SERVICING AGREEMENT
,........,
~'M'EMORANDUM IrO: ' ]
The City Commission of the City of Clearwater
SUBJECT:
Agenda No.
Meeting Date: ~!/l.)/75
R":;i:\HILITATIO:: LOA:: P~()G!\A'r - SERVICI:)G Ar.REsn:'iT
RECOMMENDATION: The nortga~e loan Servich~ ,'\'~reeI:lent betHeen the City of
Cleannter and U. S. Hone :!ortga~e Corporation be aflproved.
j( And that the appropriate officials be authorized to execute some.
BACKGROUND: By R<2,solution 'To. 75-59, passed and adopted on April 21,1975, the
City Commission a~Drove(1 the guidelin~s for implementation of the City of Clearwater
Rehabilitation Loan Progran. The final reiltaining step in this inplenentation is the
execution of a Servicing Agreement for processing collection of paynents, escrow
accounts, etc., under the nortgages to be held by the City of Cleanlater.
Solicitation of proposals was malIe to tHcnty-three (23) 11lcrtgage
banking firns and local savin~s and loan associations usinS the list of qualified
com~)anies supplied to us by the PEA. L\ proposal Has received fro'1 only U. S. Hm"e
\Iortgage Corporation.
That proposal was to T)erforn '::uU serV1C1Q", for a fl~e of l/!, of
l''l of the interest collected per clOnth. T:,e ,)roposal fee is reasonable an(~ eqllals
t~H' 10lv2st bid received by other r:mnicipalities \';:10 have underta1-:en si:,lilar progra~ns.
~~
'V\~~. . ~~
J,"'~ .r
V7~~
,
Commission Disposition:
Follow-up Action:
Submitted by:
fiAf3J't/
City Manager
Advertised:
Date:
o Affected
Parties
Notified
of Meeting
1'5'09//- /3
Dote a Sequential
Reference
B Not Required
[J Not Required
Costs: ::(rn:
Funding Source:
o Capitol Improve-
ment Budget
o Operating Budget
o Other
GlAttachments:
pro;JOsecl
Se.rviciw;
Agree.nent
Poper:
Originating Department:
~lOUS L:G (, REDEVELOP~ [r:::-r
Appropriation Code
o None
-
'';;:;'-
, .
l
I SERVI CING AGREEMENT
I
=I.
1HIS AGREEMENT made and entered into this -Yo) day of
~
1975, between the City of Clearwater, Florida, hereinafter called the "City" and
u.s. HOME MORTGAGE CORPORATIOr~, a Florida corporation, having its principal office
at One Countryside Office Park, Clearwater, Florida, 33515, hereinafter called
the "Servicer".
WITNESSETH:
WHEREAS, the City has acquired or may acquire as holder and owner, certain
bonds or notes secured by mortgages or deeds of trust, on real property and whereas
the parties hereto comtemplate that the Servicer shall service in the manner as
herein provided such bonds or notes and mortgages or deeds of trust subject to the
terms hereof, which bonds and/or notes, mortgages or deeds of trust are hereinafter
sometimes referred to as "the mortgages"; and
WHEREAS, the city desires the Servicer to service the mortgages in the manner
as herein provided.
NOW THEREFORE, in consideration of the mutual covenants and agreements herein
contained, it is agreed by and between the parties hereto as follows:
COLLECTIONS FROM MORTGAGOR
1. Effective from the date of delivery of the mortgages and continuously there-
after until the principal and interest of the mortgages are paid in full, the Ser-
vicer shall proceed diligently to collect all payments due under the mortgage as and
when the same become due and payable and deposit and remit the aggregate of such
payments (less the servicing fee herein provided for) in accordance with the terms
hereof. The Servicer also agrees to service the mortgages in accordance with accep-
table mortgage practices of prudent lending institutions. The Servicer shall take
special care in ascertaining and estimating, as provided in the mortgages the annual
amount of taxes, assessments, and insurance premium that become due and payable,
to the end that the monthly installments payable by the mortgagor or mortgagors, as
the case may be, will be sufficient to pay such charges as and when they become due
and payable.
