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Home My WebLink AboutDavid Armando Hamburger Hamburger and Maria Aracely Zapata Castrillon; 2024-08-09;(8) "Lender" is CrossCountry Mortgage, LLC. Lender is a Limited Liability Company, under the laws of Delaware. Cleveland, OH 44114. Lender's address is The term "Lender" includes any successors and assigns of Lender. {C) "Trustee" is Fidelity National Title Company. Trustee's address is 7565 Mission Valley Rd Ste 100, San Diego, CA 92108. The term "Trustee" includes any substitute/successor Trustee. LOAN #: 40502406356976 organized and existing 2160 Superior Avenue, {D) "MERS" is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as a nominee for Lender and Lender's successors and assigns. MERS is the beneficiary under this Security Instrument. MERS is organized and existing under the laws of Delaware, and has an address and telephone number of P.O. Box 2026, Flint, Ml 48501-2026, tel. (888) 679-MERS. Documents {E) "Note" means the promissory note dated August 9, 2024, and signed by each Borrower who is legally obligated for the debt under that promissory note, that is in either (i) paper form, using Borrower's written pen and ink signature, or (ii) electronic form, using Borrower's adopted Electronic Signature in accordance with the UETA or E-SIGN, as applicable. The Note evidences the legal obligation of each Borrower who signed the Note to pay Lender ONE HUNDRED SIXTY THOUSAND NINE HUNDRED FIFTEEN AND NO/100* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Dollars (U.S. $160,915.00 ) plus interest. Each Borrower who signed the Note has promised to pay this debt in regular monthly payments and to pay the debt in full not later than September 1, 2054. {F) "Riders" means all Riders to this Security Instrument that are signed by Borrower. All such Riders are incorporated into and deemed to be a part of this Security Instrument. The following Riders are to be signed by Borrower [check box as applicable]: D Adjustable Rate Rider l.J 1-4 Family Rider lJ Other(s) [specify] 00 Condominium Rider D Planned Unit Development Rider l.J Second Home Rider l.J V.A. Rider {G) "Security Instrument" means this document, which is dated August 9, 2024, this document. together with all Riders to Additional Definitions (H) "Applicable Law" means all controlling applicable federal, state, and local statutes, regulations, ordinances, and administrative rules and orders (that have the effect of law) as well as all applicable final, non-appealable judicial opinions. {I) "Community Association Dues, Fees, and Assessments" means all dues, fees, assessments, and other charges that are imposed on Borrower or the Property by a condominium association, homeowners association, or similar organization. {J) "Default" means: (i) the failure to pay any Periodic Payment or any other amount secured by this Security Instrument on the date it is due; (ii) a breach of any representation, warranty, covenant, obligation, or agreement in this Security Instrument; (iii) any materially false, misleading, or inaccurate information or statement to Lender provided by Borrower or any persons or entities acting at Borrower's direction or with Borrower's knowledge or consent, or failure to provide CALIFORNIA -Single Family-Fannie Mae/Freddie Mac UNIFORM INSTRUMENT (MERS) Form 3005 07/2021 ICE Mortgage Technology. Inc. Page 2 of 17 CA21 EDEDL 0222 CAEDEDL (CLS) 08/08/2024 02:05 PM PST LOAN #: 40502406356976 Lender with material information in connection with the Loan, as described in Section 8; or (iv) any action or proceeding described in Section 12(e). (K) "Electronic Fund Transfer" means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, computer, or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account. Such term includes, but is not limited to, point-of-sale transfers, automated teller machine transactions, transfers initiated by telephone or other electronic device capable of communicating with such financial institution, wire transfers, and automated clearinghouse transfers. (L) "Electronic Signature" means an "Electronic Signature" as defined in the UETA or E-SIGN, as applicable. (M) "E-SIGN" means the Electronic Signatures in Global and National Commerce Act (15 U.S.C. § 7001 et seq.), as it may be amended from time to time, or any applicable additional or successor legislation that governs the same subject matter. (N) "Escrow Items" means: (i) taxes and assessments and other items that can attain priority over this Security Instrument as a lien or encumbrance on the Property; (ii) leasehold payments or ground rents on the Property, if any; (iii) premiums for any and all insurance required by Lender under Section 5; (iv) Mortgage Insurance premiums, if any, or any sums payable by Borrower to Lender in lieu of the payment of Mortgage Insurance premiums in accordance with the provisions of Section 11; and (v) Community Association Dues, Fees, and Assessments if Lender requires that they be escrowed beginning at Loan closing or at any time during the Loan term. (0) "Loan" means the debt obligation evidenced by the Note, plus interest, any prepayment charges, costs, expenses, and late charges due under the Note, and all sums due under this Security Instrument, plus interest. (P) "Loan Servicer" means the entity that has the contractual right to receive Borrower's Periodic Payments and any other payments made by Borrower, and administers the Loan on behalf of Lender. Loan Servicer does not include a sub-servicer, which is an entity that may service the Loan on behalf of the Loan Servicer. (Q) "Miscellaneous Proceeds" means any compensation, settlement, award of damages, or proceeds paid by any third party (other than insurance proceeds paid under the coverages described in Section 5) for: (i) damage to, or destruction of, the Property; (ii) condemnation or other taking of all or any part of the Property; (iii) conveyance in lieu of condemna- tion; or (iv) misrepresentations of, or omissions as to, the value and/or condition of the Property. (R) "Mortgage Insurance" means insurance protecting Lender against the nonpayment of, or Default on, the Loan. (S) "Partial Payment" means any payment by Borrower, other than a voluntary prepayment permitted under the Note, which is less than a full outstanding Periodic Payment. (T) "Periodic Payment" means the regularly scheduled amount due for (i) principal and interest under the Note, plus (ii) any amounts under Section 3. (U) "Property" means the property described below under the heading "TRANSFER OF RIGHTS IN THE PROPERTY:' (V) "Rents" means all amounts received by or due Borrower in connection with the lease, use, and/or occupancy of the Property by a party other than Borrower. (W) "RESPA" means the Real Estate Settlement Procedures Act (12 U.S.C. § 2601 et seq.) and its implementing regu- lation, Regulation X (12 C.F.R. Part 1024), as they may be amended from time to time, or any additional or successor federal legislation or regulation that governs the same subject matter. When used in this Security Instrument, "RESPA'' refers to all requirements and restrictions that would apply to a "federally related mortgage loan" even if the Loan does not qualify as a "federally related mortgage loan" under RESPA. (X) "Successor in Interest of Borrower" means any party that has taken title to the Property, whether or not that party has assumed Borrower's obligations under the Note and/or this Security Instrument. (Y) "UETA" means the Uniform Electronic Transactions Act, as enacted by the jurisdiction in which the Property is located, as it may be amended from time to time, or any applicable additional or successor legislation that governs the same subject matter. TRANSFER OF RIGHTS IN THE PROPERTY The beneficiary of this Security Instrument is MERS (solely as nominee for Lender and Lender's successors and assigns) and the successors and assigns of MERS. This Security Instrument secures to Lender (i) the repayment of the Loan, and all renewals, extensions, and modifications of the Note, and (ii) the performance of Borrower's covenants and agreements CALIFORNIA -Single Family -Fannie Mae/Freddie Mac UNIFORM INSTRUMENT (MERS) Form 3005 07/2021 ICE Mortgage Technology, Inc. Page 3 of 17 CA21 EDEDL 0222 CAEDEDL (CLS) 08/08/2024 02:05 PM PST LOAN #: 40502406356976 under this Security Instrument and the Note. For this purpose, Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale, the following described property located in the County of San Diego: SEE LEGAL DESCRIPTION ATTACHED HERETO AND MADE A PART HEREOF AS "EXHIBIT A". APN #: 203-101-37-14 which currently has the address of 579 Laguna Drive, Carlsbad [Street] [City] California 92008 [Zip Code] ("Property Address"); TOGETHER WITH all the improvements now or subsequently erected on the property, including replacements and additions to the improvements on such property, all property rights, including, without limitation, all easements, appurte- nances, Rents, issues and profits thereof, royalties, mineral rights, oil or gas rights or profits, water rights, miscellaneous proceeds, insurance proceeds, and fixtures now or subsequently a part of the property. All of the foregoing is referred to in this Security Instrument as the "Property:· Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender's successors and assigns) has the right: to exercise any or all of those interests, includ- ing, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument. BORROWER REPRESENTS, WARRANTS, COVENANTS, AND AGREES that: (i) Borrower lawfully owns and possesses the Property conveyed in this Security Instrument in fee simple or lawfully has the right to use and occupy the Property under a leasehold estate; (ii) Borrower has the right to grant and convey the Property or Borrower's lease- hold interest in the Property; and (iii) the Property is unencumbered, and not subject to any other ownership interest in the Property, except for encumbrances and ownership interests of record. Borrower warrants generally the title to the Property and covenants and agrees to defend the title to the Property against all claims and demands, subject to any encumbrances and ownership interests of record as of Loan closing. THIS SECURITY INSTRUMENT combines uniform covenants for national use with limited variations and non-uniform covenants that reflect specific California state requirements to constitute a uniform security instrument covering real property. UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows: 1. Payment of Principal, Interest, Escrow Items, Prepayment Charges, and Late Charges. Borrower will pay each Periodic Payment when due. Borrower will also pay any prepayment charges and late charges due under the Note, and any other amounts due under this Security Instrument. Payments due under the Note and this Security Instrument must be made in U.S. currency. If any check or other instrument received by Lender as payment under the Note or this Security Instrument is returned to Lender unpaid, Lender may require that any or all subsequent pay- ments due under the Note and this Security Instrument be made in one or more of the following forms, as selected CALIFORNIA -Single Family -Fannie Mae/Freddie Mac UNIFORM INSTRUMENT (MERS) Form 3005 07/2021 ICE Mortgage Technology, Inc. Page 4 of 17 CA21 EDEDL 0222 CAEDEDL (CLS) 08/08/2024 02:05 PM PST LOAN #: 40502406356976 by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check, or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a U.S. federal agency, instrumentality, or entity; or (d) Electronic Fund Transfer. Payments are deemed received by Lender when received at the location designated in the Note or at such other location as may be designated by Lender in accordance with the notice provisions in Section 16. Lender may accept or return any Partial Payments in its sole discretion pursuant to Section 2. Any offset or claim that Borrower may have now or in the future against Lender will not relieve Borrower from making the full amount of all payments due under the Note and this Security Instrument or performing the covenants and agree- ments secured by this Security Instrument. 2. Acceptance and Application of Payments or Proceeds. (a) Acceptance and Application of Partial Payments. Lender may accept and either apply or hold in suspense Partial Payments in its sole discretion in accordance with this Section 2. Lender is not obligated to accept any Partial Pay- ments or to apply any Partial Payments at the time such payments are accepted, and also is not obligated to pay interest on such unapplied funds. Lender may hold such unapplied funds until Borrower makes payment sufficient to cover a full Periodic Payment, at which time the amount of the full Periodic Payment will be applied to the Loan. If Borrower does not make such a payment within a reasonable period of time, Lender will either apply such funds in accordance with this Section 2 or return them to Borrower. If not applied earlier, Partial Payments will be credited against the total amount due under the Loan in calculating the amount due in connection with any foreclosure proceeding, payoff request, loan modification, or reinstatement. Lender may accept any payment insufficient to bring the Loan current without waiver of any rights under this Security Instrument or prejudice to its rights to refuse such payments in the future. (b) Order of Application of Partial Payments and Periodic Payments. Except as otherwise described in this Section 2, if Lender applies a payment, such payment will be applied to each Periodic Payment in the order in which it became due, beginning with the oldest outstanding Periodic Payment, as follows: first to interest and then to principal due under the Note, and finally to Escrow Items. If all outstanding Periodic Payments then due are paid in full, any pay- ment amounts remaining may be applied to late charges and to any amounts then due under this Security Instrument. If all sums then due under the Note and this Security Instrument are paid in full, any remaining payment amount may be applied, in Lender's sole discretion, to a future Periodic Payment or to reduce the principal balance of the Note. If Lender receives a payment from Borrower in the amount of one or more Periodic Payments and the amount of any late charge due for a delinquent Periodic Payment, the payment may be applied to the delinquent payment and the late charge. When applying payments, Lender will apply such payments in accordance with Applicable Law. (c) Voluntary Prepayments. Voluntary prepayments will be applied as described in the Note. (d) No Change to Payment Schedule. Any application of payments, insurance proceeds, or Miscellaneous Pro- ceeds to principal due under the Note will not extend or postpone the due date, or change the amount, of the Periodic Payments. 