Deed of Trust 2006-0403435Recording requested by:
CHICAGO TITLE COMPANY
(O� M 15c0 — I
NO CHARGE ON THIS DOCUMENT FOR
THE BENEFIT OF
THE CITY OF POWAY
12865
Recording Requested By
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And When Recorded Mail To:
THE CITY OF POWAY
13325 Civic Center Drive
Poway, CA 92064
ATTN: Housing Program Manager
CIFFIrlaL RECORD'•
;-[I DIEGO CILI N r'. REEF IRDER'S FIFFICE
GREGOR', 'J. •;ndTH,11RINTI' RECORDER
EE ,_.[Iu
2006- 0403435
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.
DEED OF TRUST
(80% AMI)
THIS DEED OF TRUST ( "Lender Deed of Trust ") is made this 23rd day, of May 2006, among
\ the truster, W/.I J �44OW o Lauritzen ( "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 13736 Midland Road, 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 ";
This Deed of Trust is second and subject to that certain
Deed of trust recording concurrently herewith
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DOC,# 2006 - 0403435
II ill! III IIIIIIIIIIIIIIIIIIIIIIIHI 11111111 II I I III I i III
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TO SECURE to Lender the repayment of the indebtedness evidenced by Borrower's shared
equity promissory note dated May 23, 2006, 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 of this Lender Deed of Trust; and the performance of the
covenants and agreements of Borrower contained herein.
THIS DEED OF TRUST is subordinate to the First Note and First Lender Deed of Trust, as
such terms are defined in the Note.
BORROWER covenants that Borrower is lawfully seized of the 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:
L 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 fail 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 either may deem necessary to protect the security hereof, Lender or Trustee being authorized
to enter upon the Property for such purposes; appear in and defend any action or proceeding purporting
to affect the security hereof or the rights or powers of Lender or Trustee; pay, 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.
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4. Prior Mortgages and Deeds of Trust; Charges, Liens Borrower shall perform all of Borrower's
obligations under any mortgage, deed of trust or other security agreement with a lien which has priority
over this Lender Deed of Trust, including Borrower's covenants to make payments when due.
Borrower shall pay or cause to be paid all taxes, assessments and other charges, fines and impositions
attributable to the Property which may attain a priority over this Lender Decd of Trust, and leasehold
payments, if any.
5. Hazard Insurance Borrower shall keep the improvement(s) now existing or hereinafter erected
on the Properly 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 carver providing the insurance shall be chosen by Borrower subject to approval
by Lender, provided that such approval will not he 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 form acceptable to Lender. Lender has the right to hold the policies and renewals
thereof, 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.
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 of Trust.
6. Preservation and Maintenance of Prop 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 of the 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 covenants, 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 Securi ty . If Borrower tails to perform the covenants and agreements
contained in this Lender Deed of Trust, or ifany action or proceeding is commenced which materially
affects Lender's 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 Deed of Trust, 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.
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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 any expense or take any action hereunder.
8. Inspection Lender may make or cause to be 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 part 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 refuse to extend time for payment or otherwise
modify amortization of the sums secured by this Lender Deed of Trust by reason of any 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 afforded by applicable law, shall not be a waiver
of or preclude the exercise of any such right or remedy.
11. Successors and Assigns Bound, Joint 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, subject 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.
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13. Governing 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 of Trust 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
Deed of Trust at the time of execution 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
beneficial 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 after 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:
(1) The principal balance of Borrower's loan after the refinancing, does not
exceed the principal balance of the Borrower's loan before the refinancing plus reasonable closing
costs; or
(2) Both of the following conditions are met, and provided that the City provides
advance 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 for 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 Term The "Affordable Term " shall be the period of forty -
five (45) years measured from the date each Borrower obtains ownership or any interest in the
Property (the "Affordable Term "), and provided that such ownership or any interest in the Property is
transferred prior to expiration of the Affordable Term, then the Affordable Tenn shall begin anew
from the date each subsequent Borrower obtains ownership or any interest in the Property and shall
nm for forty -five (45) years beginning on such date. During the Affordable Tenn any transfer of the
Property shall be subject to the provisions of the Resale Restriction. Any subsequent transfer by the
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Borrower to ;a subsequent Borrower shall also be subject to the provisions of this Resale Restriction
until the end'of the ,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 § §33334.3 and 33413, which sections define the "longest feasible time" to include
"unlimited duration."
16. Determination of Maximum 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(0, below; and
(ii) the purchase price which would result in a Monthly Housing Cost, as determined by the Lender,
which does not exceed the sum of: (A) the product of one twelfth (1 /12) of thirty -five percent (35 %)
times eighty percent (80 %) of median income for the San Diego metropolitan area, as adjusted for
household size appropriate to the unit, plus (B) the three percent (3 9 %) downpayment.
Notwithstanding the foregoing or anything contained herein to the contrary, under no circumstances
shall the Maximum Restricted Resale Price be 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 Five Hundred Dollars ($500.00) per occurrence.