PAYMENT OF CHARGES
2. To the extent afforded by funds of the mortgagors or the City in the hands
of the Servicer or advanced by the Servicer the Servicer shall promptly discharge all
of the obligations of the mortgagee, as well as every obligation arising hereunder.
The Servicer shall, upon payment of such obligations, forward to the City for exam-
ination all receipted bills or other satisfactory evidence of such payments, if re-
quested.
-1-
( ()
-2- :
'~OGality and in such amountd as are required by the City, as lhe case may be,
and in insurance companies rated "B Plus" or better by Alfred M. Best Company, Inc.,
and satisfactory to the City. The Servicer shall hold for the account of the City
all such policies which shall be endorsed in such a manner as to indicate that
losses payable thereunder are payable to the City as the interest of such mortgagee
may appear or in lieu thereof, policies may read "D. S. Home Mortgage and! or assigns."
TIle Servicer s]lall use its best efforts to collect the proceeds from such policies
with respect to all losses which may occur, and after obtaining the endorsement
of the mortgagor, the Servicer shall transmit all checks for SUdl proceeds to the
City or, if the loss be $1,000 or less, in lieu of such transmittal, the Servicer
shall endorse such checks and drafts on behalf of the City and permit the mortgagor
to apply such proceeds to the repair of the property. In the cases where losses
shall have occurred for which the insuring company or companies shall pay under
and pursuant to its or their policy or policies in excess of $1,000, the Servicer
shall inspect all repairs so as to ascertain if the work is done properly unless
instructed to the contrary by the City as mortgagee. The Servicer shall promptly
notify the City of any loss or damage by fire, or from any cause, to the mortgaged
premises in all cases where the insuring company or companies shall pay in excess
of $1,000 for the loss or losses sustained, and shall not make any agreement in such
cases with respect to the rehabilitation of the property without the written consent
of the City.
ADDITIONAL PROTECTION FOR MORTGAGEE
6. The Servicer agrees that it shall, at its own cost and expense, at all times
during the existence of this agreement, maintain fire and extended coverage errors
~~~ns i~!lrance in an amOlmt adequate to comply with whatever co-insurance
clause may be applicable in said errors and omissions policy to the aggregate amount
of mortgages serviced by it, in a company or companies acceptable to the City which
shall indemnify the Servicer for any loss by reason of any and all Sum5 which the
Servicer shall become obligated to pay on account of any claim made against the Ser-
vicer and caused by any'negligent act, error or omission of the Servicer or its
employees for failure to require, procure, maintain or provide fire and extended
coverage insurance. The Servicer shall furnish a certificate of such fire and ex-
tended coverage error and omission insurance to the City, which certification must
include an attestation on the part of the insurance company that the coverage of the
policy shall not be reduced in amount or cancelled without ten days prior written
notice by registered mail to the City. The Servicer shall also furnish to the City
a certification as to the aggregate amount of unpaid principal balances of all mort-
gages serviced by the Servicer for the City and others.
-3-
. Servicer agrees at its ~wn cost and expense to maintain Itdequate fidelity bond
coverage of the employees of the Servicer who handle or may have occasion to handle
any funds collected by the Servicer under this ~greement. The Servicer shall fur-
.nish to the City certification by the carrier of such fidelity coverage attesting
~ to the fonn or type of bond evidencing such coverage, together with the amount,
tenn, date of corrnnencement, armi versary or renewal date and name of insured and
affinnatively assuring the City that such coverage carmot be changed, other than
by an increase in amount, or cancelled without ten days prior written notice by
registered mail to the City.
Regardless of any provisions contained in this agreement which require that
the Servicer herein shall maintain fire and extended coverage error and omissions
1nsurance and fidelity bond coverage, the Servicer shall not in anyway or to any
extent be relieved of and from its accountability and responsibility to the City for
the proper performance under this agreement of the duties and obligations to be
perfonned hereunder by the Servicer.
