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HomeMy WebLinkAboutCOM 0585.000 2010-2012 William P.Kenoi :'�p�'� %F''''''''• Nancy E. Crawford Mayor - - I,\��Illiy Director • Deanna S. Sako • b-_ =e Deputy Director County of Hawaii Finance Department 25 Aupuni Street, Room 2103 • Hilo,Hawaii 96720 (808)961-8234 • Fax(808)961-8569 C7 February 16, 2012 -71 77.C: Council Chairman Dominic Yagong and Members of the Hawaii County Council County of Hawai'i Hilo, HI 96720 -9 17D Lri Dear Chairman Yagong and Council Members: In accordance with Section 21-39 (d) of the Hawaii County Code, this is to inform you that Bank of Hawaii, First Hawaiian Bank, and the North Hawaii Community Federal Credit Union have been approved to participate in the sewer connection loan program. These financial institutions have agreed to the terms and conditions of Article 5, Chapter 21 of the Code (as amended), and have been categorized as "designated banks" pursuant to this article. Attached are copies of the agreements that will be required to be signed by the designated banks and the borrowers under the sewer connection loan program. The note and mortgage forms that will be used by the designated banks are available for your review at the Treasurer's office. Questions regarding the upcoming implementation of the sewer connection loan program in Honoka'a may be directed to Treasurer Mike Okumoto at 933-6240. ktSincerely, 6414 iefr,,r Nancy E. Crawford Director of Finance Attachments ( 9 pp.) Comm. No. c O S Ref. To: PC— Ref. ©ate FFR 1 6 21119 Hawaii County is an Equal Opportunity Provider and Employer -*IV OF'4''• • ,____) %.,....,4_:;;;;;.e_......., .: COUNTY OF HAWAII Honoka`a Sewer Connection Guaranteed Loan Program Agreement with Designated Banks This agreement is made on between the County of Hawaii (the "County") and (the "designated bank") with its principal place of business at . This agreement applies only to sewer connection loans in the town of Honoka`a, Hawaii and originated between 2012 and 20_ if not mutually extended. 1. Recitals. The financial institutions serving Honoka`a town are desirous of providing loans to the residents and businesses seeking financing for the costs of sewer line connection. The County, to ensure that those qualifying owners who are required to hookup to the sewer line can do so without a financial impediment, will guarantee the repayment of loans for those owners whose loan applications have been declined. 2. Definitions. (a) "Designated bank" means a financial institution approved by the director of finance to provide loans to borrowers applying for sewer connection financing in Honoka`a town during 2012, and whose loans would be guaranteed by the County. (b) "Director" means the director of finance or the director's authorized representative. (c) "Guaranteed borrower" means an owner who has executed the appropriate agreements with the County required by Hawaii County Code (the "Code") Chapter 21, Article 5 and whose loan with a designated bank is guaranteed by the County in accordance with such Chapter and Article. (d) "Owner" means: (i) A person or persons, including joint tenants, tenants in common, tenants by the entirety; corporations; limited liability companies; non-profit organizations; and partnerships who hold the fee title to real property which is required to be connected to sewer lines pursuant to Section 21-5 of the Code; or (ii) A person or persons, including joint tenants, tenants in common, tenants by the entirety; corporations ; limited liability companies; non-profit organizations; and partnerships to whom has been entrusted pursuant to law the legal or equitable titles to real property which is required to be connected to sewer lines pursuant to Section 21-5 of the Code, and who are empowered to act as trustees of that real property for the benefit of another or others, or as trustees of a self-directed revocable living trust; or County of Hawaii is an Equal Opportunity Provider and Employer. Complaints of discrimination should be sent to: ■■cnn n;.e-r.,, nk..o.,r ri.,il O;nh*e 1n/aehi,,-v n nr nO (.Od1 n !lr raII(7071 77n-59Ad(Vnira and Ton) (iii) A person or persons or other legal entity who hold equitable title pursuant to an agreement of sale of real property which is required to be connected to sewer lines pursuant to Chapter 21, Article 5 of the Code; or (iv) A person or persons or other legal entity who hold, under a lease for a term of five years or more for residential or commercial purposes, real property which is required to be connected to sewer lines pursuant to Chapter 21 of the Code. (e) "Self-directed revocable living trust" means a trust formed for the purpose of management and administration of real property and in which the owner(s) of an interest in real property becomes settler(s) and trustee(s) of the trust by making said real property the trust res, and administering said property for the benefit of the owner(s). 3. Conditions and Terms for a Guaranteed Loan. (a) Any application or request by the owner for a guaranteed loan must be submitted to the designated bank no more than sixty calendar days after the date of notification by the director of environmental management requiring the owner to connect to the sewer. All such timely applications or requests for guaranteed loans shall be sent by any receiving designated bank to the director. Upon notification, the County will send the owner an Agreement with Guaranteed Borrower form to complete. (b) The owner seeking a guaranteed loan must receive two letters of declination from financial institutions in good standing with the State of Hawaii Department of Commerce and Consumer Affairs. At least one of the declinations must come from a designated bank. (c) The designated bank agrees to complete a Request for Loan Guarantee form and provide the County with the borrower's financial information including application, personal or business financial