Loading...
Deed of Trust 2005-07167020 Recording requested by - DOC ,w 2005 - 0 ?02 11111111111111111111111 II11111111111111111111111111111111111 AUG 19, 2005 4:16 PM OFFICIAL RECORDS '_Ad! DIEGO crJUN FIECORUEFI OFFICE l,FlEGORI'd. M11 R, COUNTY RECORDER FEE= 1100 DA 2005- 07 16702 NOTICE: THIS DEED OF TRUST SECURES A SHARED EQUITY LOAN. THE LOAN SECURED BY THIS DEED OF TRUST MAY REQUIRE PAYMENT OF PRINCIPAL, INTEREST AND A PORTION OF THE EQUITY UPON THE SALE OR TRANSFER OF THE PROPERTY OR UPON A PREPAYMENT. This Deed of Trust is second and subject to that certain DEED OF TRUST Deed of trust recording concurrently herewith (80% AM I) THIS DEED OF TRUST ("Lender Deed of TrUSt ") is made this) day of A a `) Sr 2005. among the trustor. Jason Richards ( "Borrower'), the trustee, Chicago Title Company, a California corporation ("Trustee "). and the Beneficiary, the City of Poway ("Lender"). whose address is 13325 Civic Center Drive, Poway. California 92064, Attention: Housing Program Manager. BORROWER HEREBY irrevocably grants, transfers, and assigns to Trustee, in trust, with power of sale. all that property (the "Property ") in the City of Poway, County of San Diego. State of California. described as: (See Legal Description - Exhibit "A ") which has the address of 14250 Mariana Drive. Poway, California 92064 (herein "Property Address"); TOGETHER with all the improvements now and hereafter erected on the Property, and all easements, rights, appurtenances and rents (subject, however, to the rights and authorities given herein to Lender to collect and apply such rents), all of which shall be deemed to be and remain part of the property covered by this Lender Deed of Trust; and all of the foregoing, together with said property, are hereinafter referred to as the "Property rn� or vo.,e���uuv�xivou.��e m m�,� CHICAGO TIl'LE COMPANY NO CHARGE ON THIS DOCUMENT FOR THE BENEFIT OF TI IE CITY OF POWAY 21 60 6 Recording Requested By I And When Recorded Mail To: fl - IE CITY OF POWAY I� 13325 Civic Center Drive Poway, CA 92064 ATTN: Housing Program Manager V rnl.. I Ina -) _1 r - DOC ,w 2005 - 0 ?02 11111111111111111111111 II11111111111111111111111111111111111 AUG 19, 2005 4:16 PM OFFICIAL RECORDS '_Ad! DIEGO crJUN FIECORUEFI OFFICE l,FlEGORI'd. M11 R, COUNTY RECORDER FEE= 1100 DA 2005- 07 16702 NOTICE: THIS DEED OF TRUST SECURES A SHARED EQUITY LOAN. THE LOAN SECURED BY THIS DEED OF TRUST MAY REQUIRE PAYMENT OF PRINCIPAL, INTEREST AND A PORTION OF THE EQUITY UPON THE SALE OR TRANSFER OF THE PROPERTY OR UPON A PREPAYMENT. This Deed of Trust is second and subject to that certain DEED OF TRUST Deed of trust recording concurrently herewith (80% AM I) THIS DEED OF TRUST ("Lender Deed of TrUSt ") is made this) day of A a `) Sr 2005. among the trustor. Jason Richards ( "Borrower'), the trustee, Chicago Title Company, a California corporation ("Trustee "). and the Beneficiary, the City of Poway ("Lender"). whose address is 13325 Civic Center Drive, Poway. California 92064, Attention: Housing Program Manager. BORROWER HEREBY irrevocably grants, transfers, and assigns to Trustee, in trust, with power of sale. all that property (the "Property ") in the City of Poway, County of San Diego. State of California. described as: (See Legal Description - Exhibit "A ") which has the address of 14250 Mariana Drive. Poway, California 92064 (herein "Property Address"); TOGETHER with all the improvements now and hereafter erected on the Property, and all easements, rights, appurtenances and rents (subject, however, to the rights and authorities given herein to Lender to collect and apply such rents), all of which shall be deemed to be and remain part of the property covered by this Lender Deed of Trust; and all of the foregoing, together with said property, are hereinafter referred to as the "Property rn� or vo.,e���uuv�xivou.��e m m�,� 21607 'fO SECURE to Lender the repayment of the indebtedness evidenced by Borrower's shared equity promissory note dated _Atl 11 , 2005, and extensions and renewals thereof in the principal sum of Two -) Hundred and Twenty Thousand and no /100 U.S. Dollars ($220.000.00) ( "Note "). including without limitation the Equity sharing provisions thereof (the term "Equity" shall have the meaning ascribed to it in the Note Rider attached to the Note); the performance of each agreement and covenant of Borrower under that certain Affordable Housing Resale Restrictions: Option Agreement and Option to Designate Purchaser( "Resale Restriction ") of even date herewith and recorded concurrently herewith affecting the Property; the payment of all other sums, with interest thereon, advanced in accordance herewith to protect the security ofthis Lender Deed of Trust; and the performance of the covenants and agreements of Borrower contained herein. THIS DIED Oh TRUST is subordinate to the First Note and First Lender Deed of "Crust, as such terms are defined in the Note. BORROWER covenants that Borrower is lawhdly seized ofthe estate hereby conveyed and has the right to grant and convey the Property. and that Borrower is unencumbered except for encumbran- ces of record. Borrower covenants that Borrower warrants, and will defend generally, the title to the Property against all claims and demands, subject to encumbrances of record. UNIFORM COVENANTS Borrower and Lender covenant and agree as follows: I . Payment of Principal and Interest Borrower shall promptly pay when due the principal and interest, if any, evidenced by the Note. 2. Funds for Taxes and Insurance To protect the security of the Lender Deed of Trust. Borrower agrees to pay, at least ten (10) days before delinquency. all taxes and assessments affecting the Property. including assessments on appurtenant water stock, all encumbrances, charges and liens, with interest, on the Property or any part thereof, which appear to be prior or superior hereto, and all costs, fees and expenses of this Lender Deed of Trust. Should Borrower tail to make any payment or fail to do any act as herein provided, then Lender or Trustee, without obligation to do so and without notice to or demand upon Borrower and without releasing Borrower from any obligation hereof. may make or do the same in such manner and to such extent as cither may deem necessary to protect the security hereof. Lcnder or Trustee being authorized to enter upon the Property for such purposes: appear in and defend any action or proceeding purporting to allect the security hereof or the rights or powers of Lender or Trustee; pav, purchase, contest or compromise any encumbrance, charge or lien which in the judgment of either Lender or Trustee appears to be prior or superior hereto: and, in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. 