3. Funds for Escrow Items. (a) Escrow Requirement; Escrow Items. Borrower must pay to Lender on the day Periodic Payments are due under the Note, until the Note is paid in full, a sum of money to provide for payment of amounts due for all Escrow Items (the "Funds"). The amount of the Funds required to be paid each month may change during the term of the Loan. Borrower must promptly furnish to Lender all notices or invoices of amounts to be paid under this Section 3. (b) Payment of Funds; Waiver. Borrower must pay Lender the Funds for Escrow Items unless Lender waives this obligation in writing, or unless prohibited by Applicable Law. Lender may waive this obligation for any Escrow Item at any time. In the event of such waiver or prohibition, Borrower must pay directly, when and where payable, the amounts due for any Escrow Items and Lender may require Borrower to provide proof of direct payment of those items within such time period as Lender may require. Borrower's obligation to make such timely payments and to provide proof of payment is deemed to be a covenant and agreement of Borrower under this Security Instrument. If Borrower is obligated to pay Escrow Items directly, and Borrower fails to pay timely the amount due for an Escrow Item, Lender may exercise its rights under Section 9 to pay such amount and Borrower will be obligated to repay to Lender any such amount in accordance with Section 9. Unless prohibited by Applicable Law, Lender may withdraw the waiver as to any or all Escrow Items at any time by giving a notice in accordance with Section 16; upon such withdrawal, Borrower must pay to Lender all Funds for such Escrow Items, and in such amounts, that are then required under this Section 3. CALIFORNIA -Single Family -Fannie Mae/Freddie Mac UNIFORM INSTRUMENT (MERS) Form 3005 07/2021 ICE Mortgage Technology, Inc. Page 5 of 17 CA21 EDEDL 0222 CAEDEDL (CLS) 08/08/2024 02:05 PM PST LOAN #: 40502406356976 (c) Amount of Funds; Application of Funds. Lender may, at any time, collect and hold Funds in an amount up to, but not in excess of, the maximum amount a lender can require under RES PA. Lender will estimate the amount of Funds due in accordance with Applicable Law. The Funds will be held in an institution whose deposits are insured by a U.S. federal agency, instrumentality, or entity (including Lender, if Lender is an institution whose deposits are so insured) or in any Federal Home Loan Bank. Lender will apply the Funds to pay the Escrow Items no later than the time specified under RESPA. Lender may not charge Borrower for: (i) holding and applying the Funds; (ii) annually analyzing the escrow account; or (iii) verifying the Escrow Items, unless Lender pays Borrower interest on the Funds and Applicable Law permits Lender to make such a charge. Unless Lender and Borrower agree in writing or Applicable Law requires interest to be paid on the Funds, Lender will not be required to pay Borrower any interest or earnings on the Funds. Lender will give to Borrower, without charge, an annual accounting of the Funds as required by RESPA. (d) Surplus; Shortage and Deficiency of Funds. In accordance with RESPA, if there is a surplus of Funds held in escrow, Lender will account to Borrower for such surplus. If Borrower's Periodic Payment is delinquent by more than 30 days, Lender may retain the surplus in the escrow account for the payment of the Escrow Items. If there is a shortage or deficiency of Funds held in escrow, Lender will notify Borrower and Borrower will pay to Lender the amount necessary to make up the shortage or deficiency in accordance with RESPA. Upon payment in full of all sums secured by this Security Instrument, Lender will promptly refund to Borrower any Funds held by Lender. 4. Charges; Liens. Borrower must pay (a) all taxes, assessments, charges, fines, and impositions attributable to the Property which have priority or may attain priority over this Security Instrument, (b) leasehold payments or ground rents on the Property, if any, and (c) Community Association Dues, Fees, and Assessments, if any. If any of these items are Escrow Items, Borrower will pay them in the manner provided in Section 3. Borrower must promptly discharge any lien that has priority or may attain priority over this Security Instrument unless Borrower: (aa) agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender, but only so long as Borrower is performing under such agreement; (bb) contests the lien in good faith by, or defends against enforcement of the lien in, legal proceedings which Lender determines, in its sole discretion, operate to prevent the enforcement of the lien while those proceedings are pending, but only until such proceedings are concluded; or (cc) secures from the holder of the lien an agreement satisfactory to Lender that subordinates the lien to this Security Instrument (collectively, the "Required Actions"). If Lender determines that any part of the Property is subject to a lien that has priority or may attain priority over this Security Instrument and Borrower has not taken any of the Required Actions in regard to such lien, Lender may give Borrower a notice identifying the lien. Within 10 days after the date on which that notice is given, Borrower must satisfy the lien or take one or more of the Required Actions. 5. Property Insurance. (a) Insurance Requirement; Coverages. Borrower must keep the improvements now existing or subsequently erected on the Property insured against loss by fire, hazards included within the term "extended coverage," and any other hazards including, but not limited to, earthquakes, winds, and floods, for which Lender requires insurance. Borrower must maintain the types of insurance Lender requires in the amounts (including deductible levels) and for the periods that Lender requires. What Lender requires pursuant to the preceding sentences can change during the term of the Loan, and may exceed any minimum coverage required by Applicable Law. Borrower may choose the insurance carrier providing the insurance, subject to Lender's right to disapprove Borrower's choice, which right will not be exercised unreasonably. (b) Failure to Maintain Insurance. If Lender has a reasonable basis to believe that Borrower has failed to maintain any of the required insurance coverages described above, Lender may obtain insurance coverage, at Lender's option and at Borrower's expense. Unless required by Applicable Law, Lender is under no obligation to advance premiums for, or to seek to reinstate, any prior lapsed coverage obtained by Borrower. Lender is under no obligation to purchase any particular type or amount of coverage and may select the provider of such insurance in its sole discretion. Before purchas- ing such coverage, Lender will notify Borrower if required to do so under Applicable Law. Any such coverage will insure Lender, but might not protect Borrower, Borrower's equity in the Property, or the contents of the Property, against any risk, hazard, or liability and might provide greater or lesser coverage than was previously in effect, but not exceeding the coverage required under Section 5(a). Borrower acknowledges that the cost of the insurance coverage so obtained may significantly exceed the cost of insurance that Borrower could have obtained. Any amounts disbursed by Lender for costs associated with reinstating Borrower's insurance policy or with placing new insurance under this Section 5 will become CALIFORNIA -Single Family -Fannie Mae/Freddie Mac UNIFORM INSTRUMENT (MERS) Form 3005 07/2021 ICE Mortgage Technology, Inc. Page 6 of 17 CA21 EDEDL 0222 CAEDEDL (CLS) 08/08/2024 02:05 PM PST LOAN #: 40502406356976 additional debt of Borrower secured by this Security Instrument. These amounts will bear interest at the Note rate from the date of disbursement and will be payable, with such interest, upon notice from Lender to Borrower requesting payment. (c) Insurance Policies. All insurance policies required by Lender and renewals of such policies: (i) will be subject to Lender's right to disapprove such policies; (ii) must include a standard mortgage clause; and (iii) must name Lender as mortgagee and/or as an additional loss payee, and Borrower further agrees to generally assign rights to insurance proceeds to the holder of the Note up to the amount of the outstanding loan balance. Lender will have the right to hold the policies and renewal certificates. If Lender requires, Borrower will promptly give to Lender proof of paid premiums and renewal notices. If Borrower obtains any form of insurance coverage, not otherwise required by Lender, for damage to, or destruction of, the Property, such policy must include a standard mortgage clause and must name Lender as mortgagee and/or as an additional loss payee, and Borrower further agrees to generally assign rights to insurance proceeds to the holder of the Note up to the amount of the outstanding loan balance. (d) Proof of Loss; Application of Proceeds. In the event of loss, Borrower must give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower. Any insurance proceeds, whether or not the underlying insurance was required by Lender, will be applied to restoration or repair of the Property, if Lender deems the restoration or repair to be economically feasible and determines that Lender's security will not be lessened by such restoration or repair. If the Property is to be repaired or restored, Lender will disburse from the insurance proceeds any initial amounts that are necessary to begin the repair or restoration, subject to any restrictions applicable to Lender. During the subsequent repair and restoration period, Lender will have the right to hold such insurance proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction (which may include satisfying Lender's minimum eligibility requirements for persons repairing the Property, including, but not limited to, licensing, bond, and insurance requirements) provided that such inspection must be undertaken promptly. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed, depend- ing on the size of the repair or restoration, the terms of the repair agreement, and whether Borrower is in Default on the Loan. Lender may make such disbursements directly to Borrower, to the person repairing or restoring the Property, or payable jointly to both. Lender will not be required to pay Borrower any interest or earnings on such insurance proceeds unless Lender and Borrower agree in writing or Applicable Law requires otherwise. Fees for public adjusters, or other third parties, retained by Borrower will not be paid out of the insurance proceeds and will be the sole obligation of Borrower. If, in accordance with Applicable Law, Lender deems the restoration or repair not to be economically feasible or Lender's security would be lessened by such restoration or repair, the insurance proceeds will be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. Such insurance proceeds will be applied in the order that Partial Payments are applied in Section 2(b). (e) Insurance Settlements; Assignment of Proceeds. If Borrower abandons the Property, Lender may file, negoti- ate, and settle any available insurance claim and related matters. If Borrower does not respond within 30 days to a notice from Lender that the insurance carrier has offered to settle a claim, then Lender may negotiate and settle the claim. The 30-day period will begin when the notice is given. In either event, or if Lender acquires the Property under Section 26 or otherwise, Borrower is unconditionally assigning to Lender (i) Borrower's rights to any insurance proceeds in an amount not to exceed the amounts unpaid under the Note and this Security Instrument, and (ii) any other of Borrower's rights (other than the right to any refund of unearned premiums paid by Borrower) under all insurance policies covering the Property, to the extent that such rights are applicable to the coverage of the Property. If Lender files, negotiates, or settles a claim, Borrower agrees that any insurance proceeds may be made payable directly to Lender without the need to include Borrower as an additional loss payee. Lender may use the insurance proceeds either to repair or restore the Property (as provided in Section 5(d)) or to pay amounts unpaid under the Note or this Security Instrument, whether or not then due, in accordance with Applicable Law. 6. Occupancy. Borrower must occupy, establish, and use the Property as Borrower's principal residence within 60 days after the execution of this Security Instrument and must continue to occupy the Property as Borrower's principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent will not be unreasonably withheld, or unless extenuating circumstances exist that are beyond Borrower's control. 7. Preservation, Maintenance, and Protection of the Property; Inspections. Borrower will not destroy, dam- age, or impair the Property, allow the Property to deteriorate, or commit waste on the Property. Whether or not Borrower is residing in the Property, Borrower must maintain the Property in order to prevent the Property from deteriorating or CALIFORNIA -Single Family -Fannie Mae!Freddie Mac UNIFORM INSTRUMENT (MERS) Form 3005 07/2021 ICE Mortgage Technology, Inc. Page 7 of 17 CA21 EDEDL 0222 CAEDEDL (CLS) 08/08/2024 02:05 PM PST LOAN #: 40502406356976 decreasing in value due to its condition. Unless Lender determines pursuant to Section 5 that repair or restoration is not economically feasible, Borrower will promptly repair the Property if damaged to avoid further deterioration or damage. If insurance or condemnation proceeds are paid to Lender in connection with damage to, or the taking of, the Property, Borrower will be responsible for repairing or restoring the Property only if Lender has released proceeds for such purposes. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed, depending on the size of the repair or restoration, the terms of the repair agreement, and whether Borrower is in Default on the Loan. Lender may make such disbursements directly to Borrower, to the person repairing or restoring the Property, or payable jointly to both. If the insurance or condemnation proceeds are not sufficient to repair or restore the Property, Borrower remains obligated to complete such repair or restoration. Lender may make reasonable entries upon and inspections of the Property. If Lender has reasonable cause, Lender may inspect the interior of the improvements on the Property. Lender will give Borrower notice at the time of or prior to such an interior inspection specifying such reasonable cause. 8. Borrower's Loan Application. Borrower will be in Default if, during the Loan application process, Borrower or any persons or entities acting at Borrower's direction or with Borrower's knowledge or consent gave materially false, misleading, or inaccurate information or statements to Lender (or failed to provide Lender with material information) in connection with the Loan, including, but not limited to, overstating Borrower's income or assets, understating or failing to provide documentation of Borrower's debt obligations and liabilities, and misrepresenting Borrower's occupancy or intended occupancy of the Property as Borrower's principal residence. 