Subordination Agreement SHOP Loan 2015-0374527Recording Requested By
Lawyers Title
Recording Requested by
And When Recorded Mail to:
Poway Housing Authority
13325 Civic Center Drive
Poway, CA 92064
Attn: City Clerk
DOC# 2015- 0374527
Jul 16, 2015 02:10 PM
OFFICIAL RECORDS
Emest J. Dronenburg, Jr.,
SAN DIEGO COUNTY RECORDER
FEES: $36.00
PAGES: 8
SUBORDINATION AGREEMENT
SHOP LOAN
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY
INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER
PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY
INSTRUMENT.
THIS AGREEMENT (the "Agreement "), is made as of July 1 O, 2015, by and among the
POWAY HOUSING AUTHORITY, a public body, corporate and politic, hereinafter referred
to as "Housing Authority ", AARON KAGCHELLAND, a single man, hereinafter referred to
as "Borrower" and MISSION FEDERAL CREDIT UNION, a California Corporation,
hereinafter described as the "Senior Lender ":
WITNESSETH
WHEREAS, in order to provide funds to the Borrower in connection with the purchase of
a home located at 12952 Metate Lane, Poway, California, which property is legally described in
Exhibit A attached hereto (the "Property"), the Poway Redevelopment Agency (the
"Redevelopment Agency ") made a loan to Borrower in the original principal amount of $25,492
(the "Subordinate Loan "), evidenced by a Promissory Note in favor of the Redevelopment
Agency dated March 4, 2010, (the "Note") and secured by a Deed of Trust and Security
Agreement in favor of the Redevelopment Agency (the "Subordinate Deed of Trust "), recorded
against the Property in the Official Records of San Diego County on March 4, 2010, as
Instrument No. 2010 - 0105840. In addition, in connection with the Subordinate Loan, an
Occupancy, Refinancing, and Resale Restriction Agreement with Option to Purchase (the
"Resale Restriction Agreement") was recorded against the Property in the Official Records of
San Diego County on March 4, 2010, as Instrument No. 2010- 0105838, and a Notice of
Affordability Restrictions on Transfer of Property (the "Notice of Restrictions ") was recorded
against the Property in the Official Records of San Diego County on March 4, 2010, as
Instrument No. 2010 - 0105841. The Subordinate Deed of Trust, the Resale Restriction
Agreement and the Notice of Restrictions, together with any and all amendments and
modifications thereto recorded in the Official Records of San Diego County in connection with
the Subordinate Loan, are hereinafter referred to as the "Subordinate Encumbrances." The
Subordinate Encumbrances, the Note, and all other documents evidencing or securing the
Subordinate Loan are collectively referred to as the "Subordinate Loan Documents."
Recording RegUested by
Lawyers Title
Recording Requested by
And When Recorded Mail to:
Poway Housing Authority
13325 Civic Center Drive
Poway, CA 92064
Attn: City Clerk
SUBORDINATION AGREEMENT
SHOP LOAN
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN YOUR SECURITY
INTEREST IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER
PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY
INSTRUMENT.