3. Application of Payments Unless applicable law provides otherwise, all payments received by Lender under the Note shall be applied by Lender first in payment of amounts due to Lender by Borrower, then to interest payable on the Note. and then to the principal of the Note. ru, .,r r,l,,;nlsi ,r I"." U 0 21608 a. Prior Mortgages and Deeds of Trust: Charges, Liens Borrower shall perform all of Borrower's obligations under am mortgage, deed of trust or other security agreement with alien which has priority over this Lender Deed of '['rust, including Borrower's covenants to make payments when due. Borrower shall pay or cause to be paid all taxes, assessments and other charges, tines and impositions attributable to the Property which may attain a priority over this Lender Deed of Trust, and leasehold payments, if any. �. Hazard Insurance Borrower shall keep the improventent(s) now existing or hereinafter erected on the Property insured against loss by fire, hazards included within the terms "extended coverage," and such other hazards as Lender may require and in such amounts and for such periods as Lender may require. The insurance carrier providing the insurance shall be chosen by Borrower subject to approval by Lender. provided that such approval will not be unreasonably withheld. All insurance policies and renewals thereof shall be in a form acceptable to Lender and shall include a standard mortgagee clause in favor of and in a forni acceptable to Lender. Lender has the right to hold the policies and renewals thereof; subject to the terns of any mortgage. deed of trust or other security agreement with a lien which has priority over this Lender Deed of Trust. In the event of loss. Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower. If Property is abandoned by Borrower, or if Borrower fails to respond to Lender within thirty ( 30) days from the date notice is mailed by Lender to Borrower that the insurance carrier offers to settle a claim for insurance benefits. Lender is authorized to collect and apply the insurance proceeds at Lender's option either to restoration or repair of the Property or to the sums secured by this Lender Deed otTrust. 6. Preservation and Maintenance of Propertv Borrower will keep the Property in good repair and in compliance with the standards promulgated from time to time by the Lender, and shall not commit waste or permit impairment or deterioration ofthe Property and shall comply with the provisions of any lease if this Lender Deed of Trust is on a leasehold. If this Lender Deed of Trust is on a unit in a condominium or planned unit development, Borrower shall perform all of Borrower's obligations under the declaration of cotenants, conditions and restrictions creating or governing the condominium or planned unit development, the bylaws and regulations of the condominium or planned unit devel- opment, and constituent documents. 7. Protection of Lender Security If Borrower fails to perform the covenants and agreements contained in this Lender Deed of Trust. or if any action or proceeding is commenced which materially affects Lenders interest in the Property, then Lender. at Lender's option, upon notice to Borrower, may make such appearances, disburse such sums including reasonable attorneys' fees, and take such action as is necessary to protect Lenders interest. If Lender's required mortgage insurance is a condition of making the loan secured by this Lender Decd of ` frust. Borrower shall pay the premiums required to maintain such insurance in effect until such time as the requirement for such insurance terminates in accordance with Borrower's and Lender's written agreement or applicable law. 3 r u ! `1609 Any amounts disbursed by Lender pursuant to this paragraph, with interest thereon, at the Note rate. will become additional indebtedness of Borrower secured by this Lender Deed of Trust. Unless Borrower and Lender agree to other terms of payment, such amounts will be payable upon notice from Lender to Borrower requesting payment thereof. Nothing contained in this paragraph will require Lender to incur anv expense or take any action hereunder. R. Inspection Lender may make or cause to he made reasonable entries upon and inspections of the Property. provided that Lender will give Borrower notice prior to any such inspection, specifying reasonable cause therefor related to Lender`s interest in the Property. 9. Condemnation The proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of the Property. or pail thereof. or for conveyance in lieu of condemnation, are hereby assigned and shall be paid to Lender subject to the terms of any mortgage, deed of trust or other security agreement with a lien which has priority over this Lender Deed of Trust. 10. Borrower Not Released; Forbearance by Lender Not a Waiver Extension of the time for payment or modification of amortization of the sums secured by this Lender Deed of Trust granted by Lender to any successor in interest of Borrower shall not operate to release, in any manner, the liability of the original Borrower and Borrower's successors in interest. Lender shall not be required to commence proceedings against such successor or refiise to extend time for payment or otherwise modify amortization of the sums secured by this Lender Deed of Trust by reason ofany demand made by the original Borrower and Borrower's successors in interest. Any forbearance by Lender in exercising any right or remedy hereunder, or otherwise aff orded by applicable law, shall not be a waiver of or preclude the exercise of any such right or reined\. 11. Successors and Assiy,ns Bound..loint and Several Liability The covenants and agreements contained herein shall bind, and the rights hereunder shall inure to. the respective successors and assigns of Lender and Borrower. sul?ject to the provisions of paragraph 15 hereof. All covenants and agreements of Borrower shall be joint and several. 12. Notice Except for any notice required under applicable law to be given in another manner: (a) any notice to Borrower provided for in this Lender Deed of Trust shall be given by delivering it or by mailing such notice by certified mail, addressed to Borrower at the Property Address or such other address as Borrower may designate by notice to Lender as provided herein; and (b) any notice to Lender will be given by certified mail. return receipt requested. to Lender's address stated herein or to such other address as Lender may designate by notice to Borrower as provided herein. Any Notice provided for in this Lender Deed of Trust shall be deemed to have been given to Borrower or Lender when given in the manner designated herein. rm nl Poo 1,11111 '1' 11"Alled Ill I ni 1 ® 0 21610 1 Goyerttin�4 Law, Severability The state and local laws applicable to this Lender Deed of Trust shall be the laws of the jurisdiction in which the Property is located. The foregoing sentence shall not limit the applicability of federal law to this Lender Deed of Trust. In the event that any provision or clause of this Lender Deed otTrust or the Note conflicts with applicable law. such conflict shall not affect other provisions of this Lender Deed of Trust or the Note which can be given effect without the conflicting provision and. to this end, the provisions of this Lender Deed of Trust and the Note are declared to be severable. As used herein, -- costs." "expenses' and "attorneys" fees" include all sums to the extent not prohibited by applicable law or limited herein. 