DEFAULTS OF MORTGAGOR
7. In the event that principal and interest and all other maintenance charges
with respect to any mortgage are not paid on or before the fifteenth (15) day of
the month they become due and payable, Servicer shall notify mortgagor of such delin-
quency by means of an appropriate letter or other printed transmittal. If full
monthly payments of principal, interest and other maintenance charges are not paid
on or before the first day of the month following the month they become due and
payable, the Servicer shall notify the mortgagor and the City of such default. The
Servicer shall send to the City a statement listing the account numbers, the due
date and amount of default for each such mortgage together with a report of the
servicing activities in respect to each such mortgage. The Servicer shall not be
required to undertake any further collection activities after notifying the mortgagor
and the City of any mortgage in default for non-payment. The Servicer shall retain
such mortgages among its accounts for a period of sixty (60) days after the date
of default during which'time the City will counsel with the mortgagor and attempt
to cure such default. If after sixty (60) days from date of default such default
1S not cured, the City shall withdraw such mortgages from this agreement and the
Servicer is relieved of any further responsibilities
In the event any mortgagor
fails to perfonn any other covenant or obligation under any mortgage and such failure
continues for a period of one month from the time such default comes to the atten-
tion of the Servicer, the Servicer on such day shall send to the City a report 1ist-
ing the account numbers and stating in each case the nature and extent of the de-
fault and the efforts taken by the Servicer to cause such default to be cured,
-4-
, .
together wit}l a recommendation as to the future action to beltaken in respect there-
to. In addition to the statement reports and recommendations as to defaults here-
inabove required, the Servicer shall send to the City such additional statements,
reports and recommendations of the character hereinabove provided, as the City
may from time to time request.
LIMITATION OF SERVICER'S AUTHORITY
8. The Servicer is only authorized to receive and forward the monthly payments
as provided in the bonds or notes and mortgages for interest, amortization of prin-
cipal, service charges, and other maintenance charges, and s}lall not receive and
forward to the City any additional sums in reduction of the principal amount of the
mortgage or for the retirement thereof (unless permitted by the terms of the mortgage)
without the written consent and authority of the City. The Servicer is not auth-
orized or empowered to waive or vary the terms of any bond, note or mortgage and
shall not at any time waive or consent ot a postponement of strict compliance on
the part of the mortgagors with any tenn, provision or covenant of the mortgages,
nor grant, in any other manner, indulgence to any mortgagor.
INSPECTIONS
9. The Servicer shall not be required to make any inspections of the premises
covered by the mortgages.
VACANCIES AND SALES
10. The Servicer shall promptly notify the City of any vacancies In any of the
mortgaged premises which come to its attention. The Servicer shall promptly no-
tify the City of any sale or transfer of the legal or equitable title to any of
the mortgaged premises which also comes to its attention, the date of the instru-
ment transferring the title, and whether or not the purchaser of the premises
purchased the the mortgaged premises subject to the existing mortgage or assumed
the payment thereof, and shall advise the City of the exact post office address
of such a purchaser, and if possible, shall send to it a photostat or other exact
copy of the instrument transferring the title.
11. The Servicer shall keep satisfactory books and records pertaining to the
mortgages, and upon the tennination of this agreement, the City shall be pennitted
at its own expense to make photostat or other copies of such of these records
as it may desire. Such books and records as may be removed from the Servicer's
office for the purpose of photostating or copying, and shall be returned within
a reasonable time. The Servicer shall maintain and preserve all records with re-
pect to each mortgage or loan serviced hereunder for the City until each such
mortgage or loan shall have been paid in full and satisfied and no such records
of the Servicer shall be destroyed without the City's prior written consent.
-5-
.. --.
AUDIT I 1
12. The Servicer shall furnish to the City a financial statement at least
once a year, and the books and records of the Servicer applicable to the mortgages
shall be subject to examination and audit by the City, or any agent at any rea-
sonable time.