THIS AGREEMENT (the "Agreement'), is made as of July 0 , 2015, by and among the
POWAY HOUSING AUTHORITY, a public body, corporate and politic, hereinafter referred
to as "Housing Authority ", AARON KAGCHELLAND, a single man, hereinafter referred to
as "Borrower" and MISSION FEDERAL CREDIT UNION, a California Corporation,
hereinafter described as the "Senior Lender ":
WITNESSETH
WHEREAS, in order to provide funds to the Borrower in connection with the purchase of
a home located at 12952 Metate Lane, Poway, California, which property is legally described in
Exhibit A attached hereto (the "Property "), the Poway Redevelopment Agency (the
"Redevelopment Agency ") made a loan to Borrower in the original principal amount of $25,492
(the "Subordinate Loan "), evidenced by a Promissory Note in favor of the Redevelopment
Agency dated March 4, 2010, (the "Note ") and secured by a Deed of Trust and Security
Agreement in favor of the Redevelopment Agency (the "Subordinate Deed of Trust'), recorded
against the Property in the Official Records of San Diego County on March 4, 2010, as
Instrument No. 2010 - 0105840. In addition, in connection with the Subordinate Loan, an
Occupancy, Refinancing, and Resale Restriction Agreement with Option to Purchase (the
"Resale Restriction Agreement") was recorded against the Property in the Official Records of
San Diego County on March 4, 2010, as Instrument No. 2010 - 0105838, and a Notice of
Affordability Restrictions on Transfer of Property (the "Notice of Restrictions ") was recorded
against the Property in the Official Records of San Diego County on March 4, 2010, as
Instrument No. 2010 - 0105841. The Subordinate Deed of Trust, the Resale Restriction
Agreement and the Notice of Restrictions, together with any and all amendments and
modifications thereto recorded in the Official Records of San Diego County in connection with
the Subordinate Loan, are hereinafter referred to as the "Subordinate Encumbrances." The
Subordinate Encumbrances, the Note, and all other documents evidencing or securing the
Subordinate Loan are collectively referred to as the "Subordinate Loan Documents."
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WHEREAS, pursuant to a Cooperation Agreement and an Assignment and Assumption
Agreement, both dated March 11, 2011, the Redevelopment Agency has assigned to the Housing
Authority, and the Housing Authority has assumed, among other things, the rights of the
Redevelopment Agency under the Subordinate Loan Documents.
WHEREAS, pursuant to a Loan Agreement dated as of 2015, (the "Senior
Lender ") is making a loan to Borrower in the amount of $249,800 fthe "Senior Loan "). The
Senior Loan is secured by that certain Deed of Trust dated as of It , 2015, which will
be recorded in the Official Records of San Diego County concurrently herewith (the "Senior
Loan Deed of Trust'). The Senior Loan Deed of Trust and any other instruments or documents
which are recorded in connection with the Senior Loan shall be referred to collectively as the
"Senior Loan Encumbrances." The Senior Loan Encumbrances and any and all notes, loan
agreements, and other documents and instruments executed by Borrower in connection with the
Senior Loan shall be collectively referred to as the "Senior Loan Documents."
WHEREAS, it is a condition precedent to the Senior Lender providing the Senior Loan
that the Senior Encumbrances be unconditionally and at all times remain a lien or charge upon
the Property prior and superior to all the rights of the holder of the Subordinate Encumbrances
and that the Housing Authority specifically and unconditionally acknowledge that the
Subordinate Encumbrances are and shall remain subordinate to the lien or charge of the Senior
Encumbrances.
WHEREAS, it is to the benefit of all the parties herein that the Senior Loan be made to
the Borrower; and the Housing Authority is willing that the Senior Encumbrances shall, when
recorded, constitute a lien or charge upon the Property which is unconditionally prior and
superior to the lien or charge of the Subordinate Encumbrances.
NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties
hereto and other valuable consideration, the receipt and sufficiency of which consideration is
hereby acknowledged, and in order to induce the Senior Lender to provide the Senior Loan, it is
hereby declared, understood and agreed as follows:
(1) That Senior Encumbrances, and any renewals, modifications or extensions thereof, shall
unconditionally be and remain at all times a lien or charge on the Property described,
prior and superior to the lien or charge of the Subordinate Encumbrances;
(2) That the Senior Lender would not provide the Senior Loan without this Agreement; and,
(3) That with regard to the priority of the Subordinate Encumbrances, this Agreement shall
be the sole and only agreement with regard to the subordination of the lien or charge of
the Subordinate Encumbrances to the lien or charge of the Senior Encumbrances and
shall supersede and cancel any prior agreements as to such subordination including, but
not limited to, those provisions, if any, contained in the Subordinate Deed of Trust, which
provide for the subordination of the lien or charge thereof to another deed or deeds of
trust, another mortgage or mortgages, or any other property use restrictions or covenants.