9. Protection of Lender's Interest in the Property and Rights Under this Security Instrument. (a) Protection of Lender's Interest. If: (i) Borrower fails to perform the covenants and agreements contained in this Security Instrument; (ii) there is a legal proceeding or government order that might significantly affect Lender's interest in the Property and/or rights under this Security Instrument (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture, for enforcement of a lien that has priority or may attain priority over this Security Instrument, or to enforce laws or regulations); or (iii) Lender reasonably believes that Borrower has abandoned the Property, then Lender may do and pay for whatever is reasonable or appropriate to protect Lender's interest in the Property and/or rights under this Security Instrument, including protecting and/or assessing the value of the Property, and securing and/or repairing the Property. Lender's actions may include, but are not limited to: (I) paying any sums secured by a lien that has priority or may attain priority over this Security Instrument; (II) appearing in court; and (111) paying: (A) reasonable attorneys' fees and costs; (B) property inspection and valuation fees; and (C) other fees incurred for the purpose of protecting Lender's interest in the Property and/or rights under this Security Instrument, including its secured position in a bankruptcy pro- ceeding. Securing the Property includes, but is not limited to, exterior and interior inspections of the Property, entering the Property to make repairs, changing locks, replacing or boarding up doors and windows, draining water from pipes, eliminating building or other code violations or dangerous conditions, and having utilities turned on or off. Although Lender may take action under this Section 9, Lender is not required to do so and is not under any duty or obligation to do so. Lender will not be liable for not taking any or all actions authorized under this Section 9. (b) Avoiding Foreclosure; Mitigating Losses. If Borrower is in Default, Lender may work with Borrower to avoid foreclosure and/or mitigate Lender's potential losses, but is not obligated to do so unless required by Applicable Law. Lender may take reasonable actions to evaluate Borrower for available alternatives to foreclosure, including, but not limited to, obtaining credit reports, title reports, title insurance, property valuations, subordination agreements, and third-party approvals. Borrower authorizes and consents to these actions. Any costs associated with such loss mitigation activities may be paid by Lender and recovered from Borrower as described below in Section 9(c), unless prohibited by Applicable Law. (c) Additional Amounts Secured. Any amounts disbursed by Lender under this Section 9 will become additional debt of Borrower secured by this Security Instrument. These amounts may bear interest at the Note rate from the date of disbursement and will be payable, with such interest, upon notice from Lender to Borrower requesting payment. (d) Leasehold Terms. If this Security Instrument is on a leasehold, Borrower will comply with all the provisions of the lease. Borrower will not surrender the leasehold estate and interests conveyed or terminate or cancel the ground lease. Borrower will not, without the express written consent of Lender, alter or amend the ground lease. If Borrower acquires fee title to the Property, the leasehold and the fee title will not merge unless Lender agrees to the merger in writing. 10. Assignment of Rents. (a) Assignment of Rents. If the Property is leased to, used by, or occupied by a third party ("Tenant"), Borrower is unconditionally assigning and transferring to Lender any Rents, regardless of to whom the Rents are payable. This CALIFORNIA -Single Family -Fannie Mae/Freddie Mac UNIFORM INSTRUMENT (MERS) Form 3005 07/2021 ICE Mortgage Technology, Inc. Page 8 of 17 CA21 EDEDL 0222 CAEDEDL (CLS) 08/08/2024 02:05 PM PST LOAN #: 40502406356976 assignment of Rents constitutes a perfected, absolute and present assignment. Lender grants to Borrower a license to collect, but not prior to accrual, and retain the Rents; however, upon the occurrence and during the continuance of an event of Default, Borrower's license to collect and retain the Rents will immediately terminate. Under this license, Borrower will receive the Rents until (i) Lender has given Borrower notice of Default pursuant to Section 26, and (ii) Lender has given notice to the Tenant that the Rents are to be paid to Lender. This Section 10 constitutes an absolute assignment and not an assignment for additional security only. (b) Notice of Default. If Lender gives notice of Default to Borrower, all of the following will apply, unless prohibited by Applicable Law: (i) all Rents received by Borrower must be held by Borrower as trustee for the benefit of Lender only, to be applied to the sums secured by the Security Instrument; (ii) Lender will be entitled to collect and receive all of the Rents; (iii) Borrower agrees to instruct each Tenant that Tenant is to pay all Rents due and unpaid to Lender upon Lender's writ- ten demand to the Tenant; (iv) Borrower will ensure that each Tenant pays all Rents due to Lender and will take whatever action is necessary to collect such Rents if not paid to Lender; (v) unless Applicable Law provides otherwise, all Rents collected by Lender will be applied first to the costs of taking control of and managing the Property and collecting the Rents, including, but not limited to, reasonable attorneys' fees and costs, receiver's fees, premiums on receiver's bonds, repair and maintenance costs, insurance premiums, taxes, assessments, and other charges on the Property, and then to any other sums secured by this Security Instrument; (vi) Lender, or any judicially appointed receiver, will be liable to account for only those Rents actually received; and (vii) Lender will be entitled to have a receiver appointed to take pos- session of and manage the Property and collect the Rents and profits derived from the Property without any showing as to the inadequacy of the Property as security. (c) Funds Paid by Lender. If the Rents are not sufficient to cover the costs of taking control of and managing the Property and of collecting the Rents, any funds paid by Lender for such purposes will become indebtedness of Borrower to Lender secured by this Security Instrument pursuant to Section 9. (d) Limitation on Collection of Rents. Borrower may not collect any of the Rents more than one month in advance of the time when the Rents become due, except for security or similar deposits. (e) No Other Assignment of Rents. Borrower represents, warrants, covenants, and agrees that Borrower has not signed any prior assignment of the Rents, will not make any further assignment of the Rents, and has not performed, and will not perform, any act that could prevent Lender from exercising its rights under this Security Instrument. (f) Control and Maintenance of the Property. Unless required by Applicable Law, Lender, or a receiver appointed under Applicable Law, is not obligated to enter upon, take control of, or maintain the Property before or after giving notice of Default to Borrower. However, Lender, or a receiver appointed under Applicable Law, may do so at any time when Borrower is in Default, subject to Applicable Law. (g) Additional Provisions. Any application of the Rents will not cure or waive any Default or invalidate any other right or remedy of Lender. This Section 10 does not relieve Borrower of Borrower's obligations under Section 6. This Section 10 will terminate when all the sums secured by this Security Instrument are paid in full. 11. Mortgage Insurance. (a) Payment of Premiums; Substitution of Policy; Loss Reserve; Protection of Lender. If Lender required Mortgage Insurance as a condition of making the Loan, Borrower will pay the premiums required to maintain the Mortgage Insurance in effect. If Borrower was required to make separately designated payments toward the premiums for Mortgage Insurance, and (i) the Mortgage Insurance coverage required by Lender ceases for any reason to be available from the mortgage insurer that previously provided such insurance, or (ii) Lender determines in its sole discretion that such mortgage insurer is no longer eligible to provide the Mortgage Insurance coverage required by Lender, Borrower will pay the premiums required to obtain coverage substantially equivalent to the Mortgage Insurance previously in effect, at a cost substantially equivalent to the cost to Borrower of the Mortgage Insurance previously in effect, from an alternate mortgage insurer selected by Lender. If substantially equivalent Mortgage Insurance coverage is not available, Borrower will continue to pay to Lender the amount of the separately designated payments that were due when the insurance coverage ceased to be in effect. Lender will accept, use, and retain these payments as a non-refundable loss reserve in lieu of Mortgage Insurance. Such loss reserve will be non-refundable, even when the Loan is paid in full, and Lender will not be required to pay Borrower any interest or earnings on such loss reserve, unless required by Applicable Law. Lender will no longer require loss reserve payments if Mortgage Insurance coverage (in the amount and for the period that Lender requires) provided by an insurer selected by Lender again becomes available, is obtained, and Lender requires separately designated payments toward the premiums for Mortgage Insurance. CALIFORNIA -Single Family -Fannie Mae/Freddie Mac UNIFORM INSTRUMENT (MERS) Form 3005 07/2021 ICE Mortgage Technology, Inc. Page 9 of 17 CA21 EDEDL 0222 CAEDEDL (CLS) 08/08/2024 02:05 PM PST - LOAN #: 40502406356976 If Lender required Mortgage Insurance as a condition of making the Loan and Borrower was required to make sepa- rately designated payments toward the premiums for Mortgage Insurance, Borrower will pay the premiums required to maintain Mortgage Insurance in effect, or to provide a non-refundable loss reserve, until Lender's requirement for Mortgage Insurance ends in accordance with any written agreement between Borrower and Lender providing for such termination or until termination is required by Applicable Law. Nothing in this Section 11 affects Borrower's obligation to pay interest at the Note rate. (b) Mortgage Insurance Agreements. Mortgage Insurance reimburses Lender for certain losses Lender may incur if Borrower does not repay the Loan as agreed. Borrower is not a party to the Mortgage Insurance policy or coverage. Mortgage insurers evaluate their total risk on all such insurance in force from time to time, and may enter into agree- ments with other parties that share or modify their risk, or reduce losses. These agreements may require the mortgage insurer to make payments using any source of funds that the mortgage insurer may have available (which may include funds obtained from Mortgage Insurance premiums). As a result of these agreements, Lender, another insurer, any reinsurer, any other entity, or any affiliate of any of the foregoing, may receive (directly or indirectly) amounts that derive from (or might be characterized as) a portion of Bor- rower's payments for Mortgage Insurance, in exchange for sharing or modifying the mortgage insurer's risk, or reducing losses. Any such agreements will not: (i) affect the amounts that Borrower has agreed to pay for Mortgage Insurance, or any other terms of the Loan; (ii) increase the amount Borrower will owe for Mortgage Insurance; (iii) entitle Borrower to any refund; or (iv) affect the rights Borrower has, if any, with respect to the Mortgage Insurance under the Homeowners Protection Act of 1998 (12 U.S.C. § 4901 et seq.), as it may be amended from time to time, or any additional or successor federal legislation or regulation that governs the same subject matter ("HPA''). These rights under the HPA may include the right to receive certain disclosures, to request and obtain cancellation of the Mortgage Insurance, to have the Mortgage Insurance terminated automatically, and/or to receive a refund of any Mortgage Insurance premiums that were unearned at the time of such cancellation or termination. 12. Assignment and Application of Miscellaneous Proceeds; Forfeiture. (a) Assignment of Miscellaneous Proceeds. Borrower is unconditionally assigning the right to receive ~II Miscel- laneous Proceeds to Lender and agrees that such amounts will be paid to Lender. (b) Application of Miscellaneous Proceeds upon Damage to Property. If the Property is damaged, any Miscel- laneous Proceeds will be applied to restoration or repair of the Property, if Lender deems the restoration or repair to be economically feasible and Lender's security will not be lessened by such restoration or repair. During such repair and restoration period, Lender will have the right to hold such Miscellaneous Proceeds until Lender has had an opportunity to inspect the Property to ensure the work has been completed to Lender's satisfaction (which may include satisfying Lender's minimum eligibility requirements for persons repairing the Property, including, but not limited to, licensing, bond, and insurance requirements) provided that such inspection must be undertaken promptly. Lender may pay for the repairs and restoration in a single disbursement or in a series of progress payments as the work is completed, depending on the size of the repair or restoration, the terms of the repair agreement, and whether Borrower is in Default on the Loan. Lender may make such disbursements directly to Borrower, to the person repairing or restoring the Property, or payable jointly to both. Unless Lender and Borrower agree in writing or Applicable Law requires interest to be paid on such Miscellaneous Proceeds, Lender will not be required to pay Borrower any interest or earnings on such Miscellaneous Proceeds. If Lender deems the restoration or repair not to be economically feasible or Lender's security would be lessened by such restoration or repair, the Miscellaneous Proceeds will be applied to the sums secured by this Security Instrument, whether or not then due, unless prohibited by Applicable Law, with the excess, if any, paid to Borrower. Such Miscellaneous Proceeds will be applied in the order that Partial Payments are applied in Section 2(b). (c) Application of Miscellaneous Proceeds upon Condemnation, Destruction, or Loss in Value of the Property. In the event of a total taking, destruction, or loss in value of the Property, all of the Miscellaneous Proceeds will be applied to the sums secured by this Security Instrument, whether or not then due, unless prohibited by Applicable Law, with the excess, if any, paid to Borrower. In the event of a partial taking, destruction, or loss in value of the Property (each, a "Partial Devaluation") where the fair market value of the Property immediately before the Partial Devaluation is equal to or greater than the amount of the sums secured by this Security Instrument immediately before the Partial Devaluation, a percentage of the Mis- cellaneous Proceeds will be applied to the sums secured by this Security Instrument, unless prohibited by Applicable Law, or unless Borrower and Lender otherwise agree in writing. The amount of the Miscellaneous Proceeds that will be CALIFORNIA -Single Family -Fannie Mae/Freddie Mac UNIFORM INSTRUMENT (MEAS) Form 3005 07/2021 ICE Mortgage Technology, Inc. Page 1 O of 17 - CA21 EDEDL 