We are continuing the expansion of our support for loans secured by a borrower’s ownership shares and lease in a cooperative unit (“cooperative loans”) by rolling-out support for HELOC cooperative loans for cooperative units located in California.
New Documents
Similar to what we have done for HELOCs in New York, we will be making HELOC-specific copies of some of our multistate cooperative documents for use in California. These new copies include the following:
- Cooperative Rider – HELOC (Cx22969)
- Assignment of Proprietary Lease – HELOC (Cx22970)
- Cooperative Loan Recognition Agreement – HELOC (Cx22971)
Each of these documents will be configured to print under the following conditions:
- Base Type = Conventional
- Cooperative = Yes
- Document Package Type = Closing
- HELOC = Yes
- Print Generic HELOC Security Instruments = Yes
- State Code = California
Please note that these documents are designed to be used with our generic HELOC Agreement (Cx21652), generic California HELOC Deed of Trust (Cx1362), and other generic HELOC documents. These new documents are not compatible with any custom HELOC documents (including agreements and security instruments).
Configuration Changes
We will be adding the condition “State Code = California” to the print configurations of the following documents:
- Affidavit of No Further Encumbrances – HELOC COOP (Cx22939)
- Irrevocable Stock Power – HELOC COOP (Cx22936)
- Notice of Assignment of Security Agreement – Managing Agent – HELOC COOP (Cx22940)
Document Edits
We will be making the following changes to the text within the following documents:
- HELOC Deed of Trust – CA (Cx1362)
- Removing the clause “either as a whole or in separate parcels” in Subparagraph 3(h) for California cooperative loans.
- Removing the clause “either as a whole or in separate parcels” in Subparagraph 3(h) for California cooperative loans.
- Second Home Rider – HELOC (Cx20384)
- Changing the phrase “Borrower’s Agreement” in the first paragraph to “Home Equity Credit Line Agreement and Disclosure Statement” for all cooperative loans.
- Changing the phrase “which is” in the first paragraph to “including a cooperative unit (as described in the Security Instrument)” for California cooperative loans.
- Adding the following sentence to the end of the paragraph entitled “Occupancy” for California cooperative loans:
“The clause ‘or if Trustor ceases to use the Property as Trustor’s primary residence’ within Subparagraph 3(f) of the Security Instrument is repealed.”
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- Adding the following sentence to the end of the paragraph entitled “Borrower’s Loan Application” for California cooperative loans:
“For purposes of this Paragraph, ‘Loan’ means the debt evidenced by the Home Equity Credit Line Agreement and Disclosure Statement, plus interest, any prepayment charges and late charges due thereunder, and all sums due under the Security Instrument, plus interest.”
- 1-4 Family Rider – HELOC (Cx20387)
- Modifying the phrase “Borrower’s Agreement” in the first paragraph to state “Home Equity Credit Line Agreement and Disclosure Statement” for all cooperative loans.
- Changing the clause “Property described in the Security Instrument and located at:” in the first paragraph to “Property described in the Security Instrument, including a cooperative unit (as described in the security Instrument) located at:” for California cooperative loans.
- Changing the paragraph entitled “Rent Loss Insurance” to state “Borrower shall maintain insurance against rent loss in addition to any other insurance required by the Security Instrument” for California and New York cooperative loans.
- Removing the paragraph entitled “’Borrower’s Right to Reinstate’ Deleted” for California and New York cooperative loans, since this paragraph does not appear in the security instrument or agreement used in these two states.
- Adding the following clause to the end of the first sentence in the paragraph entitled “Assignment of Leases” for California junior lien cooperative loans:
“unless a Superior Lienholder (as described in the Security Instrument) is entitled to these leases and security deposits pursuant to the terms of a previously executed security agreement.”
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- Adding the following clause to the end of the first sentence in the paragraph entitled “Assignment of Rents; Appointment of Receiver; Lender in Possession” for California junior lien cooperative loans:
“unless a Superior Lienholder (as described in the Security Instrument) is entitled to the Rents pursuant to the terms of a previously executed security agreement, in which event this Section [X] does not apply, except for the last paragraph.”
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- Modifying Clause (i) in the paragraph entitled “Assignment of Rents; Appointment of Receiver; Lender in Possession” to state “Lender has given Borrower a notice of default” for California cooperative loans.
- Removing the second to last paragraph within the paragraph entitled “Assignment of Rents; Appointment of Receiver; Lender in Possession” for all junior lien cooperative loans.
- Adding a new paragraph entitled “Paragraphs Concerning Rents Deleted” which states that “Subparagraph 3(e) of the Security Instrument is deleted” for California cooperative loans.
- HELOC Agreement (Cx21652)
- Changing the phrase “real property” to “property” in Definition 1(L) for all cooperative loans.
- Changing the clause “in the Property located at:” in the fourth paragraph of Paragraph 2 to state “in the property described in such security instrument, including rights to a lease in a cooperative unit located at:” for California cooperative loans.
- Cooperative Rider (Cx22969)
- Removing Subparagraph B(i) for California cooperative loans and re-lettering subsequent subparagraphs.
- Removing the paragraph entitled “Assignment of Rents” for California cooperative loans (substantially similar provisions already appear in our generic California HELOC deed of trust).
- Changing cross-references to the security instrument throughout the document to refer to substantially similar provisions which appear in our generic California HELOC deed of trust.
- Assignment of Proprietary Lease – HELOC (Cx22970)
- Changing the clause “promissory note or notes (collectively and individually referred to as ‘Note’)” within the second paragraph to “home equity credit line agreement or agreements (collectively and individually referred to as ‘Agreement’)”.
- Changing the clause “original principal amount(s)” within the second paragraph to “maximum line(s) of credit”.
- Changing the word “Note” to “Agreement” in the last paragraph.
- Multistate Loan Recognition Agreement (Cx22971)
- Changing the phrase “loan (the ‘Loan’)” in the third paragraph to state “home equity line of credit (the ‘Loan’) with a line of credit”.
- Changing the phrase “loan (the ‘Loan’)” in the third paragraph to state “home equity line of credit (the ‘Loan’) with a line of credit”.
Effective Date
These changes will take effect on February 28, 2019. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
DR 283362