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THE HOUSING AUTHORITY hereby declares, agrees and acknowledges that:
(a) It consents to all provisions of the Senior Documents and of any and all other agreements,
including but not limited to any escrow instructions or agreements, relating to the
disbursement of the proceeds of Senior Loan that have been submitted to Housing
Authority for its review (collectively, "Disbursement Provisions ");
(b) The Senior Lender, in approving any disbursements pursuant to any such Disbursement
Provisions, is under no obligation or duty to, nor has the Senior Lender represented that it
will, see to the application of such proceeds by the person or persons to whom the
proceeds are disbursed and any application or use of such proceeds for purposes other
than those provided for in the Senior Documents shall not defeat the subordination herein
made in whole or in part; and,
(c) It intentionally and unconditionally subordinates the lien or charge of the Subordinate
Encumbrances in favor of the lien or charge upon the Property of the Senior
Encumbrances and understands that in reliance upon, and in consideration of, this
subordination, specific loans and advances are being and will be made and, as part and
parcel thereof, specific monetary and other obligations are being entered into which
would not be made or entered into but for said reliance upon this subordination.
(d) Upon any event of foreclosure of the Subordinate Deed of Trust, whether by power of
sale or by court action, or upon a transfer of the Property in lieu of foreclosure, such
foreclosure shall not be deemed an event of default under any of the Senior Loan
Documents provided that the Housing Authority or any assignee of its rights or transferee
of the Property agrees to assume all of Borrower's obligations under the Senior Loan
Documents within ninety (90) days of such foreclosure and thereafter complies with all
terms of the Senior Loan Documents.
(e) Notwithstanding anything to the contrary contained in the Subordinate Loan Documents,
prior to the Housing Authority declaring any default or taking any remedy permitted
against the Borrower under the Subordinate Loan Documents or applicable law based
upon an alleged default under the Subordinate Loan Documents, the Housing Authority
shall give notice to the Senior Lender of such alleged default, and the Senior Lender shall
have a period of not less than ninety (90) days to cure such alleged default.
Notwithstanding the foregoing, other than the appointment of a receiver to collect monies
owing from the Borrower, the Housing Authority may take any reasonable action it
deems necessary or appropriate in good faith to protect its security. Notices of any
default by the Borrower under the Subordinate Loan Documents shall be given to the
Senior Lender at the following address:
Mission Federal Credit Union
5785 Oberlin Drive
San Diego, CA 92121
(f) Concurrently with a notice from the Senior Lender to the Borrower that a default or
breach exists under the terms of any of the Senior Documents, Senior Lender shall send a
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copy of such notice to the Housing Authority and the Housing Authority shall have thirty
(30) days to cure such default. The Senior Lender will not exercise any of its remedies
against Borrower or the Property during any applicable cure period set forth herein
beginning after the date such notice is given to Senior Lender, except that Senior Lender
may take any reasonable action it deems necessary or appropriate in good faith to protect
its security. Notwithstanding anything to the contrary in this Agreement, any
indebtedness and any other amounts secured by the Senior Encumbrances may be
accelerated and become immediately due and payable in accordance with the terms of the
Senior Lender Deed of Trust or any other Senior Documents and a notice of default may
be recorded in the applicable governmental office immediately upon the occurrence of a
default and expiration of any applicable notice and cure periods set forth in the Senior
Documents, provided, however, that if the underlying default giving rise to such
acceleration is a monetary default, the Housing Authority and Borrower shall be deemed
to have cured the default by tendering payment of all amounts then due as if no
acceleration of any indebtedness had occurred. Notices of any default by the Borrower
under the Senior Loan Documents shall be given to the Housing Authority at the
following address:
Poway Housing Authority
13325 Civic Center Drive
Poway, California 92064
Attention: Development Services, SHOP Program
(g) After a default under the Senior Documents, but prior to a foreclosure sale or deed in lieu
assignment of the Property, the Housing Authority shall have the right to purchase the
Property from the Borrower and pay all amounts due and owing under the Senior
Documents.