14. Borrower's Copy Borrower shall be furnished a conformed copy of the Note and this Lender Decd of Trust at the tinx of eNecution or after recordation hereof. 15. Sale and Affordable Term Defined (a) Definition of Sale The following shall all be considered transfers or sales of the Property and shall be referred to herein generally as a "Sale ": (i) all or any part of the Property or any interest in the Property is sold, conveyed or transferred, (ii) if Borrower is not a natural person and a heneficial interest in Borrower is sold, conveyed or transferred, (iii) all or any part of the Property is refinanced, except as provided in (b) below. (iv) Borrower does not occupy the Property as his, her, or their. primary residence. (v) any material breach of the Note, the Note Rider, the Resale Restriction or this Lender Deed of Trust, (vi) filing bankruptcy, or (vii) transfer to one spouse alter a divorce. The term "Sell." may be used herein in place of the term "Sale," where appropriate and as used herein shall mean a Sale. (b) [Exclusions from Definition of Sale Notwithstanding the foregoing. a refinancing of the Property shall not be considered a Sale, provided either: ( I ) The principal balance of Borrower 's loan after the refinancing, does not exceed the principal balance ofthe Borrower's loan before the refinancing plus reasonable closing costs: or (3) Both of the following conditions are met, and provided that the City provides ads ante written consent to the Owner of the refinancing: (i) the Borrower receives cash from such refinancing. which does not exceed ten percent (10 %) of the principal balance of Borrower's loan before the refinancing: and (ii) such cash is borrowed f the purpose of and is used for improvements to the Property which improvements are preapproved by the Lender prior to Borrower's obtaining the refinancing. (c) Definition of Affordable Tcrm The "Affordable Term " shall be the period of forty - five (45) years measured from the (late each Borrower obtains ownership or any interest in the Property (thc "Affordable Terni' ). and provided that such ownership or any interest in the Property is ttanslerred prior to expiration of the Affordable Term. then the Affordable Term shall begin anew from the date each subsequent Borrower obtains ownership or any interest in the Property and shall run for forty -five (45) years beg inning on such date. During the Affordable perm any transfer of the Property shah l be subject to the provisions of the Resale Restriction. Any subsequent transfer by the 5 0 • 21611 Borrower to a subsequent Borrower shall also be subject to the provisions of this Resale Restriction until the end ofthe subsequent Borrower's Affordable Term. The parties intend to restrict the sale and occupancy of the Property for the "longest feasible time." as defined in California Health & Safety Code §§')')')')4. i and 1 1413. which sections define the "longest feasible time" to include "unlimited duration." 16. Determination of NIQxImUm Restricted Resale Price (a) Calculation of Maximum Restricted Resale Price Except as otherwise provided herein, the amount of money and /or other consideration that any Borrower may receive for any Sale of the Property shall be called the "Maximum Restricted Resale Price." The Maximum Restricted Resale Price shall be the lesser of: (i) the Fair Market Value, as defined in Section 16(f), below; and (ii) the purchase price which would result in a Monthly Housing Cost, as determined by [lie Lender, which does not exceed the sum of: (A) the product of one twelfth (1 /12) of thirty -five percent (35 %) times eighty percent (30%) of median income for the San Diego metropolitan area, as adjusted for household size appropriate to the unit, plus (B) the three percent (3 %) downpayment. Notwithstanding the foregoing or anything contained herein to the contrary, under no circumstances shall the Maxinrtutt Restricted Resale Price he less than the sum of the current balance of the First Lien ( "First Lien " means the lien of the institution making the purchase money loan to a Borrower for the purchase of the Property and/or any acceptable refinancings), plus the Borrower's share of escrow. title and other closing costs as set forth herein. (b) Insurance Coverage Insurance premiums shall be the average of three quotes obtained by the Lender for the coverage required for the First Lender Deed of Trust. The deductible for the insurance shall not exceed the sum of Fiee Hundred Dollars ($500.00) per occurrence. (c) N- lonthlV Housin< Cost As used herein "Monthly Housing Cost' means all of the following associated with the Property. estimated or known as ofthe date ofthe proposed Sale ofthe Property: (i) principal and interest payments on a thirty -year, fixed -rate mortgage loan at the then currently prevailing market rate of interest. and any loan insurance fees associated therewith (except for a rel inancing with cash out. ifallowed under Section 3(c)(2), above, under no circumstances shall Borrower or any purchaser obtain a mortgage loan that contains an adjustable interest rate): (ii) property taxes, assessments, including Mello Roos tees. if applicable: (iii) fire and casualty insurance covering replacement value of property improvements (to the extent not covered by the homeowner association encompassing the Property): (ic) any homeowner association lees; (v) private mortgage insurance. if applicable: and (vi) reasonable costs of utilities. Monthly Housing Cost of the Borrower shall be an average of estimated costs for the next twelve (12) month period as of the date ofthe Notice of Intent to Transfer. (d) Capital Improvements The Maximum Restricted Resale Price shall be increased by sum equal to any capital improvements to the Property. valued at their original cost plus interest at the legal rate on such improvements to the date of resale, approved by the Lender in writing, prior to their installation, during the tern ofthe Borro\vcr "s ownership and reasonable closing costs and marketing expenses. 