0222 CAEDEDL (CLS) 08/08/2024 02:05 PM PST LOAN #: 40502406356976 so applied is determined by multiplying the total amount of the Miscellaneous Proceeds by a percentage calculated by taking (i) the total amount of the sums secured immediately before the Partial Devaluation, and dividing it by (ii) the fair market value of the Property immediately before the Partial Devaluation. Any balance of the Miscellaneous Proceeds will be paid to Borrower. In the event of a Partial Devaluation where the fair market value of the Property immediately before the Partial Devalu- ation is less than the amount of the sums secured immediately before the Partial Devaluation, all of the Miscellaneous Proceeds will be applied to the sums secured by this Security Instrument, whether or not the sums are then due, unless Borrower and Lender otherwise agree in writing. ( d) Settlement of Claims. Lender is authorized to collect and apply the Miscellaneous Proceeds either to the sums secured by this Security Instrument, whether or not then due, or to restoration or repair of the Property, if Borrower (i) abandons the Property, or (ii) fails to respond to Lender within 30 days after the date Lender notifies Borrower that the Opposing Party (as defined in the next sentence) offers to settle a claim for damages. "Opposing Party" means the third party that owes Borrower the Miscellaneous Proceeds or the party against whom Borrower has a right of action in regard to the Miscellaneous Proceeds. (e} Proceeding Affecting Lender's Interest in the Property. Borrower will be in Default if any action or proceed- ing begins, whether civil or criminal, that, in Lender's judgment, could result in forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument, unless prohibited by Applicable Law. Borrower can cure such a Default and, if acceleration has occurred, reinstate as provided in Section 20, by causing the action or proceeding to be dismissed with a ruling that, in Lender's judgment, precludes forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. Borrower is uncon- ditionally assigning to Lender the proceeds of any award or claim for damages that are attributable to the impairment of Lender's interest in the Property, which proceeds will be paid to Lender. All Miscellaneous Proceeds that are not applied to restoration or repair of the Property will be applied in the order that Partial Payments are applied in Section 2(b). 13. Borrower Not Released; Forbearance by Lender Not a Waiver. Borrower or any Successor in Interest of Bor- rower will not be released from liability under this Security Instrument if Lender extends the time for payment or modifies the amortization of the sums secured by this Security Instrument. Lender will not be required to commence proceedings against any Successor in Interest of Borrower, or to refuse to extend time for payment or ot~erwise modify amortization of the sums secured by this Security Instrument, by reason of any demand made by the original Borrower or any Successors in Interest of Borrower. Any forbearance by Lender in exercising any right or remedy including, without limitation, Lender's acceptance of payments from third persons, entities, or Successors in Interest of Borrower or in amounts less than the amount then due, will not be a waiver of, or preclude the exercise of, any right or remedy by Lender. 14. Joint and Several Liability; Signatories; Successors and Assigns Bound. Borrower's obligations and liabil- ity under this Security Instrument will be joint and several. However, any Borrower who signs this Security Instrument but does not sign the Note: (a) signs this Security Instrument to mortgage, grant, and convey such Borrower's interest in the Property under the terms of this Security Instrument; (b) signs this Security Instrument to waive any applicable inchoate rights and any available homestead exemptions, unless prohibited by Applicable Law; (c) signs this Security Instrument to assign any Miscellaneous Proceeds, Rents, or other earnings from the Property to Lender; (d) is not per- sonally obligated to pay the sums due under the Note or this Security Instrument; and (e) agrees that Lender and any other Borrower can agree to extend, modify, forbear, or make any accommodations with regard to the terms of the Note or this Security Instrument without such Borrower's consent and without affecting such Borrower's obligations under this Security Instrument. Subject to the provisions of Section 19, any Successor in Interest of Borrower who assumes Borrower's obligations under this Security Instrument in writing, and is approved by Lender, will obtain all of Borrower's rights, obligations, and benefits under this Security Instrument. Borrower will not be released from Borrower's obligations and liability under this Security Instrument unless Lender agrees to such release in writing. 15. Loan Charges. (a} Tax and Flood Determination Fees. Lender may require Borrower to pay (i) a one-time charge for a real estate tax verification and/or reporting service used by Lender in connection with this Loan, and (ii) either (A) a one-time charge for flood zone determination, certification, and tracking services, or (B) a one-time charge for flood zone determination and certification services and subsequent charges each time remappings or similar changes occur that reasonably might affect such determination or certification. Borrower will also be responsible for the payment of any fees imposed by the CALIFORNIA -Single Family-Fannie Mae/Freddie Mac UNIFORM INSTRUMENT (MERS) Form 3005 07/2021 ICE Mortgage Technology, Inc. Page 11 of 17 ~ CA21 EDEDL 0222 CAEDEDL (CLS) 08/08/2024 02:05 PM PST LOAN #: 40502406356976 Federal Emergency Management Agency, or any successor agency, at any time during the Loan term, in connection with any flood zone determinations. (b) Default Charges. If permitted under Applicable Law, Lender may charge Borrower fees for services performed in connection with Borrower's Default to protect Lender's interest in the Property and rights under this Security Instrument, including: (i) reasonable attorneys' fees and costs; (ii) property inspection, valuation, mediation, and loss mitigation fees; and (iii) other related fees. (c) Permissibility of Fees. In regard to any other fees, the absence of express authority in this Security Instrument to charge a specific fee to Borrower should not be construed as a prohibition on the charging of such fee. Lender may not charge fees that are expressly prohibited by this Security Instrument or by Applicable Law. (d) Savings Clause. If Applicable Law sets maximum loan charges, and that law is finally interpreted so that the interest or other loan charges collected or to be collected in connection with the Loan exceed the permitted limits, then (i) any such loan charge will be reduced by the amount necessary to reduce the charge to the permitted limit, and (ii) any sums already collected from Borrower which exceeded permitted limits will be refunded to Borrower. Lender may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to Borrower. If a refund reduces principal, the reduction will be treated as a partial prepayment without any prepayment charge (whether or not a prepayment charge is provided for under the Note). To the extent permitted by Applicable Law, Borrower's acceptance of any such refund made by direct payment to Borrower will constitute a waiver of any right of action Borrower might have arising out of such overcharge. 16. Notices; Borrower's Physical Address. All notices given by Borrower or Lender in connection with this Security Instrument must be in writing. (a) Notices to Borrower. Unless Applicable Law requires a different method, any written notice to Borrower in con- nection with this Security Instrument will be deemed to have been given to Borrower when (i) mailed by first class mail, or (ii) actually delivered to Borrower's Notice Address (as defined in Section 16(c) below) if sent by means other than first class mail or Electronic Communication (as defined in Section 16(b) below). Notice to any one Borrower will constitute notice to all Borrowers unless Applicable Law expressly requires otherwise. If any notice to Borrower required by this Security Instrument is also required under Applicable Law, the Applicable Law requirement will satisfy the corresponding requirement under this Security Instrument. (b) Electronic Notice to Borrower. Unless another delivery method is required by Applicable Law, Lender may provide notice to Borrower by e-mail or other electronic communication ("Electronic Communication") if: (i) agreed to by Lender and Borrower in writing; (ii) Borrower has provided Lender with Borrower's e-mail or other electronic address ("Electronic Address"); (iii) Lender provides Borrower with the option to receive notices by first class mail or by other non-Electronic Communication instead of by Electronic Communication; and (iv) Lender otherwise complies with Applicable Law. Any notice to Borrower sent by Electronic Communication in connection with this Security Instrument will be deemed to have been given to Borrower when sent unless Lender becomes aware that such notice is not delivered. If Lender becomes aware that any notice sent by Electronic Communication is not delivered, Lender will resend such communication to Borrower by first class mail or by other non-Electronic Communication. Borrower may withdraw the agreement to receive Electronic Communications from Lender at any time by providing written notice to Lender of Borrower's withdrawal of such agreement. (c) Borrower's Notice Address. The address to which Lender will send Borrower notice ("Notice Address") will be the Property Address unless Borrower has designated a different address by written notice to Lender. If Lender and Borrower have agreed that notice may be given by Electronic Communication, then Borrower may designate an Electronic Address as Notice Address. Borrower will promptly notify Lender of Borrower's change of Notice Address, including any changes to Borrower's Electronic Address if designated as Notice Address. If Lender specifies a proce- dure for reporting Borrower's change of Notice Address, then Borrower will report a change of Notice Address only through that specified procedure. (d) Notices to Lender. Any notice to Lender will be given by delivering it or by mailing it by first class mail to Lender's address stated in this Security Instrument unless Lender has designated another address (including an Electronic Address) by notice to Borrower. Any notice in connection with this Security Instrument will be deemed to have been given to Lender only when actually received by Lender at Lender's designated address (which may include an Electronic Address). If any notice to Lender required by this Security Instrument is also required under Applicable Law, the Applicable Law require- ment will satisfy the corresponding requirement under this Security Instrument. CALIFORNIA -Single Family -Fannie Mae/Freddie Mac UNIFORM INSTRUMENT (MERS) Form 3005 07/2021 ICE Mortgage Technology, Inc. Page 12 of 17 CA21 EDEDL 0222 CAEDEDL (CLS) 08/08/2024 02:05 PM PST LOAN #: 40502406356976 (e) Borrower's Physical Address. In addition to the designated Notice Address, Borrower will provide Lender with the address where Borrower physically resides, if different from the Property Address, and notify Lender whenever this address changes. 17. Governing Law; Severability; Rules of Construction. This Security Instrument is governed by federal law and the law of the State of California. All rights and obligations contained in this Security Instrument are subject to any requirements and limitations of Applicable Law. If any provision of this Security Instrument or the Note conflicts with Applicable Law (i) such conflict will not affect other provisions of this Security Instrument or the Note that can be given effect without the conflicting provision, and (ii) such conflicting provision, to the extent possible, will be considered modi- fied to comply with Applicable Law. Applicable Law might explicitly or implicitly allow the parties to agree by contract or it might be silent, but such silence should not be construed as a prohibition against agreement by contract. Any action required under this Security Instrument to be made in accordance with Applicable Law is to be made in accordance with the Applicable Law in effect at the time the action is undertaken. As used in this Security Instrument: (a) words in the singular will mean and include the plural and vice versa; (b) the word "may" gives sole discretion without any obligation to take any action; (c) any reference to "Section" in this document refers to Sections contained in this Security Instrument unless otherwise noted; and (d) the headings and captions are inserted for convenience of reference and do not define, limit, or describe the scope or intent of this Security Instrument or any particular Section, paragraph, or provision. 18. Borrower's Copy. One Borrower will be given one copy of the Note and of this Security Instrument. 19. Transfer of the Property or a Beneficial Interest in Borrower. For purposes of this Section 19 only, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract, or escrow agreement, the intent of which is the transfer of title by Borrower to a purchaser at a future date. If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, Lender will not exercise this option if such exercise is prohibited by Applicable Law. If Lender exercises this option, Lender will give Borrower notice of acceleration. The notice will provide a period of not less than 30 days from the date the notice is given in accordance with Section 16 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to, or upon, the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower and will be entitled to collect all expenses incurred in pursuing such remedies, including, but not limited to: (a) reasonable attorneys' fees and costs; (b) property inspection and valuation fees; and (c) other fees incurred to protect Lender's Interest in the Property and/or rights under this Security Instrument. 