Subordination Requirements

Subordination

Please email requests for Subordination Agreements to the CDC's Asset Management Unit.  CDC will not subordinate to refinancing a new first trust deed unless it is solely to lower the interest rate and reduce monthly payments, or to obtain financing for maintenance or repair of the property pre-approved by CDC.  Under no circumstances will CDC subordinate to a third position or subordinate to a new refinance first trust deed to pay off a third trust deed or debt consolidation.  Upon receipt of the request, we will e-mail back a list of conditions to the requestor including, but not limited to:

No. List of Conditions
1. Copy of the new signed application/1003 (all pages must be submitted) and 1008 Underwriting Summary.
2. Payoff Demand Statement for 1st Mortgage.
3. Signed letter from buyer stating reason for refinance.
4. Preliminary Title Report and any Supplementals as needed, as well as showing property taxes are current.
5. Copy of complete appraisal.
6. Certified estimated escrow settlement statement or certified estimated HUD 1.
7. Certified copy of new note outlining new terms and conditions.
8. Copy of Evidence of Insurance showing the Community Development Commission County of Los Angeles as 2nd mortgagee.
Loss Payee Clause:
Community Development Commission of the County of Los Angeles 700 W. Main Street, Alhambra, CA 91801.
9. Subordination Fee for $200.00 (non-refundable), check payable to the Community Development Commission of the County of Los Angeles.
10. After the file is approved, the borrower must attend a homeowner counseling session.
11. Copy of current 1st mortgage billing statement.
12. Borrower's authorization

 

Do not fax above items.  Overnight or regular mail only.

The CDC needs ten (10) working days, from the receipt of ALL the above items to review and approve your request for subordination.  Any items not listed above may be requested.

If the borrower currently holds an MCC Certificate, upon closing their refinance the Certificate will be void.

The CDC will evaluate requests for subordination on a case-by-case basis consistent with the interest of the CDC and the needs of the homeowner. 

Eligible home improvements are acceptable if reviewed and pre-approved by CDC and must be submitted signed by the homeowners and two licensed contractor's itemized agreement/contract. CDC eligible home improvements are code enforcement items (e.g. for plumbing, electrical, heating, roofing) and/or improvements requiring permits from the appropriate municipality building & safety department.

The Combined Loan-to-Value (CLTV) for Home Ownership loans may not exceed 80%.  The CLTV is calculated based on all existing liens.  Additional parties may not be added to title. Quitclaims may be acceptable if one of the original parties will remain in the property and a certified executed copy of the quitclaim deed is provided.  There are NO EXCEPTIONS.

CDC will allow maximum 3% for loan origination, financing of fees and costs.

Example: Total payoff loan is $195,000 + 3% = $200,850 (maximum new loan). In this case $5,850 would be allowed for loan origination, financing of fees, and costs.


Questions
Lynn Watkins
Lynn.Watkins@lacdc.org 

Lorena R. Ojeda
Lorena.Ojeda@lacdc.org

 

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