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HomeMy WebLinkAboutR-2004-121 Escrow Pacific Contract (re: loan portfolio)RESOLUTION NO. R-2004-- 121 A RESOLUTION Authorizing the City Manager to enter into an escrow services contract with Escrow Pacific to service the ONDS loan portfolio. WHEREAS, the City of Yakima is an annual recipient of Community Development Block Grant (CDBG) and HOME funds from the Federal Government; and WHEREAS, the City has been the recipient of such funds for 30 years; and WHEREAS, during this time the City, through the Office of Neighborhood Development Services (ONDS) as directed by the Yakima City Council has made loans to City homebuyers and homeowners, for the purchase or renovation of homes located within the City of Yakima; and WHEREAS, these loans require regular servicing by professional escrow officers to maintain proper records of payments and manage impound accounts for the payment of property taxes and insurance; and WHEREAS, the Yakima City Council has previously determined that it is in the best interest of the City and its loan clients to contract with an outside entity for such services; and WHEREAS, City staff have determined that it is the best interest of the City and its loan clients that a change be made in the company that provides these services; and WHEREAS, after careful investigation City staff have determined that such services should now be provided by Escrow Pacific, LLC, whose place of business is 311 North Fourth Street, Suite 201, Yakima, WA 98907, now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: 1. Escrow Pacific, LLC of Yakima is hereby selected to provide escrow services for the ONDS loan portfolio. 2. These services will include, but not be limited to such items as receipt of loan payments, maintenance of impound accounts, disbursement of funds for the payment of property taxes and insurance, and maintenance of records for such transactions. 3. The City Manager is hereby authorized to enter into a contract for services with Escrow pacific, and sign all documents necessary to complete this contract. 4. ADOPTED BY THE CITY COUNCIL this 3rd day of August, 2004 ATTEST: CITY CLERK ESCROW COLLECTION AGREEMENT PARTIES: Escrow Pacific, LLC, a Washington limited liability company, referred to herein as "Servicer" The City of Yakima, Washington, a Washington municipal corporation, referred to herein as "Recipient" The following person(s), referred to herein as "Payor" Name Address City, State, Zip Telephone Social Security Number RECITALS: Whereas Recipient, through its Office of Neighborhood Development Services, regularly loans secured funds to persons consistent with its mission of assisting in the provision of affordable housing within the City of Yakima; Whereas the loans associated with these funds are secured by appropriate real property security instruments, commonly a mortgage or deed of trust, to provide for repayment by Payor of funds provided by Recipient; Whereas it is essential for the interests of Payor and Recipient that accurate recordkeeping be associated with the loan, and that certain necessary and ordinary expenses commonly associated with the collateral for said loans (including but not limited to payment of insurance and taxes) be processed by Servicer as provided for herein; and, Escrow Collection Agreement - 1 Whereas Servicer desires to perform these services for a fee as part of its ordinary course of business as a professional escrow company; NOW, THEREFORE, in consideration of the promises herein contained, the parties agree as follows: 1. Documents. Originals of the Collected Documents identified in the Documentation section of this Agreement are delivered to Servicer on behalf of Recipient, Payor, and their heirs, successors, assigns and representatives to be held in escrow pursuant to the terms and conditions of this Agreement. Delivery to Servicer is intended by Recipient and Payor to be irrevocable absent the express written agreement of Recipient and Payor, or unless otherwise provided herein, and evidences the intention of Recipient and Payor to part with all dominion and control of the Collected Documents. Said delivery shall survive the death, incompetency, disability, or other legal disability of Recipient and Payor. Recipient and Payor warrant to Servicer that they are the true parties to the Collected Documents and all rights thereunder, and have the authority to contract with Servicer for collection of payments under the obligation according to the terms and conditions of this Agreement. Upon acceptance of this Agreement, Servicer will notify Recipient and Payor in writing of its agreement to act as Servicer and that the payments being made pursuant to the Collected Documents shall be made to Servicer. 