, (c) Monthly Housing Cost As used herein "Monthly Housing Cost" means all of the
following associated with the Property, estimated or known as of the date of the proposed Sale of the
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 refinancing with cash out, if allowed 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 fees, 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); (iv) any homeowner association fees; (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
of the Notice of Intent to Transfer.
(d) Capital Improvements The Maximum Restricted Resale Price shall be increased by a
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 term of the Borrower's ownership and reasonable closing costs and
marketing expenses.
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(e) Maximum Restricted Resale Price Calculation Requests At any time 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 same in writing, provided that such calculation may not be obtained more frequently than once
per calendar year during the term of the Note.
(f) Determination of Fair Market Value If it is necessaryto 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 notifying the public of such intent, including, without limitation, priorto notifying real estate
brokers or 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
t certified mail return receipt requested, to the City of Poway, 13325 Civic Center Drive Poway, CA
92064, Attention: Loan Administrator, or such other address as the Lender may hereafter designate,
g in writing.. The Purchaser has the right to withdraw the Notice of Intent to Transfer prior to the
opening of escrow to purchase the property
(b) Within fifteen (15) days of delivery 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) Within fifteen (15) days of delivery 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, plumbing, 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 notify 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
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(f) 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.
18. Lender's Election to Exercise Option or Require Sale to an Eligible Purchaser Within forty-
five (45) days 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 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 Property, as provided in Section 19, below;
(b) notify the Borrower that the Borrower may only Sell the Property to an Eligible
Purchaser, as defined hereinbelow, 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 Trust: or
(c) notify the Borrower that the Borrower may only Sell the Property to an Eligible
Purchaser designated by the Lender for the Maximum 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 Note, the Resale Restriction and the Deed of Trust.
w;. 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) Grant of Oxon Borrower hereby grants 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 Price ") shall be the greater of (i) the Maximum Restricted Resale Price, as
defined in Section 16 hereof. 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) Term 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 Property is transferred
prior to expiration of such forty-five (45) year period, then the term of the Option shall commence on
the date that title to the Property is recorded in the name of a subsequent Borrower, and shall expire
forty-five (45) years thereafter.
(c) Exercise of Option The Option may be exercised by (i) the Lender's delivery to
Borrower of 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 any default under the Note, the Lender Deed of Trust or the Resale Restriction. In the event
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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
Property 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 reportcreated 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) 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 for 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 thirty (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 purposes. Escrow shall close promptly 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 Property to an Eligible Purchaser at or Below the 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 anytime 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 %) of the median income for the San Diego metropolitan
area, as adjusted for family 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
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(b) The Property must be used only as the principal residence of the subsequent purchaser
during thetime of ownership.
(c) The sale price to the subsequent purchaser must be at or below the Maximum 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 Term, 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 from 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 Term, Lender shall recapture from such Sale a share of the Equity as provided in Section
22 hereof.
21. Lender's Riaht 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 thirty (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 Sale 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
CnvolPowav�511OP� %W.6DeeAnffrve�
0
0 12875
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 fifty -six
percent (56 %) (the "Lender's Initial Equity Share ") and the Borrower's initial share of the Equity
shall be forty-four percent (44 %) (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 Lender's 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 (l) percentage point
plus one (I) 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
four (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 o£the following amounts:
CgoPowaNS HOP� ,.Dced.gf ,m
•
12876
(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
lees, (iii) transfer taxes, (iv) recording fees, (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 terms 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 covenant or 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
Cify()W Wey�SMOMU°/a ,AT-1
0
! 12877
The notice shall further 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 terms 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 prima 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
CeypfYUwzv\S IIOP%W6 LA offrust
9
12878
(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) termination 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, if any. 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 Lender's option, may from time to time appoint a successor
trustee to any Trustee appointed hereunder by an instrument executed and acknowledged by Lender and
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
OtyotYowaYGI \SfM /eLXeduRrusi
V
0
0 $2879
31. Lender Deed of Trust Rider The Lender Deed of Trust Rider executed 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
recei pt of said Resale Restriction and agrees, for himself, his heirs, successors and assigns to be bound
by the same.
33. Warranties 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 fancily 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 "liquid 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 term, marketable securities, money market
and similar accounts, mutual fund shares, and insurance policy cash values. The term `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 free 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 1 of this Lender Deed of Trust, as provided by Section 2924b of the Civil Code of
California.
15
f ityoNnway \SI IOP \RO ^, e[kduRnist
0
0 12880
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.
Dar %�
Borrower:: W fit! P Liam J. Lauritzen
Date:
Borrower: Natsuko Lauritz
16
CnyuMow. yl[I01"M*De o f`usl
LEGAL DESCRIPTION
A CONDOMINIUM COMPOSED OF:
PARCEL 1
1`2881
AN UNDIVIDED 1 /48TH FRACTIONAL INTEREST AS TENANT IN COMMON IN AND TO:
LOT 1 OF CITY OF POWAY TRACT NO_. 87 -10, IN THE CITY OF POWAY, COUNTY OF SAN DIEGO,
STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 12668, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, JULY 24, 1990.