6 0 9 2 1612 (e) Maximum Restricted Resale Price Calculation Requests At anytime during the term of the Note, an Borrower may obtain a written calculation showing the amount of the Maximum Restricted Resale Price for the Property and its method of calculation from the Lender, by requesting the sane in meriting, provided that such calculation may not be obtained more frequently than once per catendar year during the term of the Note. (0 Determination of Fair Market Value if it is necessary to determine the Fair Market Value of the Property, it shall be determined by a certified MAI or other qualified real estate appraiser approved in advance by the Lender. if possible, the appraisal shall be based upon the sales prices of comparable properties sold in the market area during the preceding three (3) month period. 'The cost of the appraisal shall be paid by the Borrower, unless the appraisal is obtained from a new purchaser. Nothing in this section shall preclude the Borrower and the Lender from establishing the Fair Market Value of the Property by mutual agreement in lieu of an appraisal pursuant to this section. 17. Notice of Intention to Sell the Property (a) Promptly notify the Lender in writing of such intent ( "Notice of Intent to Transfer') prior to notil \Ving the public of such intent, including, without limitation. prior to notifying real estate brokers or lenders of Borrower's intent to Transfer the Property and prior to listing the Property on the (Multiple Listing Service (hereinafter referred to as the "Notice of Intent to Transfer, ") by certified mail return receipt requested. to the City of Poway. 13325 Civic Center Drive Poway, CA 9206.1. Attention: I lousing Program Manager, or such other address as the Lender may hereafter designate, in writing. The Purchaser has the right to withdraw the Notice of Intent to Transfer prior to the opening 01'csero\e to purchase the property (b) Within fifteen (15) days ol'del ivery of the Notice of Intent to Transfer, the Borrower shall obtain and deliver to the Lender a current written report of inspection of the Property by a licensed structural pest control operator; (c) Prior to the close of escrow on the Transfer. the Borrower shall repair all damage noted in the pest report including damage caused by infestation or infection by wood- destroying pests; (d 1 Within 1 - 1 fteen ( 15) days ofdelivery of the Notice of Intent to Transfer. the Borrower shall allow the Lender to inspect the Property to determine whether any violations of applicable building, plunnbing, electric. fire, housing or other applicable codes exist and whether the Property has been maintained in good condition, upon reasonable written notice of not less than ten (10) days. Lender shall notil} Borrower with regard to any noted code violations and maintenance deficiencies (collectively, the .- Deficiencies"). and Borrower shall cure the Deficiencies in a reasonable manner acceptable to the Lender within sixty (60) days of being notified in writing of the result of the inspections: (e) If the Property is vacant. the Borrower shall maintain utility connections until the close of escrow on the transfer: and 7 21613 (1) In the event of a purchase of the Property by the Lender, the Borrower shall permit a final walk - through of the Property by the Lender. 13. Lender's Election to Exercise Option or Require Sale to an Eligible Purchaser Within forty - ti%e (4i) days after receipt by the Lender of the Notice of Intent to Transfer and before Borrower has opened escro\\ with another buyer. provided that Lender shaII have a minimum of thirty (30) days from the date the Lender receives the Notice of Intent to "Transfer, the Lender shall in its sole discretion notify the Borrower of one of the following: (a) notify the Borrower regarding whether or not the Lender intends to exercise its Option to purchase the Properly. as provided in Section 19. below: (b) notify the Borrower that the Borower map only Sell the Property to an Eligible Purchaser. as defined hcreinbelow, for the Maximum Restricted Resale Price, as provided in Section 20. below. in which event. such Eligible Purchaser shall assume all of the obligations of Borrower under the Note, the Resale Restriction and the Deed of TrusC or (c) notify the Borrower that the Borrower may only Sell the Property to an Eligible Purchaser designated by the Lender lot the Maxinuun Restricted Resale Price. as provided in Section 21, below, in which event, such Eligible Purchaser shall assume all of the obligations of Borrower under the Notc. the Resale Restriction and the Deed of Trust. 19. Lender's Option to Purchase the Property The Borrower hereby grants an option (the "Option ") to the Lender to purchase the Property on the following terms and conditions: (a) G'antoi'Option Borrowerhereby - rants to Lender the Option to purchase the Property on the terms and conditions set forth herein. The purchase price payable by the Lender to the Borrower for the Property (the "Option Pricc ') shal I be the greater of the Maximum Restricted Resale Price. as defined in Section 16 hereol', or (ii) the sum of the then current balance of the First Lender Deed of Trust, plus the Borrower's share of escrow. title and other closing costs. The Option created hereby shall be irrevocable by Borrower and shall be binding upon the successors and assigns of Borrower. The Lender shall have the right of specific performance to enforce the terms of this Option. (b) 'Tenn and Consideration for Option The term of the Option shall commence on the date that title to the property is recorded in the name of Borrower, and shall expire forty -five (45) years thereafter. Notwithstanding the foregoing, if ownership or any interest in the Properly is transferred prior to expiration of such forty -five (45) year period, then the tent ofthe Option shall commence on the date that title to the Propert is recorded in the name of a subsequent Borrower, and shall expire forty -live W) years thereafter. (c) Exercise of Option The Option may he exercised by (i) the Lender's delivery to Borrower ol'written notice of such exercise (the "Exercise Notice'), at any time after receipt by the Lender of the Notice of Intent to'Transfer and before Borrower has opened escrow with another buyer. provided that Lender shall have a minimum of thirty (30) days to exercise the Option; or (ii) in the event of am clef ault under the Note. the Lender Deed of "Trust or the Resale Restriction. In the event t", III l'. nt v b T01"", P —I IV.: 0 0 21614 that the Lender exercises the Option as the result of an event of any default under the