(h) The provisions of the foregoing paragraph are intended to supplement, and not to limit,
waive, modify or replace, those provisions of law pertaining to notice and cure rights of
Subordinate lenders including, without limitation, those set forth in California Civil Code
§§ 2924b and 2924c.
IN WITNESS WHEREOF, parties hereto have signed this Agreement as of the day and
year first above written.
POWAY HOUSING AUTHORITY:
By:
Daniel Singer, Executiv irector
MISSION FEDERAL CREDIT UNION:
0
Diana G. Clegg, Real Estate Operations
BORROWER:
M
Aaron Kagchelland
ALL SIGNATURES MUST BE NOTARIZED
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
On -J4J (1. JOl5' before me, C-Arrj ( S. L" ,j Notary Public, personally
appeared WPie( SIAg¢r who proved to
me on the basis of satisfactory evidence to be the person
,(s) whose name
(aj is /ace subscribed to
the within instrument and acknowledged to me that he /she /Sktey executed the same in
his /(1e6t.W authorized capacity(*s), and that by his /bKthKr signatureW on the instrument
the personX, or the entity upon behalf of which the personal acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
CAROL S. 210 �f
Commia # 21ltM 05118 Jd
Nobly PuWk • CNBornla
so Owllo County Notary Public
Comm ?s 2019
IN WITNESS WHEREOF, parties hereto have signed this Agreement as of the day and
year first above written.
POWAY HOUSING AUTHORITY:
M
Daniel Singer, Executive Director
MISSION FEDERAL CREDIT UNION:
LE
Diana G. Clegg, Real Estate Operations
BORROWER:
By:
Aaron Kagchelland
ALL SIGNATURES MUST BE NOTARIZED
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
On D-1elb'ZOl5 before me, AhyIIYv E oYloLe4- , Notary Public, personally
appeared k6YOVI .n&e W4AA , who proved to
me on the basis of satisfactory evidence to be the person(* whose name(?}is /are subscribed to
the within instrument and acknowledged to me that he /s*thyy executed the same in
his /hGf/thErf authorized capacity(iefi, and that by his /hf{r/thffr signature(4on the instrument
the person(; or the entity upon behalf of which the person(p} acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
COMM.AE 83110
COMM. #1983110 p
NOTARY PUBLIC - CALIFORNIAN
U� -Y SAN DIEGO COUNTY .n.
My Commission Expires
JUNE 21,2016
Notary Public
071z�
IN WITNESS WHEREOF, parties hereto have signed this Agreement as of the day and
year first above written.
POWAY HOUSING AUTHORITY:
It
1,1111 3 111UTA A til
By:
Daniel Singer, Executive Director Aaron Kagchelland
MISSION FEDERAL CREDIT UNION:
By: ' WA W&
Diana G. C4 gg, Real Est Operations
ALL SIGNATURES MUST BE NOTARIZED
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
On 71)`7e� o-k �. rµrce I I
'�II S before me, of Notary Public, personally
appeared �tcavvo- G - C tQ99 , who proved to
me on the basis of satisfactory evidence to be the person(A whose name(y) is /aFesubscribed to
the within instrument and acknowledged to me that he /she /they executed the same in
his /her /their authorized capacity0es), and that by his /her /their signature($) on the instrument
the person(A, or the entity upon behalf of which the person($) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
DEBORAH H A PURCELL
Commasslon 1 2077440
`z Notary Public • California
Z San Diego County
M Comm. Expires Au 12. 201 9
ENRON
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EXHIBIT A
LEGAL DESCRIPTION
APN 317 - 35047
That certain property situated in the State of California, County of San Diego, City of Poway,
described as follows:
LOT 8 OF CITY OF POWAY TRACT NO. 06 -06 THE MEADOWS, IN THE CITY OF
POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP
THEREOF NO. 15743 FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN
DIEGO COUNTY MARCH 5, 2009.
END OF LEGAL DESCRIPTION
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