2. Delivery of Documents. When, according to the information in Servicer's possession, Payor has paid all sums required under the Collected Documents, and upon payment to Servicer of all sums then due Servicer, Servicer is authorized and instructed to deliver to Payor all Collected Documents held in escrow by it, to notify Recipient of said payment and delivery, and thereupon Servicer's duties hereunder shall terminate. Prior to any such termination, Servicer shall allow Recipient to verify its accounting of the total amounts paid by Payor pursuant to the Collected Documents. Servicer shall not be responsible for recording any documents. 3. Default/Termination/Return of Documents. in the event any default under the terms of the Collected Documents, including, but not limited to installment payments, remains uncured for a period of 120 days from due date, upon demand of Recipient or at election of Servicer, Servicer may deliver to Recipient or Recipient's order all Collected Documents then in Servicer's possession unless, before such demand is made, all defaults have been cured. If Recipient serves a Notice of Default on or commences a forfeiture, foreclosure or judicial action against Payor pursuant to the terms of the Collected Documents and applicable law, Servicer shall have no liability for accepting payments after commencement of any such action until Recipient has given notice thereof to Servicer. Servicer may terminate this agreement, with or without cause, on 30 days' written notice to the parties at their last known addresses. In such event, Servicer will return the Collected Documents to the Recipient, unless otherwise instructed in writing by both Recipient and Payor prior to the expiration of said 30 -day period. Escrow Collection Agreement - 2 4. Collection of Payments. Servicer is instructed to collect and disburse payments made pursuant to the Collected Documents. Servicer is instructed to accept all payments tendered by Payor, whether partial or full, and whether tendered before or after the due date of the payment, unless Servicer has received a copy of a Notice of Default issued by or on behalf of Recipient commencing a forfeiture, foreclosure or judicial action against Payor. For purposes of processing payments, it is understood that Saturdays, Sundays and federally - recognized holidays are not considered banking days. Payor shall pay to Servicer any collection costs incurred by Servicer. Servicer may charge Payor a processing fee for any dishonored item. Recipient agrees to reimburse Servicer promptly on demand for any funds transmitted by Servicer which are returned N.S.F. or otherwise not cleared. 5. Coupons/Payment Advices. Servicer will provide payment coupons to Payor for each payment unless Payor has set up an automatic bank withdrawal to make the required payments. Coupons are an accounting convenience only. If a discrepancy exists between the coupon and the Collected Documents, the terms of the Collected Documents prevail. Unless other arrangements are made between Servicer and Recipient, Servicer shall provide a payment advice to Recipient for each payment made. 6. Service Charges. Recipient agrees to pay Servicer for its collection services pursuant to this Agreement. Recipient shall receive a single monthly invoice detailing the previous month's provision of services under this Agreement and all similar Agreements that Servicer and Recipient may have in common at the time of invoice. Said invoice shall be paid in full by Recipient within 30 days after receipt of the same. If Payor is to pay the processing fee, the fee must be remitted in addition to Payor's regular payments. If Payor fails to remit said fees, the same will be deducted from the payments prior to their application to the amount due Recipient under the Collected Documents. The processing fee will be prorated for partial years, based on the annual fee assessment date used by Servicer. In addition to the processing fee, Servicer may charge for supplemental services rendered which were not contemplated by this Agreement, provided that the nature of any such services is first made known to the party to be charged. 7. Interest Computation, Payments for Taxes and Insurance, IRS forms. Unless the Collected Documents or applicable state law specifically provide otherwise, interest will be calculated using a 360 -day factor and 30 -day month. Payments will be applied first to any then -due taxes, assessments, or insurance premium payments, then to interest to bring the paid -to date current, then to principal, with the balance, if any, applied to late charges due under the Collected Documents. Servicer shall supply a 1098 tax form to Payor and a 1099 tax form to Recipient, as provided for by law or not later than January 3 1S` of each year of this Agreement. Interest earned by any party hereto will be reported to the IRS as provided for by law under Social Security Tax Identification Numbers provided. Servicer agrees to comply with the Federal Real Estate Settlement Procedures Act of 1974, as amended from time to time, 12 U.S.C. sec. 2601, et seq., in performing its obligations under this Agreement. 