20. Borrower's Right to Reinstate the Loan after Acceleration. If Borrower meets certain conditions, Borrower will have the right to reinstate the Loan and have enforcement of this Security Instrument discontinued at any time up to the later of (a) five days before any foreclosure sale of the Property, or (b) such other period as Applicable Law might specify for the termination of Borrower's right to reinstate. This right to reinstate will not apply in the case of acceleration under Section 19. To reinstate the Loan, Borrower must satisfy all of the following conditions: (aa) pay Lender all sums that then would be due under this Security Instrument and the Note as if no acceleration had occurred; (bb) cure any Default of any other covenants or agreements under this Security Instrument or the Note; (cc) pay all expenses incurred in enforcing this Security Instrument or the Note, including, but not limited to: (i) reasonable attorneys' fees and costs; (ii) property inspection and valuation fees; and (iii) other fees incurred to protect Lender's interest in the Property and/or rights under this Security Instrument or the Note; and (dd) take such action as Lender may reasonably require to assure that Lender's interest in the Property and/or rights under this Security Instrument or the Note, and Borrower's obligation to pay the sums secured by this Security Instrument or the Note, will continue unchanged. Lender may require that Borrower pay such reinstatement sums and expenses in one or more of the following forms, as selected by Lender: (aaa) cash; {bbb) money order; (ccc) certified check, bank check, treasurer's check, or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a U.S. federal agency, instru- mentality, or entity; or {ddd) Electronic Fund Transfer. Upon Borrower's reinstatement of the Loan, this Security Instrument and obligations secured by this Security Instrument will remain fully effective as if no acceleration had occurred. CALIFORNIA -Single Family -Fannie Mae/Freddie Mac UNIFORM INSTRUMENT (MERS) Form 3005 07/2021 ICE Mortgage Technology, Inc. Page 13 of 17 - CA21 EDEDL 0222 CAEDEDL (CLS) 08/08/2024 02:05 PM PST LOAN #: 40502406356976 21. Sale of Note. The Note or a partial interest in the Note, together with this Security Instrument, may be sold or otherwise transferred one or more times. Upon such a sale or other transfer, all of Lender's rights and obligations under this Security Instrument will convey to Lender's successors and assigns. 22. Loan Servicer. Lender may take any action permitted under this Security Instrument through the Loan Servicer or another authorized representative, such as a sub-servicer. Borrower understands that the Loan Servicer or other authorized representative of Lender has the right and authority to take any such action. The Loan Servicer may change one or more times during the term of the Note. The Loan Servicer may or may not be the holder of the Note. The Loan Servicer has the right and authority to: (a) collect Periodic Payments and any other amounts due under the Note and this Security Instrument; (b) perform any other mortgage loan servicing obligations; and (c) exercise any rights under the Note, this Security Instrument, and Applicable Law on behalf of Lender. If there is a change of the Loan Servicer, Borrower will be given written notice of the change which will state the name and address of the new Loan Servicer, the address to which payments should be made, and any other information RESPA requires in connection with a notice of transfer of servicing. 23. Notice of Grievance. Until Borrower or Lender has notified the other party (in accordance with Section 16) of an alleged breach and afforded the other party a reasonable period after the giving of such notice to take corrective action, neither Borrower nor Lender may commence, join, or be joined to any judicial action (either as an individual litigant or a member of a class) that (a) arises from the other party's actions pursuant to this Security Instrument or the Note, or (b) alleges that the other party has breached any provision of this Security Instrument or the Note. If Applicable Law provides a time period that must elapse before certain action can be taken, that time period will be deemed to be reasonable for purposes of this Section 23. The notice of Default given to Borrower pursuant to Section 26(a) and the notice of acceleration given to Borrower pursuant to Section 19 will be deemed to satisfy the notice and opportunity to take corrective action provisions of this Section 23. 24. Hazardous Substances. (a) Definitions. As used in this Section 24: (i) "Environmental Law" means any Applicable Laws where the Property is located that relate to health, safety, or environmental protection; (ii) "Hazardous Substances" include (A) those sub- stances defined as toxic or hazardous substances, pollutants, or wastes by Environmental Law, and (B) the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, corrosive materials or agents, and radioactive materials; (iii) "Environmental Cleanup" includes any response action, remedial action, or removal action, as defined in Environ- mental Law; and (iv) an "Environmental Condition" means a condition that can cause, contribute to, or otherwise trigger an Environmental Cleanup. (b) Restrictions on Use of Hazardous Substances. Borrower will not cause or permit the presence, use, disposal, storage, or release of any Hazardous Substances, or threaten to release any Hazardous Substances, on or in the Property. Borrower will not do, nor allow anyone else to do, anything affecting the Property that: (i) violates Environmental Law; (ii) creates an Environmental Condition; or (iii) due to the presence, use, or release of a Hazardous Substance, creates a condition that adversely affects or could adversely affect the value of the Property. The preceding two sentences will not apply to the presence, use, or storage on the Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property (including, but not limited to, hazardous substances in consumer products). (c) Notices; Remedial Actions. Borrower will promptly give Lender written notice of: (i) any investigation, claim, demand, lawsuit, or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge; (ii) any Environmental Condition, including but not limited to, any spilling, leaking, discharge, release, or threat of release of any Hazardous Substance; and (iii) any condition caused by the presence, use, or release of a Hazardous Substance that adversely affects the value of the Property. If Borrower learns, or is notified by any governmental or regulatory authority or any private party, that any removal or other remediation of any Hazardous Substance affecting the Property is necessary, Borrower will promptly take all necessary remedial actions in accordance with Environmental Law. Nothing in this Security Instrument will create any obligation on Lender for an Environmental Cleanup. 25. Electronic Note Signed with Borrower's Electronic Signature. If the Note evidencing the debt for this Loan is electronic, Borrower acknowledges and represents to Lender that Borrower: (a) expressly consented and intended to sign the electronic Note using an Electronic Signature adopted by Borrower ("Borrower's Electronic Signature") instead CALIFORNIA -Single Family -Fannie Mae/Freddie Mac UNIFORM INSTRUMENT (MEAS) Form 3005 07/2021 ICE Mortgage Technology, Inc. Page 14 of 17 CA21 EDEDL 0222 CAEDEDL (CLS) 08/08/2024 02:05 PM PST LOAN #: 40502406356976 of signing a paper Note with Borrower's written pen and ink signature; (b) did not withdraw Borrower's express consent to sign the electronic Note using Borrower's Electronic Signature; (c) understood that by signing the electronic Note using Borrower's Electronic Signature, Borrower promised to pay the debt evidenced by the electronic Note in accordance with its terms; and (d) signed the electronic Note with Borrower's Electronic Signature with the intent and understanding that by doing so, Borrower promised to pay the debt evidenced by the electronic Note in accordance with its terms. NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as follows: 26. Acceleration; Remedies. (a) Notice of Default. Lender will give a notice of Default to Borrower prior to acceleration following Borrower's Default, except that such notice of Default will not be sent when Lender exercises its right under Section 19 unless Appli- cable Law provides otherwise. The notice will specify, in addition to any other information required by Applicable Law: (i) the Default; (ii) the action required to cure the Default; (iii) a date, not less than 30 days (or as otherwise specified by Applicable Law) from the date the notice is given to Borrower, by which the Default must be cured; (iv) that failure to cure the Default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property; (v) Borrower's right to reinstate after acceleration; and (vi) Borrower's right to bring a court action to deny the existence of a Default or to assert any other defense of Borrower to acceleration and sale. (b) Acceleration; Power of Sale; Expenses. If the Default is not cured on or before the date specified in the notice, Lender may require immediate payment in full of all sums secured by this Security Instrument without further demand and may invoke the power of sale and any other remedies permitted by Applicable Law. Lender will be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 26, including, but not limited to: (i) reasonable attorneys' fees and costs; (ii) property inspection and valuation fees; and (iii) other fees incurred to protect Lender's inter- est in the Property and/or rights under this Security Instrument. (c) Notice of Sale; Sale of Property. If Lender invokes the power of sale, Lender will 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. Trustee will cause this notice to be recorded in each county in which any part of the Property is located. Lender or Trustee will mail copies of the notice as prescribed by Applicable Law to Borrower and to the other required recipients. Trustee will give public notice of sale to the persons and in the manner prescribed by Applicable Law. At a time permitted by, and in accordance with Applicable Law, Trustee, without further demand on Borrower, will sell the Property at public auction to the highest bidder at the time and place and under the terms designated in the notice of sale in one or more parcels and in any order Trustee determines. Unless prohibited by Applicable Law, 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 its designee may purchase the Property at any sale. (d) Trustee's Deed; Proceeds of Sale. Trustee will deliver to the purchaser a Trustee's deed conveying the Property without any covenant or warranty, expressed or implied. The recitals in the Trustee's deed will be prima facie or conclu- sive evidence of the truth of the statements made in that deed, in accordance with Section 2924(c) of the Civil Code of California. Trustee will apply the proceeds of the sale in the following order: (i) to all expenses of the sale, including, but not limited to, reasonable Trustee's and attorneys' fees; (ii) to all sums secured by this Security Instrument; and (iii) any excess to the person or persons legally entitled to it. 27. Reconveyance. Upon payment of all sums secured by this Security Instrument, Lender will request Trustee to reconvey the Property and will surrender this Security Instrument and all Notes evidencing the debt secured by this Security Instrument to Trustee. Upon such request, Trustee will reconvey the Property without warranty to the person or persons legally entitled to it. Lender may charge such person or persons a reasonable fee for reconveying the Property, but only if the fee is paid to a third party (such as the Trustee) for services rendered and the charging of the fee is per- mitted under Applicable Law. If the fee charged does not exceed the fee set by Applicable Law, the fee is conclusively presumed to be reasonable. 28. Substitute Trustee. Lender may, from time to time appoint a successor trustee to any Trustee appointed under this Security Instrument by an instrument executed and acknowledged by Lender and recorded in the office of the Recorder of the county in which the Property is located. The instrument will contain the name of the original Lender, Trustee, and Borrower, the instrument number or the book and page where this Security Instrument is recorded and the name and address of the successor trustee. Without conveyance of the Property, the successor trustee will succeed to all the rights, CALIFORNIA -Single Family -Fannie Mae/Freddie Mac UNIFORM INSTRUMENT (MEAS) Form 3005 07/2021 ICE Mortgage Technology, Inc. Page 15 of 17 - CA21 EDEDL 0222 CAEDEDL (CLS) 08/08/2024 02:05 PM PST Lender: CrossCountry Mortgage, LLC NMLS ID: 3029 Loan Originator: Chaz Hinz NMLS ID: 309521 LOAN #: 40502406356976 CALIFORNIA -Single Family -Fannie Mae/Freddie Mac UNIFORM INSTRUMENT (MERS) Form 3005 07/2021 ICE Mortgage Technology, Inc. Page 17 of 17 CA21 EDEDL 0222 CAEDEDL (CLS) 08/08/2024 02:05 PM PST For APN/Parcel ID(s): 203-101-37-14 EXHIBIT A Legal Description THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS: A CONDOMINIUM COMPRISED OF: A CONDOMINIUM LOCATED ON THE REAL PROPERTY DESCRIBED AS LOT 1 OF CITY OF CARLSBAD TRACT NO. 01-13, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 14797, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 17, 2004, AS INSTRUMENT NO. 2004-446317 OF OFFICIAL RECORDS, COMPRISED OF: PARCEL 1: UNIT 579, AS SHOWN UPON THAT CERTAIN CONDOMINIUM PLAN FOR LAGUNA POINT, AS RECORDED ON JUNE 27, 2005, AS INSTRUMENT NO. 2005-0538003, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, CALIFORNIA, ("CONDOMINIUM PLAN"). PARCEL 2: AN UNDIVIDED 1121ST INTEREST AS A TENANT IN COMMON IN THE UNDIVIDED INTEREST COMMON AREA AS SHOWN AND DEFINED ON THE CONDOMINIUM PLAN AND AS DESCRIBED IN THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR LAGUNA POINT HOMEOWNERS ASSOCIATION, RECORDED ON JUNE 27, 2005, AS INSTRUMENT NO. 2005-538002, IN THE OFFICE OF THE COUNTY RECORDER FOR SAN DIEGO COUNTY, CALIFORNIA ("DECLARATION"). THE UNDIVIDED INTEREST COMMON AREA WILL NOT BE OWNED BY LAGUNA POINT HOMEOWNERS ASSOCIATION, A CALIFORNIA NON-PROFIT MUTUAL BENEFIT CORPORATION ("ASSOCIATION"). PARCEL 3: ' NON-EXCLUSIVE EASEMENTS FOR INGRESS1 EGRESS, ACCESS, ENJOYMENT, USE AND SUPPORT OVER THE ASSOCIATION PROPERTY AS DESCRIBED IN THE DECLARATION AND INDICATED ON THE CONDOMINIUM PLAN, WHICH WILL BE OWNED BY THE ASSOCIATION. EXCEPTING THEREFROM THE FOLLOWING: (A) ALL UNITS, AS SHOWN UPON THE CONDOMINIUM PLAN OTHER THAN THE UNIT CONVEYED AS PARCEL 1 ABOVE. (B) THE EXCLUSIVE RIGHT OF POSSESSION AND OCCUPANCY OF ALL THOSE AREAS DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY AS DESCRIBED IN THE DECLARATION AND AS SHOWN UPON THE CONDOMINIUM PLAN WHICH ARE SET ASIDE AND ALLOCATED FOR THE EXCLUSIVE USE OF OWNERS OF UNITS. (C) THE EASEMENT AND OTHER RIGHTS RESERVED IN FAVOR OF DECLARANT AS DESCRIBED IN THE DECLARATION AND ON THE CONDOMINIUM PLAN. PARCEL 4: THE EXCLUSIVE RIGHT TO POSSESSION AND OCCUPANCY OF THAT PORTION OF THE ASSOCIATION PROPERTY, DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY, AS SHOWN ON THE CONDOMINIUM PLAN, DESIGNATED AS D-579. PARCEL 5: EXHIBIT A Legal Description THE EXCLUSIVE RIGHT TO POSSESSION AND OCCUPANCY OF THAT PORTION OF THE ASSOCIATION PROPERTY, DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY, AS SHOWN ON THE CONDOMINIUM PLAN, DESIGNATED AS S-579. , LOAN #: 40502406356976 MIN: 1007191-0002981645-9 CONDOMINIUM RIDER THIS CONDOMINIUM RIDER is made this 9th day of August, 2024 and is incorporated into and amends and supplements the Mortgage, Mortgage Deed, Deed of Trust, or Security Deed (the "Security Instrument") of the same date given by the undersigned (the "Borrower") to secure Borrower's Note to CrossCountry Mortgage, LLC, a Limited Liability Company (the "Lender'') of the same date and covering the Property described in the Security Instrument and located at: 579 Laguna Drive, Carlsbad, CA 92008. The Property includes a unit in, together with an undivided interest in the common ele- ments of, a condominium