Note, the Lender Deed of Trust or the Resale Restriction, but the Borrower cures the default prior to the sale of the Propertv to the Lender, the Lender's exercise of the Option shall be deemed revoked. The revocation of the exercise of the Option shall not terminate the Note or preclude the Lender from subsequently exercising the Option upon a later event of default. (d) Escrow and Completion of Sale Within five (5) days after Lender has exercised the Option, or as soon thereafter as reasonably practicable, an escrow shall be opened with Chicago Title Escrow or such other escrow company as determined by to Lender for the conveyance of the Property to the Lender. The Lender shall deposit the Option Price in escrow not later than one (1) business day prior to the anticipated close of escrow date. The Lender's obligation to close escrow shall be subject to the Lender's approval of a then current preliminary title report and, at Lender's option, environmental and other site testing. Any exceptions shown on such preliminary title report created on or after the Borrower's acquisition of the Property shall be removed by Borrower at its sole expense prior to the close of escrow. unless such exception(s) is(are) accepted by Lender in its reasonable discretion: provided, however, that Lender shall accept the following exceptions to title: (i) current taxes not yet delinquent, (ii) matters affecting title existing on the date of Borrower's acquisition of the Property, (iii 1 liens and encumbrances in favor of the Lender, (iv) the First Lender Deed of Trust, (v) the Note, and (vi) matters shown as printed exceptions in Borrower's standard form CLTA owner's policy of title insurance. The parties shall each be responsible f'or one -half of the escrow fees. documentary transfer taxes, recording fees and any other costs and expenses of the escrow, and the Borrower shall be responsible for the cost of a CLTA owner's policy of title insurance. Lender shall have thirtv (30) days after exercise of the Option to enter upon the Property to conduct any tests. inspections, investigations, or studies of the condition of the Property. Borrower shall permit the Lender access to the Property for such put Escrow shall close proucptly after acceptance by Lender of the condition of title and the physical and environmental condition of the Property, and in no event later than ninety (90) days after the date that the Lender has exercised the Option. Until such closing, the terms of the Note and the documents executed and recorded pursuant hereto shall remain in full force and effect. 20. Sale of the Propertv to an Eligible Purchaser at or Belowthe Maximum Restricted Resale Price Upon receipt of the Notice of Intent to Transfer, the Lender shall have the right, but not the duty, to require that the Borrower may only sell the Property to an Eligible Purchaser in the manner set forth in this Section 20. At any time after receipt by the Lender of the Notice of Intent to Transfer and before Borrower has opened escrow with another buyer, provided that Lender shall have a minimum of thirty (30) days from the date the Lender receives the Notice of Intent to Transfer, the Lender shall notify the Borrower regarding whether or not the Lender intends to require the Borrower to sell the Property to an Eligible Purchaser. Except as otherwise provided in this Lender Deed of Trust, if a Sale of the Property occurs during any Affordable Term, then said Sale shall be subject to the following: (a) The Property may only be sold, transferred or conveyed to a subsequent purchaser (i) whose income is less than eighty percent (80 %) ofthe median income for the San Diego metropolitan area. as adjusted for fancily size and as verified and approved by Lender, and (ii) who does not hold, directly or indirectly, "net family assets ", as defined below, whose aggregate value does not exceed those limits allowed in 25 California Code of Regulations Section 6914. 9 Ow N P.1a161I0P W, Dlld N I",( 0 0 21615 (b) The Property must be used only as the principal residence of the subsequent purchaser during the time of ownership. (c) 'The sale price to the subsequent purchaser must be at or below the Maxhnum Restricted Resale Price. (d) The subsequent purchaser must be (i) a first -time homebuyer; that is, he or she has not owned a home within the three -year (3 -year) period immediately preceding the date of the purchase of the Property; or (ii) a displaced homemaker. "Displaced homemaker" shall have the meaning ascribed to it in the Family Code of the State of California, as amended from time to time. (e) The Resale Restriction shall remain in effect for forty -five (45) years from the date title records in the name of the new Borrower, and provided that such ownership or any interest in the Property is transferred prior to expiration of the Affordable Tema, then the Affordable Term shall begin anew from the date title records in the name of each subsequent Borrower and shall remain in effect for forty -five (45) years beginning on such date. (f) The purchaser of the Property assumes all of the obligations of Borrower under the Note, the Resale Restriction and the Deed of Trust. In which event, the term of the Note will start over and will run for 45 years Prom the date title records in the name of the new Borrower. (g) Provided Borrower Sells the Property to a person or persons meeting the requirements of paragraphs 20(a) through 20(f), inclusive (herein an "Eligible Purchaser'), before the end of the Affordable Tenn, Lender shall recapture from such Sale a share of the Equity as provided in Section 22 hereof. 21. Lender's Right to Designate an Eligible Purchaser Upon receipt of the Notice of Intent to Transfer, the Lender shall have the right. but not the duty, to designate an Eligible Purchaser to purchase the Property from its list of interested buyers. At any time after receipt by the Lender of the Notice of Intent to Transfer and before Borrower has opened escrow with another buyer, provided that Lender shall have a minimum of thirty (30) days from the date the Lender receives the Notice of Intent to Transfer, the Lender shall notify the Borrower regarding whether or not the Lender intends to exercise its right to designate an Eligible Purchaser. The notification to the Borrower regarding the right to designate an Eligible Purchaser shall be sent by certified mail, return receipt requested. If the Lender exercises this right to designate an Eligible Purchaser, the Lender shall cause an escrow for the purchase of the Property to be opened within thirtv (30) days following such notification to the Borrower, and the designated Eligible Purchaser shall purchase the Property within ninety (90) days following the receipt by the Lender of the Notice of Intent to Transfer. The City designated buyer shall be prequalified by a lender approved by the City. 22. Equity Sharing (a) Equity Shared Between Borrower and Lender Upon a Sate of the Property to an Eligible Purchaser during an Affordable Term, then upon such Sale the Lender shall receive from the proceeds of such Sale, an amount equal to the Lender's Equity Share multiplied by the Equity, as 10 Cuv ol'NwaO%IIOP&P6Docd ol'Lusi 21616 such terms are defined below. Provided, however, that if there are insufficient funds resulting from the Sale of the Property to fully pay off the Note and the Lender's Equity Share, then Lender shall recapture the entire net proceeds from such Sale. The net proceeds of Sale means the sale price of the Property minus the repayment of all loans prior to the Lender loan minus closing costs. Prepayment of the Note shall not affect Borrower's obligation to share the Equity as provided herein and as provided in the Resale Restriction. (b) Calculation of Equity Sharing (1) Initial Equity Shares The Lender's initial share of the Equity shall be sixty - nine percent (69 %) (the "Lender's Initial Equity Share") and the Borrower's initial share of the Equity shall be thirty -one percent (31 %) (the "Borrower's Initial Equity Share "). The Lender's Initial Equity Share, as provided in the immediately foregoing sentence, is calculated by dividing (i) the original principal amount of the Note; by (ii) the initial purchase price of the Property. The Lender's Initial Equity Share will not change as a result of the assumption of the Note by an Eligible Purchaser. (2) Reduction in Lender's Equity Share In the event of a Sale, the Lender's Equity Share and the Borrower's Equity Share, shall be the percentages provided in the following table (the Lenders Equity Share will not change as a result of the assumption of the Note by an Eligible Purchaser): If the Closing of the The Lender's Equity Share The Borrower's Equity Share Sale Occurs: Will Be: Will Be: more than 5 years, but Lender's Initial Equity Share minus Borrower's Initial Equity Share less than 15 years one (1) percentage point plus one (1) percentage point after the date of the Note more than 15 years. Lender's Initial Equity Share minus Borrower's Initial Equity Share but less than 30 years two (2) percentage points plus two (2) percentage points after the date of the Note more than 30 years, Lender's Initial Equity Share minus Borrower's Initial Equity Share but less than 45 years three (3) percentage points plus three (3) percentage points after the date of the Note 45 or more years after Lender's Initial Equity Share minus Borrower's Initial Equity Share the date of the Note lOUr (4) percentage points plus four (4) percentage points (c) Equity Defined Equity means the dollar amount that constitutes the difference between the Maximum Restricted Resale Price and the sum of the following amounts: Oe'of Pona50fIOP;80 -aD,M If'hLli 21617 (1) the outstanding principal of the First Note and First Lender Deed of Trust, as such terms are defined in the Note: (2) the original principal of the Note and the Lender Deed of Trust; (3) all amounts actually paid by the Borrower to purchase the Property, including (i) Borrower's downpayment. if any, not including the loan from Lender to Borrower, (ii) escrow fees. (iii) transfer taxes, (iv) recording tees, (v) brokerage commissions and (vi) similar costs of acquisition actually paid by the Borrower, plus not less than the legal rate of interest on those cash payments. Provided, however, that the foregoing amounts shall not be included to the extent any of the foregoing amounts, or any portion thereof, were "rolled into" or paid out of the Note or the First Note: and (4) amounts actually paid by the Borrower for capital improvements to the Property. provided such improvements were preapproved by Lender prior to construction of such improvements and provided that such improvements have been documented to the satisfaction of Lender, plus not less than the legal rate of interest on those cash payments. (d) No Additional Interest Except in the event of a default under the terns of the Note. the Lender Deed of Trust and /or the Resale Restriction, interest shall not accrue on the Note and the entire amount which Lender shall be entitled is the amount determined in this Section. 23. Sale After Affordable Term In the event that a Borrower owns the Property for more than forty-five (45) years and the Affordable Term applicable to that Borrower expires, the note shall become due and payable in full at such time. NON - UNIFORM COVENANTS Borrower and Lender further covenant and agree as follows: 24. Acceleration Remedies Upon Borrower's breach of any covenantor agreement of Borrower in this Lender Deed of Trust, including the covenants to pay when due any sums secured by this Lender Deed of Trust. Lender. prior to acceleration, shall give notice to Borrower as provided in paragraph 12 hereof specifying: (a) the breach: (b) the action required to cure such breach; (c) a date, not less than ten (10) days from the date the notice is mailed to Borrower, by which such breach must be cured: and (d) that failure to cure such breach on or before the date specified in the notice may result in acceleration of the sums secured by this Lender Deed of Trust and sale of the Property. 12 Cit) or N)Wa b lOP'R'J *Do d of —I 0 0 2 1618 The notice shall furt her inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the nonexistence of a default or any other defense of Borrower to acceleration and sale. If the breach is not cured on or before the date specified in the notice, Lender, at Lender's option, may declare all of the sums secured by this Lender Deed of Trust to be immediately due and payable without further demand and may invoke the power of sale and any other remedies permitted by applicable law. Lender shall be entitled to collect all reasonable costs and expenses incurred in pursuing the remedies provided in this Section 23, including. but not limited to, reasonable attorneys' fees. If Lender invokes power of sale, Lender shall execute or cause Trustee to execute a written notice of the occurrence of an event of default and of'Lender's election to cause the Property to be sold and shall cause such notice to be recorded in each county in which the Property or some part thereof is located. Lender or Trustee shall mail copies of such notice in the manner prescribed by applicable law. Trustee shall give public notice of sale to the persons and in the manner prescribed by law. After the lapse of such time as may be required by applicable law. Trustee, without demand on