients wish to refinance mortgage(s), other than the Village's, and request that the Village maintain its subordinate position, the Village will agree to maintain its junior position if:
a. The terms of a new first mortgage are more advantageous to the homeowner and are reasonable under current market conditions; and
b. There is adequate equity in the property to support the total proposed encumbrance, at least 15% equity (if necessary, the homeowner(s) will submit an appraisal as proof of equity); and
c. The cost of the refinance is the only allowable equity taken out of the property.
In cases of extreme hardship, staff may recommend tha...
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