project known as: Laguna Point (the "Condominium Project"). If the owners association or other entity which acts for the Condominium Project (the "Owners Association") holds title to property for the benefit or use of its members or shareholders, the Property also includes Borrower's interest in the Owners Association and the uses, proceeds, and benefits of Borrower's interest. CONDOMINIUM COVENANTS. In addition to the representations, warranties, cov- enants, and agreements made in the Security Instrument, Borrower and Lender further covenant and agree as follows: A. Condominium Obligations. Borrower will perform all of Borrower's obligations under the Condominium Project's Constituent Documents. The "Constituent Documents" are the: (i) Declaration or any other document which creates the Condominium Project; (ii) by-laws; (iii) code of regulations; and (iv) other equivalent documents. Borrower will promptly pay, when due, all dues and assessments imposed pursuant to the Constituent Documents. MULTISTATE CONDOMINIUM RIDER -Single Family -Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3140 07/2021 ICE Mortgage Technology, Inc. Page 1 of 3 F3140v21RLU 0322 F3140RLU (CLS) 08/08/2024 02:05 PM PST LOAN #: 40502406356976 B. Property Insurance. So long as the Owners Association maintains, with a generally accepted insurance carrier, a "master'' or "blanket" policy on the Condominium Project which is satisfactory to Lender and which provides insurance coverage in the amounts (including deductible levels), for the periods, and against loss by fire, hazards included within the term "extended coverage," and any other hazards, including, but not limited to, earthquakes, winds, and floods, for which Lender requires insurance, then (i) Lender waives the provision in Section 3 for the portion of the Periodic Payment made to Lender consisting of the yearly premium installments for property insurance on the Property, and (ii) Borrower's obligation under Section 5 to maintain property insurance cover- age on the Property is deemed satisfied to the extent that the required coverage is provided by the Owners Association policy. What Lender requires as a condition of this waiver can change during the term of the loan. Borrower will give Lender prompt notice of any lapse in required property insurance coverage provided by the master or blanket policy. In the event of a distribution of property insurance proceeds in lieu of restora- tion or repair following a loss to the Property, whether to the unit or to common elements, any proceeds payable to Borrower are hereby assigned and will be paid to Lender for application to the sums secured by the Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. C. Public Liability Insurance. Borrower will take such actions as may be reasonable to insure that the Owners Association maintains a public liability insurance policy acceptable in form, amount, and extent of coverage to Lender. D. Condemnation. The proceeds of any award or claim for damages, direct or consequential, payable to Borrower in connection with any condemnation or other taking of all or any part of the Property, whether of the unit or of the common elements, or for any conveyance in lieu of condemnation, are hereby assigned and will be paid to Lender. Such proceeds will be applied by Lender to the sums secured by the Security Instrument as provided in Section 12. E. Lender's Prior Consent. Borrower will not, except after notice to Lender and with Lender's prior written consent, either partition or subdivide the Prop- erty or consent to: (i) the abandonment or termination of the Condominium Project, except for abandonment or termination required by law in the case of substantial destruction by fire or other casualty or in the case of a taking by condemnation or eminent domain; (ii) any amendment to any provision of MULTISTATE CONDOMINIUM RIDER -Single Family -Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3140 07/2021 ICE Mortgage Technology, Inc. Page 2 of 3 F3140v21RLU 0322 F3140RLU (CLS) 08/08/2024 02:05 PM PST Recording Requested by: Fidelity National Title San Diego Office and when recorded mail to: City of Carlsbad Housing Services Manager 1200 Carlsbad Village Drive Carlsbad, CA 92008 No fee for recording pursuant to Government Code Section 27383 DOC# 2024-0220631 111111111111 lllll 111111111111111111111111111111111111111111111 IIII IIII Aug 19, 2024 01 :37 PM OFFICIAL RECORDS JORDAN Z. MARKS, SAN DIEGO COUNTY RECORDER FEES: $0.00 (SB2 Atkins: $0.00) PCOR: N/A PAGES: 14 DEED OF TRUST AND SECURITY AGREEMENT (City of Carlsbad Affordable Housing Resale Program) Note to Borrower: This Deed of Trust contains provisions prohibiting assumption THIS DEED OF TRUST AND SECURITY AGREEMENT (the "Deed of Trust") is made as of this 2nd day of AuguSt 2024 among David Armando Hamburger Hamburger and Maria Aracely Zapata Castrillon, husband and wife as community property with right of survivorship, ("Borrower"), as Trustor, and Fidelity National Title & Escrow ("Trustee"), as trustee, and the City of Carlsbad, a municipal corporation ("City"), as beneficiary. *Borrower Address: 579 Laguna Drive, Carlsbad, CA 92008 The Borrower, in consideration of the promises herein recited and the trust herein created, irrevocably grants, transfers, conveys and assigns to the Trustee, in trust, with power of sale, the real property located in the City of Carlsbad, State of California, described in the attached Exhibit A (the "Property"); TOGETHER with all the improvements now or hereafter erected on the real property described in Exhibit A, and all easements, rights, appurtenances, and all fixtures now or hereafter attached to the property, all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the property covered by this Deed of Trust (collectively, the "Property"); and TOGETHER with all articles of personal property or fixtures now or hereafter attached to or used in and about the building or buildings now erected or hereafter to be erected on the Property which are necessary to the complete and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or furnished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution therefore, whether or not the same are, or shall be attached to said building or buildings in any manner; and all of the foregoing, together with the Property, is herein referred to as the "Security"; THIS DEED OF TRUST IS SECOND AND SUBSEQUENT TO A DEED OF TRUST RECORDING CONCURRENTLY 1 1010,17\2045536.2 HEREWITH ;)(_:: Exempt from fee per GC27388.1 due to being recorded in connection with concurrent transfer that is subject to the imposition of documentary transfer tax. To have and to hold the Security together with acquittances to the Trustee, its successors and assigns forever; TO SECURE to the City the repayment of the sums evidenced by a promissory note in the amount Sixty-Six Thousand Six Hundred and Sixteen Dollars ($660,616) executed by the Borrower in favor of the City as of the date of this Deed of Trust ("Note"); TO SECURE to the City the payment of all other sums, with interest thereon, advanced in accordance herewith to protect the security of this Deed of Trust; and the performance of the covenants and agreements of the Borrower herein contained; TO SECURE to the City the performance of the covenants and agreements of Borrower contained in that certain Declaration of Restrictive Covenants Regarding Restrictions on Transfer of Property, Occupancy Restrictions, Refinancing Restrictions and Option to Purchase executed by and between the Borrower and the City of even date herewith and recorded against the Property on, or about, the date this Deed of Trust is recorded as a lien against the Property (the "Resale Restriction Agreement") and to secure the payment of Excess Sales Proceeds (as defined in the Resale Restriction Agreement) and Unauthorized Rental Proceeds (as defined in the Resale Restriction Agreement) that may become due by Borrower to City; and TO SECURE the performance of any obligations of Borrower in any other agreements with respect to the financing of the Property or the Security the failure of which would adversely affect Beneficiary, whether or not Beneficiary is a party to such agreements. BORROWER AND CITY COVENANT AND AGREE AS FOLLOWS: 1. Borrower's Estate. That the Borrower is lawfully seized of the estate hereby conveyed and has the right to grant and convey the Security, that other than this Deed of Trust, the Security is encumbered only by: (a) that deed of trust executed bY. the Borrower in connection with a loan made to the Borrower by tro~S ~ur\'tflj °'0'<';r1ifs9s%ccessors and assigns (the "First Lender"), dated A-v9vs\-C\ , 2024, executed by the Borrower in favor of First Lender, and recorded in the Coun,l.X1 RL~an Diego on K~\q , 20 ~, and assigned Recorder's Serial No.eo({!U((t(\tl~ he~1rsfLender Deed of Trust"), securing a promissory note executed by the Borrower in favor of the First Lender ("First Lender Note"), to assist in the purchase of the Property; and (b) the Resale Restriction Agreement. The Borrower agrees to warrant and defend generally the title to the Security against all claims and demands, subject to any declarations, easements or restrictions listed in a schedule of exceptions to coverage in any title insurance policy insuring the City's interest in the Security. (As used in this Deed of Trust, the term "First Lender" shall include all successors and assigns of the First Lender.) 2. Repayment of Loan; Prohibition on Assumptions. The Borrower will promptly repay, when due, the principal, interest and other sums required by the Note and Resale Restriction Agreement, including all principal and interest on the Home buyer Loan ( as defined in the Note) and the Excess Sales Proceeds and Unauthorized Rental Proceeds due under the Resale Restriction Agreement. Among other things, the Note contains the following provisions concerning repayment of the loan under certain conditions: 2 1010\17\2045536.2 Limitations on Assumption of Note. The Borrower acknowledges that this Note is given in connection with the purchase of the Property as part of a program of the City to assist in the purchase of homes by very low and low income households. Consequently, this Note is only assumable by Eligible Purchasers (as defined in the Resale Restriction Agreement). This Note is due in full upon all other Transfers. In the event this Note is assumed by an Eligible Purchaser, the Eligible Purchaser shall execute a new note, which shall be in an amount equal to the principal and Contingent Interest owed by Borrower, a new deed of trust and a new resale restriction agreement with a restarted term in forms approved by the City. 3. First Lender Loan. The Borrower will observe and perform all of the covenants and agreements of the First Lender Note, First Lender Deed of Trust, and related First Lender loan documents. 4. Resale Restriction Agreement. The Borrower will observe and perform all of the covenants and agreements of the Resale Restriction Agreement. Among other things, the Resale Restriction Agreement requires the Borrower to utilize the Property as the Borrower's principal residence, and restricts: (i) the Borrower's ability to transfer the Property, or the obligations under the Note; (ii) the Borrower's ability to refinance the First Lender Note; and (iii) the Borrower's ability to use the Property as security for additional loans or financing. The Borrower's failure to comply with the requirements of the Resale Restriction Agreement constitutes a default under this Deed of Trust. 5. Charges; Liens. The Borrower will pay all taxes, assessments and other charges, fines and impositions attributable to the Security which may attain a priority over this Deed of Trust, by the Borrower making any payment, when due, directly to the payee thereof. The Borrower will promptly furnish to the City all notices of amounts due under this paragraph, and in the event the Borrower makes payment directly, the Borrower will promptly discharge any lien which has priority over this Deed of Trust; provided, that the Borrower will not be required to discharge the lien of the First Lender Deed of Trust or any other lien described in this paragraph so long as the Borrower will agree in writing to the payment of the obligation secured by such lien in a manner acceptable to the City, or will, in good faith, contest such lien by, or defend enforcement of such lien in, legal proceedings which operate to prevent the enforcement of the lien or forfeiture of the Security or any part thereof. 6. Insurance. The Borrower will keep the Security insured with a standard fire and extended coverage insurance policy in at least an amount equal to the replacement cost of the Security, but in no event less than the amount necessary to prevent the Borrower from becoming a co-insurer under the terms of the policy. The insurance carrier providing this insurance shall be licensed to do business in the State of California and be chosen by the Borrower subject to approval by the City; provided, that such approval will not be withheld if the insurer is also approved by the First Lender, the Federal Home Loan Mortgage Corporation, Fannie Mae, Freddie Mac, the United States Department of 3 1010\17\2045536.2 Housing and Urban Development, the United States Department of Veterans Affairs, or any successor thereto. All insurance policies and renewals thereof will be in a form acceptable to the City and will include a standard mortgagee clause with standard lender's endorsement in favor of the holder of the First Lender Note and the City as their interests may appear and in a form acceptable to the City. The City shall have the right to hold, or cause its designated agent to hold, the policies and renewals thereof, and the Borrower shall promptly furnish to the City, or its designated agent, the original insurance policies or certificates of insurance, all renewal notices and all receipts of paid premiums. In the event of loss, the Borrower will give prompt notice to the insurance carrier and the City or its designated agent. The City, or its designated agent, may make proof of loss if not made promptly by the Borrower. The City shall receive ten ( 10) days advance notice of cancellation of any insurance policies required under this section. Unless the City and the Borrower otherwise agree in writing, insurance proceeds, subject to the rights of the First Lender, will be applied to restoration or repair of the Security damaged, provided such restoration or repair is economically feasible and the Security of this Deed of Trust is not thereby impaired. If such restoration or repair is not economically feasible or if the security of this Deed of Trust would be impaired, the insurance proceeds will be used, subject to the rights of the First Lender, to repay the Note and all sums secured by this Deed of Trust, with the excess, if any, paid to the Borrower. If the Security is abandoned by the Borrower, or if the Borrower fails to respond to the City, or its designated agent, within thirty (30) days from the date notice is mailed by either of them to the Borrower that the insurance carrier offers to settle a claim for insurance benefits, the City, or its designated agent, is authorized, subject to the rights of the First Lender, to collect and apply the insurance proceeds at the City's option either to restoration or repair of the Security or to repay the Note and all sums secured by this Deed of Trust. If the Security is acquired by the City, all right, title and interest of the Borrower in and to any insurance policy and in and to the proceeds thereof resulting from damage to the Security prior to the sale or acquisition will pass to the City to the extent of the sums secured by this Deed of Trust immediately prior to such sale or acquisition subject to the rights of the First Lender. 