information, and credit report. By signing the Agreement with Guaranteed Borrowers form, the borrower consents to the release of this information to the County. (d) The designated bank agrees the loan to a guaranteed borrower will be at a rate of interest and terms offered at the inception of the program for that increment. (i) The interest rate will be no greater than . (ii) The term of the loan will be no greater than . (iii) The loan will be a non-revolving, fully amortizing credit facility. (iv) The guaranteed borrower has a right to prepay the loan at any time without penalty. (e) The County will guarantee an amount no greater than the contractor price. Furthermore, the loan guarantee will be limited to the assessed value of the parcel to be connected and any improvements at the time of the loan application; and also be restricted to hook up and the cost of reasonable restoration of the parcel and improvements to the condition existing at the time of the loan application plus loan fees and costs. Should the designated bank extend a loan greater than the guaranteed amount, the additional loan amount shall be evidenced and secured by a separate note and mortgage on a subordinated basis to the note and mortgage for the guaranteed loan. (f) The designated bank agrees to disburse the loan proceeds directly to the contractor performing the connection. (g) The designated bank agrees to provide information on the number of its guaranteed loans and the amount outstanding on a quarterly basis to the director. 4. Default; Guaranteed Payment; Assignment of Note and Mortgage. (a) In the event that a guaranteed borrower fails to pay the required payment on the loan within ninety days of the date upon which payment is due, the loan shall be considered in default. The designated bank shall immediately notify the director by sending in a Request for Guaranteed Payment and Assignment of Note and Mortgage form. The County may revoke its guarantee if the County is not notified within 30 days of default. (b) The designated bank will also assign the note and mortgage to the County. All assignments will be executed by employees previously authorized to sign this agreement with the County unless notified in writing of a change in authorized signer(s). (c) The guaranteed payment will include the outstanding principal and accrued interest without additional charges for late penalty. Payment will be made within 30 days of the receipt of required documents. Acceptance of this payment fully satisfies the guaranteed borrower's obligation to the designated bank. 5. Entire Agreement; Amendment. This agreement between the County and designated bank is intended to be a complete agreement of the terms, superseding all prior written and oral agreements. This agreement may be amended or modified only in writing by both parties. 6. Governing Law. This agreement shall be governed by the laws of the State of Hawaii. COUNTY OF HAWAII Name of Designated Bank By: By: Name: Name: Title: Title: r. •. .OF M..t......,-, COUNTY OF HAWAII Honoka`a Sewer Connection Guaranteed Loan Program Agreement with Guaranteed Borrower This agreement is made on between the County of Hawaii (the "County") and (the guaranteed borrower) whose property located at is required to be connected to the sewer line. 1. Recitals. The County, to ensure that those qualifying owners who are required to hookup to the sewer line can do so without a financial impediment, will guarantee the repayment of loans for those owners whose loan applications have been declined. 2. Definitions. (a) "Designated bank" means a financial institution approved by the director of finance to provide loans to borrowers applying for sewer connection financing in Honoka`a town during 2012, and whose loans would be guaranteed by the County. (b) "Director" means the director of finance or the director's authorized representative. (c) "Guaranteed borrower" means an owner whose loan with a designated bank is guaranteed by the County in accordance with Hawaii County Code (the "Code") Chapter 21, Article 5 and has executed the appropriate agreements with the County (d) "Guaranteed loan" means a loan executed by a guaranteed borrower from a designated bank in which the County guarantees the repaying of principal and interest to the designated bank. (d) "Owner" means: (i) A person or persons, including joint tenants, tenants in common, tenants by the entirety; corporations; limited liability companies; non-profit organizations; and partnerships who hold the fee title to real property which is required to be connected to sewer lines pursuant to Section 21-5 of the Code; or (ii) A person or persons, including joint tenants, tenants in common, tenants by the entirety, corporations; limited liability companies; non-profit organizations; and partnerships to whom has been entrusted pursuant to law the legal or equitable titles to real property which is required to be connected to sewer lines pursuant to Section 21-5 of the Code, and who are empowered to act as trustees of that real property for the benefit of another or others, or as trustees of a self-trusted revocable living trust; or County of Hawaii is an Equal Opportunity Provider and Employer. Complaints of discrimination should be sent to: USDA,Director,Office of Civil Rights,Washington,DC 20250-9410. Or call(202)720-5964(Voice and TDD). (iii) A person or persons or other legal entity who hold equitable title pursuant to an agreement of sale of real property which is required to be connected to sewer lines pursuant to this chapter; or (iv) A person or persons or other legal entity who hold, under a lease for a term of five years or more for residential or commercial purposes, real property which is required to be connected to sewer lines pursuant to Chapter 21 of the Code. (e) "Self-directed revocable living trust" means a trust formed for the purpose of management and administration of real property and in which the owner(s) of an interest in real property becomes settler(s) and trustee(s) of the trust by making said real property the trust res, and administering said property for the benefit of the owner(s). 