EXCEPTING THEREFROM ALL PHASE SEPARATE INTERESTS IN SPACE AND LIVING UNITS AS SHOWN
UPON AND DEFINED IN THE CONDOMINIUM PLAN PHASES 1 AND 2; COUNTRY ROADS CONDOMINIUMS,
RECORDED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, CALIFORNIA, ON
JULY 21, 1992 AS DOCUMENT NO. 92- 0455804 OF OFFICIAL RECORDS.
PARCEL 2:
AN UNDIVIDED 1 /24TH.FRACTIONAL INTEREST AS TENANT IN COMMON IN AND TO THE PHASE 1
SEPARATE INTEREST IN SPACE AS SHOWN UPON AND DEFINED IN THE ABOVE DESCRIBED
CONDOMINIUM PLAN.
EXCEPTING THEREFROM ALL LIVING UNITS LOCATED THEREIN AS SHOWN UPON THE CONDOMINIUM
PLAN REFERRED TO ABOVE.
PARCEL 3:
LIVING UNIT NO. 45, AS SHOWN AND DEFINED UPON THE CONDOMINIUM PLAN REFERRED TO
ABOVE.
PARCEL 4:
THE EXCLUSIVE RIGHT TO THE USE, POSSESSION AND OCCUPANCY OF THOSE PORTIONS OF PARCEL
2 DESCRIBED ABOVE WHICH ARE DESIGNATED ON THE CONDOMINIUM PLAN REFERRED TO.ABOVE AS
"EXCLUSIVE USE COMMON AREAS" BEARING THE SAME NUMBER AS THE LIVING UNIT DESCRIBED IN
PARCEL 3 ABOVE, WHICH SHALL BE APPURTENANT TO PARCEL 3 DESCRIBED ABOVE.
PARCEL 5:
A NON - EXCLUSIVE EASEMENT FOR INGRESS, EGRESS AND RECREATIONAL USE, ON, OVER AND
UNDER THE PHASE COMMON AREA 0? PHASE 2 AS SHOWN UPON THE CONDOMINIUM_ PLAN REFERRED
TO ABOVE; EXCEPTING THEREFROM ANY CONDOMINIUM BUILDINGS THEREON AND ANY PORTION
THEREOF WHICH IS DESIGNATED AS AN EXCLUSIVE USE COMMON AREA, WHICH EASEMENT SHALL BE
APPURTENANT TO PARCEL 3 DESCRIBED ABOVE. THIS NON - EXCLUSIVE EASEMENT SHALL BECOME
EFFECTIVE UPON RECORDATION OF A NOTICE OF COMPLETION FOR ALL OF THE IMPROVEMENTS
LOCATED IN SUCH PHASE 2 AND FURTHER SUBJECT TO THE CONDITIONS AND RESTRICTIONS SET
FORTH IN RECITAL "J" OF THE DECLARATION RECORDED JULY 21, 1992 AS FILE NO.
1992- 455805, OFFICIAL RECORDS.
0ESCLTR- 09/06/94bk
EXHIBIT "A"
Legal Description of Property
12882.
17
CnyutP —, \SHOMM 4DuedoRnist
12883
ACKNOWLEDGMENT
State of California
County of San Diego
On fj�r�e , 2006, before me, e /E /.44 6t6NwN, lk 7 A-eY A �er 6 s6nally appeared,
12 lliakti , ZQ UYt f22v7 personally known to me (or proved to me on the basis
of satisfactory evidence) to be the person(Io whose name fs aresubscribed to the within instrument
`DE$D OF TRUST" and acknowledged to me thaeie al+e4hey executed the same i he r#herr
authorized capacity(, and that b is h�raeiz signatureO on the instrument the person, or the
entity on behalf of which the personw acted, executed the instrument.
WITNESS my hand and official seal.
Signatu -
18
Cit uMoway�140MW/,Da ofl wu t
0
12884
ACKNOWLEDGMENT
State of California
County of San Diego
On ✓ a t't e 2006, before me �a� %e L �`C�P�°'� N Q '7��� �}�ersonally appeared,
A)o k ZeY) personally known to me (or proved to me on the basis
of satisfactory evidence) to be the person* whose name is ap� subscribed to the within instrument
"DEED OF TRUST" and acknowledged to me that 4w sh /they executed the same in hi �/their
authorized capacityO, and that by 1 ' Eq theifsignatureko on the instrument the person(, or the
entity on behalf of which the persono'f acted, executed the instrument.
WITNESS my hand and official seal. TRACIE L MC CLENDQN CMrMbWW 9 1368430
MCIMY RVIC- CaUfar is
19
ftlyofl 'oway\51IOV \ft0 °�oOxdof�ms�
12885
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 May 23, 2006, 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 transler, 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, ajudicial foreclosure sale or deed in lieu of
foreclosure of such deed of trust or mortgage, and any conveyance or transfer thereafter, shall
GtyotPowayN I0P \80% UeedofI rustRider
.
y
receive title free and clear of the provisions of the Deed of Trust and any and AAROMMility
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.
Dat
Borrower: W1J.1ILddn4t/kb 1 / Wi am J. Lauritzen
Date:
Bo over: Natsuko Laurit
C ityoftway\S I10P \80 %Deedof rrust R ider
2