7. Preservation and Maintenance of Security. The Borrower will keep the Security in good repair and will not commit waste or permit impairment or deterioration of the Security. If there arises a condition in contravention of this section, and if the Borrower has not cured such condition within thirty (30) days after receiving a City notice of such a condition, then in addition to any other rights available to the City, the City shall have the right (but not the obligation) to perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Security to recover its cost of curing. 8. Protection of the City's Security. If the Borrower fails to perform the covenants and agreements contained in this Deed of Trust, the Resale Restriction Agreement, the First Lender Note, the First Lender Deed of Trust, or if any action or proceeding is commenced which materially affects the City's interest in the Security, including, but not limited to, default under the First Lender Deed of Trust, the First Lender Note, eminent domain, insolvency, code 4 1010\17\2045536.2 enforcement, or arrangements or proceedings involving a bankrupt or decedent, then the City, at the City's option, upon notice to the Borrower, may make such appearances, disburse such sums and take such action as it determines necessary to protect the City's interest, including but not limited to, disbursement of reasonable attorney's fees and entry upon the Security to make repairs. Any amounts disbursed by the City pursuant to this paragraph, with interest thereon, will become an indebtedness of the Borrower secured by this Deed of Trust. Unless the Borrower and City agree in writing to other terms of payment, such amount will be payable upon notice from the City to the Borrower requesting payment thereof, and will bear interest from the date of disbursement at the lesser of ten percent (10%) or the highest rate permissible under applicable law. Nothing contained in this paragraph will require the City to incur any expense or take any action hereunder. 9. Inspection. The City may make or cause to be made reasonable entries upon and inspections of the Security; provided that the City will give the Borrower reasonable notice of inspection. 10. Forbearance by the City Not a Waiver. Any forbearance by the City in exercising any right or remedy will not be a waiver of the exercise of any such right or remedy, nor shall acceptance by the City of any payment provided for in the Note constitute a waiver of the City's right to require prompt payment of any remaining principal and interest owed. The procurement of insurance or the payment of taxes or other liens or charges by the City will not be a waiver of the City's right to accelerate the maturity of the indebtedness secured by this Deed of Trust. 11. Hazardous Substances. Borrower shall not cause or permit the presence, use, disposal, storage, or release of any Hazardous Substances on or in the Property. Borrower shall not do, nor allow anyone else to do, anything affecting the Property that is in violation of any Environmental Law. The preceding two sentences shall not apply to the presence, use, or storage on the Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property. "Hazardous Substances" shall mean those substances defined as toxic or hazardous substances or hazardous waste under any Environmental Law, and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials. "Environmental Law" shall mean all federal and state of California laws that relate to health, safety or environmental protection. Borrower shall promptly give City written notice of any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge. If Borrower learns, or is notified by any governmental or regulatory authority, that any removal or other remediation of any Hazardous Substance affecting the Property is 5 1010\17\2045536.2 necessary, Borrower shall promptly take all necessary remedial actions in accordance with Environmental Law. 12. Remedies Cumulative. All remedies provided in this Deed of Trust are distinct and cumulative to any other right or remedy under this Deed of Trust or any other document, or afforded by law or equity, and may be exercised concurrently, independently or successively. 13. Successors and Assigns Bound. The covenants and agreements herein contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of the City and the Borrower subject to the provisions of this Deed of Trust. 14. Joint and Several Liability. All covenants and agreements of the Borrower shall be joint and several. 15. Notice. Except for any notice required under applicable law to be given in another manner, all notices required in this Deed of Trust shall be sent by certified mail, return receipt requested or express delivery service with a delivery receipt, or personally delivered with a delivery receipt obtained, and shall be deemed to be effective as of the date shown on the delivery receipt as the date of delivery, the date delivery was refused, or the date the notice was returned as undeliverable as follows: To the Owner: 579 Laguna Dr. Carlsbad, CA 92008 To the City: City of Carlsbad Housing Services Manager 1200 Carlsbad Village Drive Carlsbad, CA 92008 Attn: Affordable Housing Resale Program The parties may subsequently change addresses by providing written notice of the change in address to the other parties in accordance with this section. 16. Controlling Law. This Deed of Trust shall be construed in accordance with and be governed by the laws of the State of California. 17. Invalid Provisions. If any one or more of the provisions contained in this Deed of Trust, Resale Restriction Agreement or the Note shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions, and this Deed of Trust, the Resale Restriction Agreement and the Note shall be construed as if such invalid, illegal or unenforceable provision had never been contained in this Deed of Trust, Resale Restriction Agreement or the Note. 6 1010\i 7\2045536.2 18. Captions. The captions and headings in this Deed of Trust are for convenience only and are not to be used to interpret or define the provisions hereof. 19. Nonliability for Negligence, Loss, or Damage. Borrower acknowledges, understands and agrees that the relationship between Borrower and the City is solely that of a borrower and the administrator of a municipal inclusionary housing program, and that the City does not undertake or assume any responsibility for or duty to Borrower to select, review, inspect, supervise, pass judgment on, or inform Borrower of the quality, adequacy or suitability of the Security or any other matter. The City owes no duty of care to protect Borrower against negligent, faulty, inadequate or defective building or construction or any condition of the Security and Borrower agrees that neither Borrower, or Borrower's heirs, successors or assigns shall ever claim, have or assert any right or action against the City for any loss, damage or other matter arising out of or resulting from any condition of the Security and will hold City harmless from any liability, loss or damage for these things. 20. Indemnity. Borrower agrees to defend, indemnify, and hold the City harmless from all losses, damages, liabilities, claims, actions, judgments, costs, expenses and reasonable attorneys' fees that the City may incur as a direct or indirect consequence of: a. Borrower's failure to perform any obligations as and when required by the Note, Resale Restriction Agreement, and this Deed of Trust; or b. the failure at any time of any of Borrower's representations or warranties to be true and correct. This provision shall survive the term of this Agreement. 21. Default; Remedies. Upon the Borrower's breach of any covenant or agreement of the Borrower in the Note, Resale Restriction Agreement or this Deed of Trust, including, but not limited to, the covenants to pay, when due, any sums secured by this Deed of Trust, the City, prior to acceleration, will send, in the manner set forth in Section 15 of this Deed of Trust, notice to the Borrower specifying: (1) the breach; (2) if the breach is curable, the action required to cure such breach; (3) a date, not less than thirty (30) days from the date the notice is effective as set forth in Section 15 of this Deed of Trust, by which such breach, if curable, is to be cured; and (4) if the breach is curable, 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 Deed of Trust and sale of the Security. Notice shall be effective as of the date shown on the delivery receipt as the date of delivery, the date delivery was refused or the date the notice was returned as undeliverable. The notice will also inform the Borrower of the Borrower's right to reinstate after acceleration and the right to bring a court action to assert the nonexistence of default or any other defense of the Borrower to acceleration and sale. If the breach is not curable or is not cured on or before the date specified in the notice, the City, at the City's option, may: (a) declare all of the sums secured by this 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 California law; (b) either in person or by agent, with or without 7 1010\17\2045536.2 bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Security and take possession thereof ( or any part thereof) and of any of the Security, in its own name or in the name of the Trustee, and do any acts which it deems necessary or desirable to preserve the value or marketability of the Security, or part thereof or interest therein, increase the income therefrom or protect the security thereof. The entering upon and taking possession of the Security shall not cure or waive any breach hereunder or invalidate any act done in response to such breach and, notwithstanding the continuance in possession of the Security, the City shall be entitled to exercise every right provided for in this Deed of Trust, or by law upon occurrence of any uncured breach, including the right to exercise the power of sale; ( c) commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (d) deliver to the Trustee a written declaration of default and demand for sale, pursuant to the provisions for notice of sale found at California Civil Code Sections 2924, et seq., as amended from time to time; or ( e) exercise all other rights and remedies provided herein, in the instruments by which the Borrower acquires title to any Security, or in any other document or agreement now or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or provided by law. The City shall be entitled to collect all reasonable costs and expenses incurred in pursuing the remedies provided in this paragraph, including, but not limited to, reasonable attorney's fees. 22. Acceleration. Upon the occurrence of a default under the Note, the Resale Restriction Agreement, this Deed of Trust, the First Lender Note, or the First Lender Deed of Trust, the City shall have the right to declare the full amount of the principal along with any interest under the Note immediately due and payable. Any failure by the City to pursue its legal and equitable remedies upon default shall not constitute a waiver of the City's right to declare a default and exercise all of its rights under the Note, the Resale Restriction Agreement, and this Deed of Trust. Nor shall acceptance by the City of any payment provided for in the Note constitute a waiver of the City's right to require prompt payment of any remaining principal and interest owed. 23. Borrower's Right to Reinstate. Notwithstanding the City's acceleration of the sums secured by this Deed of Trust, the Borrower will have the right to have any proceedings begun by the City to enforce this Deed of Trust discontinued at any time prior to five (5) days before sale of the Security pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this Deed of Trust if: (a) the Borrower pays City all sums, if any, which would be then due under this Deed of Trust and no acceleration under the Note has occurred; (b) the Borrower cures all breaches of any other covenants or agreements of the Borrower contained in the Note, Resale Restriction Agreement or this Deed of Trust; (c) the Borrower pays all reasonable expenses incurred by City and the Trustee in enforcing the covenants and agreements of the Borrower contained in the Note, Resale Restriction Agreement or this Deed of Trust, and in enforcing the City's and the Trustee's remedies, including, but not limited to, reasonable attorney's fees; and (d) the Borrower takes such action as City may reasonably require to assure that the lien of this Deed of Trust, City's interest in the Security and the Borrower's obligation to pay the sums secured by this Deed of Trust shall continue 8 1010\17\2045536.2 unimpaired. Upon such payment and cure by the Borrower, this Deed of Trust and the obligations secured hereby will remain in full force and effect as if no acceleration had occurred. 