Borrower, shall sell the Property at public auction to the highest bidder at the time and place and under the terns desig- nated in the notice of sale in one or more parcels and in such order as Trustee may determine. Trustee may postpone sale of all or any parcel of the Property by public announcement at the time and place of any previously scheduled sale. Lender or Lender's designee may purchase the Property at any sale. Trustee shall deliver to the purchaser Trustee's deed conveying the Property so sold without any covenant or warranty, expressed or implied. The recitals in the Trustee "s deed shall be rp ima facie evidence of the truth of the statements made therein. Trustee shall apply the proceeds of the sale in the following order: (1) to all reasonable costs and expenses of the sale, including, but not limited to, reasonable Trustee's and attorneys' fees and costs of title evidence: (2) to all sums secured by this Lender Deed of Trust; and (3) the excess, if any, to the person or persons legally entitled thereto. 25. Borrower's Right to Reinstate Notwithstanding Lender's acceleration of the sums secured by this Lender Deed of Trust due to Borrower's breach Borrower shall have the right to have any proceedings begun by Lender to enforce this Lender Deed of Trust discontinued at any time prior to five (5) days before the sale of the Property pursuant to the power of'sale contained in this Lender Deed of Trust or at any time prior to entry of a Judgment enforcing this Lender Deed of Trust if: (a) Borrower pays Lender all sums which would be then due under this Lender Deed of Trust and the Note had no acceleration occurred: (b) Borrower cures all breaches of any other covenants or agreements of Borrower contained in this Lender Deed of Trust: 13 Ory of VooWSH01 of Imu • 0 21619 (c) Borrower pays all reasonable expenses incurred by Lender and Trustee in enforcing the covenants and agreements of Borrower contained in this Lender Deed of Trust and in enforcing Trustee's remedies as provided in paragraph 23 hereof. including, but not limited to, reasonable attorneys' fees; and (d) Borrower takes such action as Lender may reasonably require to assure that the lien of this Lender Deed of Trust. Lender's interest in the Property and Borrower's obligation to pay the sums secured by this Lender Deed of Trust shall continue unimpaired. Upon such payment and cure by Borrower, this Lender Deed of Trust and the obligations secured hereby shall remain in full force and effect as if no acceleration had occurred. 26. Assignment of Rents: Appointment of Receiver: Lender in Possession As additional security hereunder, upon acceleration under paragraph 23 hereof or abandonment of the Property, Lender, in person, by agent or by judicially appointed receiver shall be entitled to enter upon, take possession of and manage the Property and to collect the rents of the Property including those past due. All rents collected by Lender or the receiver shall be applied first to payment of the cost of management of the Property and collection of rents, including, but not limited to. receiver's fees, premiums on receiver's bonds and reasonable attorneys' fees, and then to the sums secured by this Lender Deed of Trust. Lender and the receiver shall be liable to account only for those rents actually received. 27. Reconveyance Upon satisfaction of both of the following conditions: (i) payment of all sums secured by this Lender Deed of Trust and (ii) tennination of the Resale Restriction, Lender shall request Trustee to reconvey the Property and will surrender this Lender Deed of Trust and all notes evidencing indebtedness secured by this Lender Deed of Trust to Trustee. Trustee shall reconvey the Property without warranty to the person or persons legally entitled thereto. Such person or persons shall pay all costs of recordation, ifany. PAYMENT OF THE NOTE SHALL NOT AFFECT BORROWER'S OBLIGATION TO SHARE THE EQUITY WITH Lender AS PROVIDED HEREIN AND SHALL NOT TERMINATE THIS LENDER DEED OF TRUST. OR OTHERWISE AFFECT THE TERMS OF THIS LENDER DEED OF TRUST. 28. Substitute Trustee Lender, at Lenders option, may from time to time appoint a successor trustee to any Trustee appointed hereunder by an instrument executed and acknowledged by Lendermid recorded in the office of the Recorder of the county where the Property is located. The instrument shall contain the name of the original lender. Trustee and Borrower, the book and page where this instrument is recorded, and the name and address of the successor trustee. The successor trustee shall, without conveyance of the Property, succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law. This procedure for substitution of trustee shall govern to the exclusion of all other provisions for substitution. 29. Request for Notices Borrower requests that copies of the notice of sale be sent to Borrower's address which is the Property Address. 30. Statement of Obligation Lender may charge a fee not to exceed Fifty Dollars ($50.00) for furnishing the statement of obligation as provided by Section 2943 of the Civil Code of California. 14 on or NoNa��ci iov,xra.;.n«d .,i rn,w 21620 31. Lender Deed of Trust Rider The Lender Deed of Trust Riderexecuted by Borrower is attached hereto and made part of this Lender Deed of Trust. 32. Resale Restriction The Property is subject to the Affordable Housing Resale Restrictions, Option Agreement, and Option to Designate Purchaser ( "Resale Restriction') between Lender and Borrower, which are not attached hereto but are incorporated by reference. Borrower acknowledges receipt of said Resale Restriction and agrees, for himself, his heirs, successors and assigns to be bound by the same. 33. War of Borrower Borrower warrants to Lender that Borrower is (i) a first -time home buyer. that is, he or she has not owned a home within the three -year (3 -year) period immediately preceding the date of the Note; or (ii) a displaced homemaker, as defined above. 34. Further Warranties of Borrower Borrower further warrants to Lender as follows: (a) That Borrower's annual gross income does not exceed eighty percent (80 %) of the median income for the San Diego County metropolitan area, as adjusted for family size, as said median income is determined by the Department of Housing and Community Development, as amended from time to time, on the date of the recordation of this Lender Deed of Trust. (b) That for so long as Borrower owns the Property during the Affordable Term, Borrower will reside in the Property as Borrower's principal place of residence. Borrower agrees not to sublet, lease or rent out the Property during the term of this Lender Deed of Trust. (c) That Borrower does not hold, directly or indirectly, "net family assets ", as defined in 25 Cal. Code of Regulations Section 6914, whose aggregate value exceeds those limits referenced within 25 Cal. Code of Regulations Section 6914. As used herein, the term "fiquid assets" refers to cash and assets which are readily convertible to cash within a reasonable period, including but not limited to savings and checking accounts, certificates of deposit of any tern, marketable securities, money market and similar accounts, mutual fund shares, and insurance policy cash values. The tern "liquid assets " shall not include retirement funds which are not readily accessible or which cannot be accessed by the buyer without the buyer incurring a penalty. 