8. Account Modifications. A. If the Collected Documents provide for payment of real property taxes, Escrow Collection Agreement - 3 assessments or hazard insurance premiums by Payor, Servicer shall add any such amount to the balance of the payment then due, and shall notify Payor of such change, which notice by Servicer to Payor shall include a statement of the date and amount due of any such tax, assessment, or insurance premium payment which is to be added to the balance, or of the increase of monthly payment due under any such increase in taxes, assessments, or insurance premiums. B. If the Collected Documents contain a late charge provision, the account shall be set up so that Payor and Recipient automatically receive late notices if a payment is late. A late notice fee will be assessed only if a late notice is actually sent. Servicer shall track and assess late charges if provided for in the Collected Documents. C. Servicer shall not be bound by any change in beneficial interest, property ownership or other modification to the Collected Documents unless Servicer receives copies of legal documents supporting any such change at least ten (10) days in advance of said change and agrees to it in writing. D. Servicer shall provide to Recipient an account status statement not less often than monthly providing a detailed listing of any arrearages, defaults, or late payments of Payor by category and age of any such arrearage, default, or late payment and, not less often than annually, a comprehensive annual statement of balances remaining due under any obligation of Payor. 9. Disbursements. Servicer will make all disbursements to the named individuals and entities designated in the Disbursement Information Section. Changes to the disbursements will be made only by the written direction of Recipient. Irregular payments will be applied to the disbursements in the order and/or percentages listed in the Disbursement Information Section. 10. Accounting/Data Processing. Servicer shall retain the duty of actual collection of payments and accounting and data processing services necessary to fulfill the requirements of this Agreement. 11. Exclusions. Recipient and Payor specifically agree that Servicer is not bound by the terms of the Collected Documents, provided that Servicer's responsibilities are expressly limited to those set forth in this Agreement and any modifications made in compliance with Paragraphs 8 and 9. 12. Disputes. In the event of any dispute or conflicting demands from Payor or Recipient regarding this Agreement, Servicer shall have the right, in addition to any other legal remedies available to it, to do any or all of the following: A. Discontinue any acts or services under this Agreement until the dispute or conflicting instructions are resolved. B. Terminate this Agreement and return any documents held by Servicer to Escrow Collection Agreement - 4 Recipient, along with an accounting of the funds received. C. Commence an interpleader action in the appropriate court. Upon the filing of a suit in interpleader, Servicer shall be fully and completely absolved from all further obligations or liability under this Agreement. 13. Account Status. Servicer is authorized to furnish written beneficiary/payoff statements for the Collected Documents to any Payor or other person authorized by law to receive such statements and to charge the fee permitted by law for such statements, whether or not specifically provided for in the Collected Documents. 14. Relationship. Recipient and Payor understand and agree that Servicer has no authority, express or implied, to act as an agent for Recipient or Payor. Recipient and Payor further agree that neither Payor nor Recipient has any right or authority whatsoever to direct or control the actions of Servicer other than Servicer's limited undertakings as explicitly set forth in this Agreement. 