ASSI GNMENT
13. This agreement shall not be assignable by the Servicer or its successors,
without the consent of the City, its successors and assigns. This agreement shall
inure to the benefit of the parties hereto and their respective successors or
asslgns.
In the event any owner of any of the mortgaged premises shall satisfy, pay
and discharge the mortgage indebtedness, whether by satisfaction or assignment of
SUCll mortgage debt, then the obligations and rights hereunder of both parties shall
continue in full force and effect with respect to the remaining mortgages.
In the event of either or both the sale or assignment of any or all of the
mortgages which may now or hereafter be serviced by the Servicer for the City
hereunder, the Servicer agrees to service, upon all of the terms and conditions
contained in this agreement, such mortgages so sold or assigned, for the party
or parties to whom the City shall have sold or assigned the said mortgages or any
of the same.
SERVI CER - INDEPENDENT CONTRACTOR
14. The Servicer is and shall be an independent contractor and is not and shall
not be subject to direction by the City as to the manner of the performance of the
Servicer's obligation hereunder.
TERMINATION
15. In any event whatsoever, the City may terminate this agreement without
cause upon thirty (30) days notice in writing and by payment to the Servicer of
a sum equal to ~ of 1% of the outstanding balance of each mortgage being serviced
on the date of termination, except, however, that the City shall pay no termination
fee when a mortgage is withdrawn from this agreement by reason of default of such
mortgage as provided in paragraph 7 hereof, or the acceptance of a deed in lieu
of foreclosure, or the satifaction or bona fide assignment of such mortgage to the
mortgagor's designee. The Servicer may terminate this agreement without cause
upon 180 days notice in writing to the City.
Upon termination of this agreement in any manner, Servicer shall forthwith
deliver to the City a statement showing the payments collected and all monies held
by it for payment of taxes, insurance and other charges, and shall immediately
pay over to the City all monies so collected and held. Servicer shall further
-6-
" ,; ,.:',.
tl,lm over to the City at the lei ty' s expense all books, paperslmd records, or
transcripts thereof, pertaining to the mortgages covered by this agreement.
TERM OF AGREEMENT
16. Unless sooner terminated as herein provided, this agreement shall con-
tinue from the date hereof during the term of the mortgage having the longest
terms tlllti1 the principal and interest on all of the mortgages are paid in full.
NO WAIVER
17. None of the prOVISIons contained In this agreement shall be deemed waived,
altered, modified or changed except by an agreement in writing signed by the
parties hereto.
IN WITfNESS HEREOF, each party has caused this agreement to be signed and
executed and its corporate seal hereto affixed in its name by its proper officers
thereunto duly authorized on the day and year written.
CITY OF CLEARWATER, FLORIDA
BY:
u. S. HOME MORTGAGE CORPORATION
y.?-L:~
BY: T.J. Eisch
Ti tIe.
TITLE: President
A tte 13'1::
ct~LJ~
Deputy City '.clerk
, --
Countersigned:
~d/~
Mayor-Commissi r,
rectness:
-7-
r~--~~:-7---' , 'I
"iv1E'fv10RANDUM TO:
I The City Commission of the City of Clearwater
SUBJECT:
1
-
Agenda No. 17
Meetl n 9 Date: 111;-- 1-
-"'TAnn TTATIO; LOX; T>1~IJG",xr - S[RVICI:!r; M;~U:E'.f[;JT
RECOMMENDATION'
a:1(,~ S rloi":h~ Lortgage
___ _ --A ~
The ?lortp;dg0 Loan S(:rvicing Agreement betuecn
Corporation be approved
the City of CleanJ2ter
--
[J And that the oppropriate officiols be authorized to execute same.
eAC.KGROUN D' 'Cl'V ;~'2s011ltio:1 ~:o. 73-59 ~)~'ss,,~cl and adopted on :i]Hi1 21, 1.975, tl1(~ City
l~or~.'n,SSl.on ajJln:ov'~(~ tIle ?;l1i.::le1incs for iGDlcr,cntation of the City of C1eanmter Le:la;)ili,tatio:.