3. Conditions and Terms for a Guaranteed Loan. (a) Any application or request for a guaranteed loan must be submitted to a designated bank no more than sixty calendar days after the date of notification by the director of environmental management requiring the owner to connect to the sewer. All such timely applications or request for guaranteed loans shall be sent by any receiving designated bank to the director. (b) The owner seeking a guaranteed loan must receive two letters of declination from financial institutions in good standing with the State of Hawaii Department of Commerce and Consumer Affairs. At least one of the declinations must come from a designated bank. (c) The owner agrees to permit the release of all financial information submitted to the financial institution or acquired by the financial institution in order for the County to render a decision to guarantee the owner's loan. The owner agrees to provide additional financial information should it be requested in the future. (d) The County will guarantee an amount no greater than the contractor price. Furthermore, the loan guarantee will be limited to the assessed value of the parcel to be connected and any improvements at the time of the loan application; and also be restricted to hook up and the cost of reasonable restoration of the parcel and improvements to the condition existing at the time of the loan application plus loan fees and costs. Should the designated bank extend a loan greater than the guaranteed amount, the additional amount shall be evidenced and secured by a separate note and mortgage that is subordinated to the note and mortgage of the guaranteed loan. (e) The guaranteed borrower is responsible for all closing costs. (f) The loan proceeds will be directly disbursed to the contractor performing the connection. (g) Should the note and mortgage be assigned to the County, the guaranteed borrower agrees to abide by all terms and conditions including maintaining hazard insurance on the property. 4. Default; Assignment of Note and Mortgage; Foreclosure (a) In the event that a guaranteed borrower fails to pay the required payment on the loan within ninety days of the date upon which payment is due, the loan shall be considered in default. (b) Upon assignment of the note and mortgage to the County, the guaranteed borrower may request a modification of the rate and terms of the note. If the guaranteed borrower and the County cannot agree on new rates and terms, the County shall proceed with foreclosure. (c) The note may be modified no more than two times. After the second note modification, the County shall foreclose on the property, or if additional collateral has been secured, take possession and liquidate chattel should the loan become 90 days delinquent. 5. Entire Agreement; Amendment. This agreement between the County and guaranteed borrower is intended to be a complete agreement of the terms, superseding all prior written and oral agreements. This agreement may be amended or modified only in writing by both parties. 6. Governing Law. This agreement shall be governed by the laws of the State of Hawaii. COUNTY OF HAWAII By: By: Name: Owner: Title: COUNTY OF HAWAII Honoka'a Sewer Connection Guaranteed Loan Program Request for Loan Guarantee is a designated bank under the Honoka'a Sewer Connection Loan Program as evidenced by the Agreement with Designated Banks ("Agreement") dated . Under the terms and conditions of the Agreement, we are requesting a loan guarantee for: Borrower: Loan Amount: Property Address: TMK: Enclosed are copies of information or forms that were used to used to process the borrower's loan request. Loan application Credit Report Verification of Income (Income Tax Returns, Pay Statements) Personal/Business Financial Statements Construction Contract Copy of Note and Mortgage Other Reason(s) for our loan declination: Name of Designated Bank By: Printed Name: Title: Your request for a County of Hawaii guarantee is approved/denied. Date: Nancy E. Crawford Director of Finance County of Hawai'i is an Equal Opportunity Provider and Employer. Complaints of discrimination should be sent to USDA,Director,Office of Civil Rights,Washington,DC 20250-9410. Or call(202)720-5964(Voice and TDD). FOR COUNTY USE ONLY The loan guarantee is granted/not granted. Reason: Guarantee Review Committee: Chairperson Date: Member Member '`v .INS'•/7 . COUNTY OF HAWAII Honoka'a Sewer Connection Guaranteed Loan Program Request for Payment of Guaranteed Loan and Assignment of Note and Mortgage is a designated bank under the Honoka'a Sewer Connection Loan Program as evidenced by the Agreement with Designated Banks ("Agreement") dated . Under the terms and conditions of the Agreement, we certify that the loan is in default and request a payoff of the following loan. Guaranteed Borrower: Property Address: TMK: Loan Balance: Accrued interest through : $ In consideration of the sum of Dollars ($ ), the designated bank hereby releases any claims on the guaranteed borrower under this loan, and assigns and transfers that certain Note and Mortgage dated for the original sum of Dollars ($ ) and which Mortgage is recorded on the public records in the State of Hawaii on Document No. to the County of Hawai'i with all its rights, title, and interest. The designated bank hereby warrants and represents that it is the present holder of the above described Mortgage and that there are no other holders of said Mortgage or any interest therein. Name of Designated Bank By: Printed Name: Title: County of Hawaii is an Equal Opportunity Provider and Employer. Complaints of discrimination should be sent to: USDA,Director,Office of Civil Rights,Washington,DC 20250-9410. Or call(202)720-5964(Voice and TDD).