35. Foreclosure by Holder of Senior Lender Deed of Trust This Lender Deed of Trust is subordinate to any deed of trust or mortgage on the Property made by or held by an institutional lender or investor. Any party, and its successors and assigns, receiving title to the Property through a trustee's sale, a judicial foreclosure sale or deed in lieu of foreclosure of such deed of trust or mortgage. and any conveyance or transfer thereafter, shall receive title fire and clear of the provisions of this Lender Deed of Trust and any and all affordability restrictions. 36. Request for Notice of Default Lender requests that copies of notices of foreclosure from the holder of any lien which has priority over this Lender Deed of Trust be sent to Lender's address, as set forth on page I of this Lender Deed of Trust, as provided by Section 2924b of the Civil Code of California. 15 Cm of Pnu e, SHOP nn1 • • 2162 37. Usury If a court of competent jurisdiction determines, byway of final unappealable order or judgment, that the interest rate charged under the Note secured by this Lender Deed of Trust is usurious, then such rate shall automatically and retroactively be reduced to the maximum rate allowed under applicable law. IN WITNESS WHEREOF, Borrower has executed this Lender Deed of Trust. Date: U I� �J 4 Borrower: Jason Richards 16 Gp el Tma 0 0 21622 EXHIBIT "A" Legal Description of Property 17 Gry of Powav'AI IDV�x J "oDeeJ ofTrua 0 0 21623 LEGAL DESCRIPTION PARCEL 1: LOT 30 OF PACIFIC HOMES OF SAN DIEGO UNIT NO. 1, IN THE CITY OF DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 7134, OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, DECEMBER 1971. PARCEL 2: POWAY, COUNTY OF SAN FILED IN THE OFFICE AN EASEMENT AND RIGHT OF WAY FOR INGRESS AND EGRESS TOGETHER WITH THE RIGHT AND ENJOYMENT IN AND TO LOTS 33, 34, 56 AND 74 OF PACIFIC HOMES OF SAN 'DIEGO UNIT NO. 1, IN THE COUNTY OF SAN DIEGO,'STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF N0. 7134, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, DECEMBER 9, 1971. OESCLTR -0 /06/84bk 0 0 21 624 ACKNOWLEDGMENT State of California County of San Diego On A , I B , 200 S, before me yTwti� i< lei appeared. _pa "s•'� (or proved to me on the basis of satisfactory evidence) to be the person,,(a j whose name( is /are subscribed to the within instrument "DEED OF TRUST" and acknowledged to me that he /skeklw-y executed the same in his /heir authorized capacity(jtrsj, and that by his/h signature(kon the instrument the person(,aj, or the entity on behalf of which the person(x) acted, executed the instrument. WITNESS my hand and official seal. Signature 1 . STEPHEN R. BONNEY Commission # 1372504 .'m Notary Public - California_ San Diego county My Comm. Expires Aug 30, 2006 1R fng nr PI1,1SI P)PIV DeM ofI nisi 0 2 1625 NOTICE: THE DEED OF TRUST WHICH THIS DEED OF TRUST RIDER SUPPLEMENTS SECURES A SHARED EQUITY LOAN 'THE LOAN SECURED BY THAT DEED OF TRUST MAY REQUIRE PAYMENT OF PRINCIPAL, INTEREST AND A PORTION OF THE EQUITY UPON THE SALE OR TRANSFER OF THE PROPERTY OR UPON A PREPAYMENT. DEED OF TRUST RIDER (80% AMI) THIS DEED OF TRUST RIDER ( "Rider") is attached to and made a part of the Deed of Trust dated Pro a, I n T / 1 2005, made between the City of Poway ( "Lender'), as lender and executed by Borrower. Borrower agrees to the provisions of this Deed of Trust Rider in addition to those of the Deed of Trust. THE LANGUAGE OF THIS RIDER PREVAILS OVER THE DEED OF TRUST IN THE EVENT OF A CONFLICT. 1. Borrower agrees that where Lender - administered funds continue to be used in financing the purchase or continued use of the Property, no transfer of the Property will be permitted and no successor -in- interest to Borrower will be permitted to assume the loan of Borrower evidenced by the Note, unless the written consent of Lender to the transfer has been first obtained. No such consent will be given by Lender except in the following limited circumstances: (a) the transfer results from the death of a Borrower and the transfer is to the surviving spouse of Borrower and the surviving spouse is also a Borrower; (b) a transfer by a Borrower to his or her spouse when the spouse becomes, by such a transfer, a co -owner of the Property; (c) a transfer of the Property resulting from a decree of dissolution of the marriage or legal separation or from a property settlement agreement incidental to such a decree which requires Borrower to continue to make payments on the Note and by which a spouse who is already a Borrower becomes the sole owner of the Property: (d) a transfer by a Borrower to an inter vivos trust in which Borrower is the sole beneficiary; and /or, (e) a transfer in accordance with the ownership restrictions contained in paragraphs 17, 18, 19, 20 and 21 of the Deed of Trust. 2. The Deed of Trust is subordinate to any deed of trust or mortgage on the Property made by or held by an institutional lender or investor. Any party, and its successors and assigns, receiving title to the Property through a trustee's sale, a judicial foreclosure sale or deed in lieu of foreclosure of such deed of trust or mortgage, and any conveyance or transfer thereafter, shall CaN of Poway \SIIOI' \80%Deedoi rnislRider 21 626 receive title free and clear of the provisions of the Deed of Trust and any and all affordability restrictions. 3. The Deed of Trust and this Rider shall be construed and interpreted to comply with applicable provisions of state law, including precedential authority allowing a public entities to preserve affordable housing resources, including low and moderate income housing, within a city and /or county through the use of resale restrictions, options and/or equity sharing mechanisms intended to preserve these affordable housing resources to the maximum extent possible and for the longest term feasible. NOTICE TO BORROWER: Do not sign this Deed of Trust Rider if it contains blank spaces. All spaces should be completed before you sign. Dater woS Borrower: Jason Richards Gn oI 7