~~Joan Pro,gra:n.. 'Ilhose 9~u:-Ldt-:;line:~) :)Yo"'lid~c1 tflat the. lO(~I1s -\}ollld be scrvi.cl~cl by a privc.lte riLl':;
~;,'(>cia15.;dng in aCCOtnt sc.rvicing and t:wt tl}(~ costs 0 r servicilF~ Hould be cleducl:ed from the:
interest raid The Housing u Rc(lc::vt~loP8ellt Offic(~ (,'as auth()ri:~(~~d to t2":0 [lny 'kCeS:3iJpr
8.cUon to 111p1C:11cnt this Pro(~r3"1. T:1C IIo'Jsing Office r2quc~sted projlo[;,J,ls ror loan serv:LcLng
(rom ("very }"HA aDprovec1 17l0rt,"Jlgc servicc>r in Pincllas Connty, as deterninec1 1)'r thc' TaLl:)2
F:f,\ (I fLLce l'roposalf3 \'lcno also re.ques tc::d fron every savLl:",s (, loan association haviilg an
ofEiG> in the City of Clean-later 111C firms from Hhom proposals Here reC!I!l'str,ci are af; fo1l0\'~
('c'lIC!) ,'lortc"a:"e Corporation
Urhan Sheltec :fort[:;a;;es, Inc.
TT. ~~ FI-)1n_c~ ~-lort.;\~l:?J~ Corporation
C2i~:crlJ'~1 HrO\-,ni C()~"~l';)(lllY
Clf3tlr~later Fedel'al ;;{'j.vin~,s '~l Loan
J(:;~":(~b n: Barl1es;::.c i.jo;':t)a11Y
;~~l<lrt(:r 'l''':-~()rt?,a~~~e C~)-';Lr);~Il"l
r'.1.orid,'l Feder':l1. Savi:1,?"3 & Loan of Larpo
;_Ic c:_-~ iJ.,~:~lJ a (1 :'-:~'o rt .za:~;. 2 Cc r~~,)~1:1 y
First F.:;d'l Sa\':Ln'~s ,; Loan of Cleal":Jt~U"r
rirst F(-~cJ. r 1 S.:lvings (~ LO<J.t1 of ~i"~arpon Spgs
Fra_n~_:lin Fed;:rc~l Sav.iL':.~~S c.:. l~O~1n
Frcedo~ l~eJcrDl Snvin~;s & IJ()3U
I{O~lC feJeral SRvin7s & Loan or St Pete.
Security federal Savin~s & Loan
First Fec10r3.1 ~~,1.",li;1e2-; ~!. Loa.n 0;..- Lar.~~o
'larine O!ortga;:,;e Compil;lY
fo1 ton, \11cn t, ',:j11i:'J'ls
'orth Arleric:m 'lort:';;(,~c: CO':cp:my
Percy ~Jilson ~Grtgilge
Stocl.'\.ton, ~.,~'i"'.IJ.!~,l(;.y) Davin \:i Co.
;--']>-:\l"li_1 ,E. '>IcCur~~1:i.el,~ (:0.