15. Limited Responsibility. Servicer's obligations are expressly limited to those stated in this Agreement. Servicer will be responsible only for the exercise of ordinary care in crediting and transmitting the funds and documents received under this Agreement. Recipient and Payor agree to hold Servicer harmless from and against all costs, damages, losses, judgments, attorney's fees, expenses, obligations and liabilities of every kind and nature suffered or incurred by Recipient or Payor or arising out of this Agreement, except as the same may arise out of Servicer's failure to exercise ordinary care in crediting and transmitting funds and documents received. In no event shall Servicer be liable for consequential damages or responsible for any other action or omission except as may result from Servicer's failure to exercise ordinary care or any breach by Servicer of the terms of this Agreement 16. Successors and Assigns. This Agreement shall be binding on any successor of Servicer and any successor of Recipient and Payor and the Collected Documents. Servicer shall not assign any of its interests, obligations, or duties under this Agreement without Recipient's prior expressed written consent. 17. Venue and Attorneys Fees. This agreement shall be construed and interpreted in accordance with the laws of the State of Washington. Venue of any action arising from or related to this agreement shall lie in the Superior Court in and for Yakima County, Washington. In the event any of the parties hereto defaults in the performance of the terms and conditions of this Agreement, the defaulting party agrees to pay all costs, expenses and attorney's fees incurred by any non -defaulting party who brings any legal action as a result of such default. 18. Severability. In the event any provision of this Agreement shall be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired. Escrow Collection Agreement - 5 19. Bilingual Notices. Any notice called for under this Agreement to be provided to Payor, including as set forth in paragraphs 7, 8, and 13, shall, pursuant to forms to be provided to Servicer by Recipient, be provided to Payor by Servicer in both an English and Spanish version. 20. Entire Agreement. This Agreement constitutes the entire understanding of Servicer, Recipient and Payor. No verbal agreement or implied covenant shall be held to vary the provisions hereof, any statements, law or custom to the contrary notwithstanding. THE UNDERSIGNED STATE THEY HAVE READ AND FULLY UNDERSTAND THESE INSTRUCTIONS Dated: Payor: Dated: -s/ The The City of Yakima, Washington, a Washington municipal corporation B Its: city Manager Date Accepted: g ^ i 0-0 LI Escrow Pacific, LLC By: CITY CONTRACT NO ,2on-5-9- RESOLUTION NO: +e' '%l:1 -Sr -ha/ Escrow Collection Agreement - 6 Collected Documents The following documents are delivered to Escrow Pacific, LLC, along with these instructions, and are referred to herein as the "Collected Documents": Copy Original Copy Original Real Estate Contract dated: Other Deed dated: Other Promissory Note dated: Other Deed of Trust dated: Other Mortgage dated: Other Escrow Collection Agreement - 7 Disbursement Information Section Escrow Pacific LLC shall disburse the payment to the fnllnwing individuals or institutions (if institution, account number will be included) in the following order of priority: A. B. $ Amount $ Amount C. D. $ Amount $ Amount Escrow Collection Agreement - 8 Terms Balance of obligation: Payment: Annual interest rate: Payable: MQS A Interest to begin: Payment due date: Late charge amount (if any): Additional terms: Escrow Collection Agreement - 9 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. For 1V1eet11Lg Of August J, 2004 ITEM TITLE: Contract for Escrow Services to ONDS SUBMITTED BY: m Cook, CED Director n, Finance Director CONTACT PERSON/TELEPHONE: Bill Cobabe, Neighborhood Development Manager (509) 575-6101 The Office of Neighborhood Development Services has a portfolio of about 100 loans that were made over the years, primarily to homebuyers or recipients of rehabilitation loans. These loans require regular servicing for payments, collection of impound account funds for payment of taxes and insurance, etc. For several years this servicing has been handled through an escrow company, WestStar. It has been determined that it is now in the best interest of both the City and our loan clients that we make a change to a different servicing company. After careful investigation, we have selected a local company, Escrow Pacific, to assist us in managing the loan portfolio. A services contract has been drafted by our lawyer, and has been approved by ONDS and Escrow Pacific, as well as the City Finance Department. This item authorizes the City Manager to enter into a contract for escrow services with Escrow Pacific. If you have any questions please contact Bill Cobabe, ONDS Manager at 575-6101. Resolution X Ordinance Other (Specify) Contract Mail to (name and address): Phone: Funding Source ONDS: CDBCiaq HOME Fund APPROVED FOR SUBMITTAL: \ City Manager STAFF RECOMMENDATION: Approval BOARD/COMMISSION RECOMMENDATION: COUNCIL ACTION: Resolution adopted. RESOLUTION R-2004-121