St Pete. Federal Srrv:in:;;s [: LCJall
copy 0 [ the r2q!.F~st for ~)ro~os21s ~L~; at taC::l('.il h:~r\-:;to rrbc. o:J,ly' p~~or()s::ll recei\red t1aS t:h-2
P-('()l~1;Jsn"1 of l.f. S. -1.;()~::e ~~ort:~~a_I~:'l'~ Corporatio-!"I ;.JhL~:l ~.';<:S to ~')c~rfornt full scr'licin:_3 for a fe_\~
... - 'Jf 1-"~':-: of tl~,2 int~',~r::'s t c:JJJ,cl.:::tcd L)cr rlont~'l j_;l~~ 2.t L2chc:l lJGan Scr"1li.cin,~, reC;-:1eIlt h(.J.s
b(?c--.rl appr()'\,red by the Le;(~ctl Dr~partt:lent and t:le Fi;1,'1l1Ce ~~2p:1rtI:1Qnt. Urr.-lcr t~1i.s r}:o~jraEL tl-1(~
rnaxijnurn lonn whlcn can be made is $3,000 Ibe cost tn the City tor servicinc this loan would
lJ.c> $1. 67 per month and ",'QuId reJuc8 monthl:.' as the: !)rinci:)a] balance reduced Considerinr;
t:y, nU"i1;2r uf .loans uhich can 1112 m;'lde 1:rO';( allocate.1 funds, it :is not fC2,';jble at this tine
fnr thc~ City to tITlderL2.:'~_e. servicing 0 f t1~_.:...:sc loans
[C;;;;;'-is;ion Dispo~ition: O#<V'--<~
Submitted by: Advertised:
t~~Jt
I 7S-&/t:'/t7-1/ I
Date B: Sequentia I
Refere-n ce
Follow-up Action:
:0 Not Required
o Not Hequircd
Costs::; 150.0:)
Funding Source:
o Capital Improve-
ment Budget
o Operating Budget
o Other_n-';l"~"
DAttochments:
. 1. Servicing
Agreement
2. Request for
Pro~osal:3
Date:
o Affected
Parties
Noti fi ed
of Meeting
Po per:
Originating Department:
~
~o .
Ilous1.nc; & p',edeveloyment
La;:1n }:'1.FlrJ
Appropriation Code
Dept.
o None
.~
,
j
I
I
j
I
i
,
,
f
I
I
'J
.... ~ :.
"
, .
1
1
~
;;a.' . ,,/,,///"'--_
,,/~~~lOFr."r;'--...
I' ,\~:;) (,/.>-.....
\'~.... "/;":..
" t"-"';' ,I " ~1,e\:.L- ~
\ ....... (" '-, \.,' .1.,.,/ ,J':"":,,./,.t', '" ' <> "
\. .-:-r\-.....~~,' - '<r'\ ~
~C"?, ,,' .."""'!~,
,r-:: ': """',",' : c::::t ~
\5?~~)~~/
~t4TE~~;'"
-"-",,,,,1'
CLEARWATER. FLORIDA 33518
C I T Y
o F
CLEAR'VATEH.
POST OFFICE BOX 4746
"'
Re: City of Clearwater
REHABILITATION LOAI~ PROCRAM
Gentlemen:
The City of Clearwater has established a Rehabilitation Loan Progr~m
which is briefly expained in the enclosed pamphlet. On April 21, 1975 t.he
City CO::JInission approved the guidelines for the hlplementation of til1.s
progr3~ which included a provision that loan servicing would be provided
by privat~ firms specializing in account servicing. The cost of this
service to be paid from the interest received uader the program.
The City has allocated $50,000 to initially fund this program. It
is anticipated that further funds will be made available through Federal
F.ev€;r'ue Sharing and Conununity Devoloprnent funding should this progra~a
prove successful. We anticipate that present funding will enable us to
nake approximately 16 loans within the next six J;'lonths with future loam
dependent upon further funding and repayments. Host loans '-lill bc for
periods of less than 20 years, since borrowers Must pay 20% of income for
total. repayments and tti.XCS and insurance.
If you are interested in servicing these loans for the City of
Clearwater please submit a proposal to this office not lat~r than K~y 19,
1975. We are requestiniS a proposal for servicing in a manner consistent
with the services you gencrally provide for such othe~ accounts, including
an escrow for taxes and insurance, with the cost thereaf cxpressed as
a percentage of the interest paid per month, a pcrcentag2 per month of the
declining balance of the loan or a flat dollar a~0Ul.t rcr. ~onth pcr loan,
whichever you prefer.
If you have any questions concerning thIs program please contact the
undersigned.
Sincerely yours,
Joseph R. McFate II
Housing Coordinator
r