24. Reconveyance. Upon payment of all sums secured by this Deed of Trust, the City will request the Trustee to reconvey the Security and will surrender this Deed of Trust and the Note to the Trustee. The Trustee will reconvey the Security without warranty and without charge to the person or persons legally entitled thereto. Such person or persons will pay all costs of recordation, if any. 25. Substitute Trustee. The City, at the City's option, may from time to time remove the Trustee and appoint a successor trustee to any trustee appointed hereunder. The successor trustee will succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law. 26. Subordination to First Lender Mortgage. Notwithstanding any other provision hereof, the provisions of this Deed of Trust shall be subordinate to the lien of the First Lender Deed of Trust and shall not impair the rights of the First Lender, or the First Lender's successor or assign, to exercise its remedies under the First Lender Deed of Trust in the event of default under the First Lender Deed of Trust by the Borrower. Such remedies under the First Lender Deed of Trust include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. After such foreclosure or acceptance of a deed or assignment in lieu of foreclosure, or upon assignment of the First Lender Deed of Trust to the Secretary of the United States Department of Housing and Urban Development (the "Secretary"), this Deed of Trust shall be forever terminated and shall have no further effect as to the Property or any transferee thereafter; provided, however, if the holder of such First Lender Deed of Trust acquired title to the Property pursuant to a deed or assignment in lieu of foreclosure, or if the First Lender's Deed of Trust is assigned to the Secretary, this Deed of Trust shall automatically terminate upon such acquisition of title or assignment to the Secretary provided that: (i) the City has been given written notice of default under such First Lender Deed of Trust; and (ii) the City shall not have cured or commenced to cure the default within such thirty (30) day period and given its firm commitment to complete the cure in the form and substance acceptable to the First Lender. Borrower agrees to record any necessary documents to effect such termination, if applicable. Remainder of Page Left Intentionally Blank 9 1010\17\2045536.2 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY Address: 579 Laguna Drive, Carlsbad, CA 92008 Assessor Parcel No.: 203-101-37-14 1010\17\2045536.2 For APN/Parcel ID(s): 203-101-37-14 EXHIBIT A Legal Description THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS: A CONDOMINIUM COMPRISED OF: A CONDOMINIUM LOCATED ON THE REAL PROPERTY DESCRIBED AS LOT 1 OF CITY OF CARLSBAD TRACT NO. 01-13, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 14797, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 17, 2004, AS INSTRUMENT NO. 2004-446317 OF OFFICIAL RECORDS, COMPRISED OF: PARCEL 1: UNIT 579, AS SHOWN UPON THAT CERTAIN CONDOMINIUM PLAN FOR LAGUNA POINT, AS RECORDED ON JUNE 27, 2005, AS INSTRUMENT NO. 2005-0538003, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, CALIFORNIA, ("CONDOMINIUM PLAN"). PARCEL 2: AN UNDIVIDED 1121ST INTEREST AS A TENANT IN COMMON IN THE UNDIVIDED INTEREST COMMON AREA AS SHOWN AND DEFINED ON THE CONDOMINIUM PLAN AND AS DESCRIBED IN THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR LAGUNA POINT HOMEOWNERS ASSOCIATION, RECORDED ON JUNE 27, 2005, AS INSTRUMENT NO. 2005-538002, IN THE OFFICE OF THE COUNTY RECORDER FOR SAN DIEGO COUNTY, CALIFORNIA ("DECLARATION"). THE UNDIVIDED INTEREST COMMON AREA WILL NOT BE OWNED BY LAGUNA POINT HOMEOWNERS ASSOCIATION, A CALIFORNIA NON-PROFIT MUTUAL BENEFIT CORPORATION ("ASSOCIATION"). PARCEL 3: NON-EXCLUSIVE EASEMENTS FOR INGRESS1, EGRESS, ACCESS, ENJOYMENT, USE AND SUPPORT OVER THE ASSOCIATION PROPERTY AS DESCRIBED IN THE DECLARATION AND INDICATED ON THE CONDOMINIUM PLAN, WHICH WILL BE OWNED BY THE ASSOCIATION. EXCEPTING THEREFROM THE FOLLOWING: (A) ALL UNITS, AS SHOWN UPON THE CONDOMINIUM PLAN OTHER THAN THE UNIT CONVEYED AS PARCEL 1 ABOVE. • (B) THE EXCLUSIVE RIGHT OF POSSESSION AND OCCUPANCY OF ALL THOSE AREAS DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY AS DESCRIBED IN THE DECLARATION AND AS SHOWN UPON THE CONDOMINIUM PLAN WHICH ARE SET ASIDE AND ALLOCATED FOR THE EXCLUSIVE USE OF OWNERS OF UNITS. (C) THE EASEMENT AND OTHER RIGHTS RESERVED IN FAVOR OF DECLARANT AS DESCRIBED IN THE DECLARATION AND ON THE CONDOMINIUM PLAN. PARCEL 4: THE EXCLUSIVE RIGHT TO POSSESSION AND OCCUPANCY OF THAT PORTION OF THE ASSOCIATION PROPERTY, DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY, AS SHOWN ON THE CONDOMINIUM PLAN, DESIGNATED AS D-579. PARCEL 5: EXHIBIT A Legal Description THE EXCLUSIVE RIGHT TO POSSESSION AND OCCUPANCY OF THAT PORTION OF THE ASSOCIATION PROPERTY, DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY, AS SHOWN ON THE CONDOMINIUM PLAN, DESIGNATED AS S-579. RECORDING REQUESTED BY: Recording Requested by: Fidelity National Title San Diego Office When Recorded Mail Document and Tax Statement To: David Armando Hamburger Hamburger and Maria Aracely Zapata Castrillon 579 Laguna Drive Carlsbad, CA 92008 Escrow No.: 9922406423 APN/Parcel ID(s): 203-101-37-14 The undersigned grantor(s) declare(s) GRANT DEED □ This transfer is exempt from the documentary transfer tax. 0 The documentary transfer tax is $186.45 and is computed on: 0 the full value of the interest or property conveyed. DOC# 2024-0220628 111111111111 lllll 111111111111111111111111111111111111111111111 IIII IIII Aug 19, 2024 01 :37 PM OFFICIAL RECORDS JORDAN Z. MARKS, SAN DIEGO COUNTY RECORDER FEES: $186.45 (SB2 Atkins: $0.00) PCO~: YES PAGES: 6 SPACE ABOVE THIS LINE FOR RECORDER'S USE □ the full value less the liens or encumbrances remaining thereon at the time of sale. The property is located in 0 the City of Carlsbad. FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, The City of Carlsbad hereby GRANT(S) to David Armando Hamburger Hamburger and Maria Aracely Zapata Castrillon, husband and wife as community property with right of survivorship the following described real property in the City of Carlsbad, County of San Diego, State of California: SEE EXHIBIT "A" ATTACHED HERETO AND MADE A PART HEREOF PROPERTY COMMONLY KNOWN AS: 579 Laguna Drive, Carlsbad, CA 92008 MAIL TAX STATEMENTS AS DIRECTED ABOVE Grant Deed SCA0000129.doc I Updated: 05.20.24 Printed: 08.05.24@ 10:59 AM CA-FT-FSDG-01500.07 4005-9922406423 APN/Parcel ID(s): 203-101-37-14 Dated: August 5, 2024 GRANT DEED (continued) IN WITNESS WHEREOF, the undersigned have executed this document on the date(s) set forth below. The City of Carlsbad BY:~ Q_ lr-- Geoff Patnoe, Assistant City Manager A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of ____________ _ County of ___________ _ On _____________ before me, __________________ , Notary Public, (here insert name and title of the officer) personally appeared ___________________________________ , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature Grant Deed SCA0000129.doc / Updated: 05.20.24 Printed: 08.05.24@ 10:59 AM CA-FT-FSDG-01500.07 4005-9922406423 II GOVERNMENT-CODE 27361.7 ll I CERTIFY UNDER PENAL TY OF PERJURY THAT THE· NOTARY ·SEAL ON THE DOCUMENT TO WHICH THIS.STATEMENT IS ATTACHED READS AS FOLLOWS: Name of the N_otary: __ G_e_o_ff_P_a_t_no_e ________________ _ Commission .Number:_2_3_7_3_0_7_1 _____ Date Commission Expires: 8-31-2025 County Where Bond is Filed: __ s_a_n_D_._I0_9_0 ______________ _ Manufacturer or Vendor Number: NNA1 • ------------------(Located on bo1h sides of the notary seal border} Signature:_~=1/JJ,,'-"-"'-"fll=+-"~....,_,.,· Mt~_J,...._J _______ _ Firm Name (if applicable) San Diego Place of Execution: Date: 8-16-2024 ---------------------- 1 Rec. Form 1/R 10 (Rev. 7/961 For APN/Parcel ID(s): 203-101-37-14 EXHIBIT "A" Legal Description THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS: A CONDOMINIUM COMPRISED OF: A CONDOMINIUM LOCATED ON THE REAL PROPERTY DESCRIBED AS LOT 1 OF CITY OF CARLSBAD TRACT NO. 01-13, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 14797, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 17, 2004, AS INSTRUMENT NO. 2004-446317 OF OFFICIAL RECORDS, COMPRISED OF: PARCEL 1: UNIT 579, AS SHOWN UPON THAT CERTAIN CONDOMINIUM PLAN FOR LAGUNA POINT, AS RECORDED ON JUNE 27, 2005, AS INSTRUMENT NO. 2005-0538003, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, CALIFORNIA, ("CONDOMINIUM PLAN"). PARCEL 2: AN UNDIVIDED 1121ST INTEREST AS A TENANT IN COMMON IN THE UNDIVIDED INTEREST COMMON AREA AS SHOWN AND DEFINED ON THE CONDOMINIUM PLAN AND AS DESCRIBED IN THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR LAGUNA POINT HOMEOWNERS ASSOCIATION, RECORDED ON JUNE 27, 2005, AS INSTRUMENT NO. 2005-538002, IN THE OFFICE OF THE COUNTY RECORDER FOR SAN DIEGO COUNTY, CALIFORNIA ("DECLARATION"). THE UNDIVIDED INTEREST COMMON AREA WILL NOT BE OWNED BY LAGUNA POINT HOMEOWNERS ASSOCIATION, A CALIFORNIA NON-PROFIT MUTUAL BENEFIT CORPORATION ("ASSOCIATION"). PARCEL 3: NON-EXCLUSIVE EASEMENTS FOR INGRESS, EGRESS, ACCESS, ENJOYMENT, USE AND SUPPORT OVER THE ASSOCIATION PROPERTY AS DESCRIBED IN THE DECLARATION AND INDICATED ON THE CONDOMINIUM PLAN, WHICH WILL BE OWNED BY THE ASSOCIATION. EXCEPTING THEREFROM THE FOLLOWING: (A) ALL UNITS, AS SHOWN UPON THE CONDOMINIUM PLAN OTHER THAN THE UNIT CONVEYED AS PARCEL 1 ABOVE. (8) THE EXCLUSIVE RIGHT OF POSSESSION AND OCCUPANCY OF ALL THOSE AREAS DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY AS DESCRIBED IN THE DECLARATION AND AS SHOWN UPON THE CONDOMINIUM PLAN WHICH ARE SET ASIDE AND ALLOCATED FOR THE EXCLUSIVE USE OF OWNERS OF UNITS. (C) THE EASEMENT AND OTHER RIGHTS RESERVED IN FAVOR OF DECLARANT AS DESCRIBED IN THE DECLARATION AND ON THE CONDOMINIUM PLAN. PARCEL 4: THE EXCLUSIVE RIGHT TO POSSESSION AND OCCUPANCY OF THAT PORTION OF THE ASSOCIATION PROPERTY, DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY, AS SHOWN ON THE CONDOMINIUM PLAN, DESIGNATED AS 0-579. Grant Deed SCA0000129.doc I Updated: 05.20.24 Printed: 08.05.24@ 10:59 AM CA-FT-FSDG-01500.07 4005-9922406423 PARCEL 5: EXHIBIT "A" Legal Description ( continued) THE EXCLUSIVE RIGHT TO POSSESSION AND OCCUPANCY OF THAT PORTION OF THE ASSOCIATION PROPERTY, DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY, AS SHOWN ON THE CONDOMINIUM PLAN, DESIGNATED AS S-579. Grant Deed SCA0000129.doc I Updated: 05.20.24 Printed: 08.05.24@ 10:59 AM CA-FT-FSDG-01500.07 4005-9922406423 Recording Requested by: Fidelity National Title San Diego Office Recording requested by and when recorded mail to: City of Carlsbad Housing Services Manager 1200 Carlsbad Village Drive Carlsbad, CA 92008 No fee for recording pursuant to Government Code Section 27383 DOC# 2024-0220630 111111111111 lllll 111111111111111111111111111111111111111111111 IIII IIII Aug 19, 2024 01 :37 PM OFFICIAL RECORDS JORDAN Z. MARKS, SAN DIEGO COUNTY RECORDER FEES: $0.00 (SB2 Atkins: $0.00) PCOR: N/A PAGES: 35 DECLARATION OF RESTRICTIVE COVENANTS REGARDING RESTRICTIONS ON TRANSFER OF PROPERTY, OCCUPANCY RESTRICTIONS, REFINANCING RESTRICTIONS, AND OPTION TO PURCHASE (City of Carlsbad Affordable Housing Resale Program) Owners: David Armando Hamburger Hamburger and Maria Aracely Zapata Castrillon Address of Property: 579 Laguna Dr. Carlsbad, CA 92008 Note to Owner: This document contains provisions restricting your ability to sell this property and obtain junior financing. This Declaration of Restrictive Covenants Regarding Restrictions on Transfer of Property, Occupancy Restrictions, Refinancing Restrictions and Option to Purchase ("Resale Restriction Agreement") is entered into as of this 2nd day of AuguSt , 2024, by and between the City of Carlsbad, a municipal corporation (the "City"), and David Armando Hamburger Hamburger and Maria Aracely Zapata Castrillon, husband and wife as community property with right of survivorship ("Owner"). RECITALS A. The City has developed a second mortgage program designed to assist qualified lower income households purchase their homes located within the City of Carlsbad ("Affordable Housing Resale Program "). B. In connection with the Affordable Housing Resale Program and in fulfillment of its inclusionary obligation pursuant to an Affordable Housing Agreement ("Affordable Housing Agreement") between Wave Crest Resorts II, LLC, a California limited liability company entered into November 17, 2003. Developer made a subsidy loan ("Homebuyer Loan") to allow for the purchase of a home by a low-income household located in Carlsbad, California on that certain real property and more particularly described in Exhibit A ("Property") and then assigned the Homebuyer Loan to the City. C. As used herein, the term "Property" includes both the real property and all improvements now or hereafter erected thereon (including, but not limited to the residential ~ Exempt from fee per GC27388.1 due to being recorded in connection with concurrent transfer that is subject to the imposition of documentary transfer l'lx. dwelling unit), and all easements, rights, appurtenances, and all fixtures now or hereafter attached thereto. D. The "Original Affordable Purchase Price" of the Property is One Hundred Sixty- Nine Thousand Three Hundred Eighty-Four Dollars ($169,384). The Original Affordable Purchase Price is the effective price of the Property paid by the Owner. The actual price of the Property is equal to the Original Affordable Purchase Price plus the amount of the Promissory Note ("Full Purchase Price"). Owner is a low-income household. E. The Homebuyer Loan is Sixty-Six Thousand Six Hundred and Sixteen Dollars ($660,616). The Homebuyer Loan is evidenced by a promissory note in the amount of the Loan ("City Note"). This Agreement and the City Note shall be secured by a deed of trust ("City Deed of Trust") subordinate to the lien of First Lender Deed of Trust. F. The purpose of this Agreement is to place resale controls on the Property, to provide the City an option to purchase the Property at a restricted price, and to ensure that the Owner complies with the Affordable Housing Resale Program requirements. G. This Agreement and the City Note require repayment of the Homebuyer Loan plus contingent interest and, in certain instances, payment of excess proceeds of sale. This Agreement will remain in full effect as an encumbrance on the Property after any prepayment of the City Note by the Owner. NOW, THEREFORE, in consideration of the benefits received by the Owner and the City, the Owner and the City agree, as follows: 1. DEFINITIONS AND EXHIBITS A. The following terms are specifically defined for this Agreement and their definitions can be found in the Sections indicated below: (1) "Affordable Sales Price" -Section 14A(l). (2) "Agreement" -first sentence of the Agreement on page 1. (3) "City" -first sentence of the Agreement on page 1. (4) "City Deed of Trust" -Recital F. (5) "City Designated Purchaser" -Section 12B. (6) "City Note" -Recital F. (7) "City Option" -Section 12A. (8) "City Response Notice" -Section 10. (9) "Default" -Section 18 (10) "Eligible Purchaser" Section 15B. (11) "Excess Sales Proceeds" -Section 16. (12) "Fair Market Value" -Section 14B. (13) "First Lender" -Recital E. (14) "First Lender Deed of Trust" or "First Mortgage"-Recital E. (15) "First Lender Loan" -Recital E. (16) "Full Purchase Price" -Recital D. (17) "Full Sales Price" -Section 14A. (18) "Homebuyer Loan" -Recital B. (19) "HUD" -Section 30. (20) "Market Purchaser" -Section 1 0C. (21) "Maximum Restricted Resale Price" -Section 14. (22) "Median Income" -Section 14A. (23) "Official Records" -Recital E. (24) "Original Affordable Purchase Price" -Recital D. (25) "Owner" -first sentence of the Agreement on page 1. (26) "Owner's Notice oflntent to Transfer" -Section 8. (27) "Property" -Recital B. (28) "Proposed Purchaser" -Section 15A. (29) "Transfer" -Section 7. (30) "Unauthorized Rental Proceeds" -Section 4. B. The following Exhibits are attached to this Agreement: (1) (2) Exhibit A: Exhibit B: Legal Description of Property Form of Owner Occupancy Certification (3) (4) (5) (6) Exhibit C: Exhibit D: Exhibit E: Exhibit F: 2. OWNER CERTIFICATIONS Form of Owner's Notice oflntent to Transfer Form of City Response Notice Form of Owner Acknowledgement of City Response Notice Form of Owner Request for City Subordination to Refinanced First Lender Loan The Owner certifies that: (i) the financial and other information previously provided in order to qualify to purchase the Property is true and correct as of the date first written above; (ii) the Owner is an Eligible Purchaser; (iii) the Owner has disclosed all individuals that shall reside at the Property; and (iv) the Owner shall occupy the Property as the Owner's principal place of residence. 3. OCCUPANCY OF PROPERTY The Owner shall occupy the Property as the Owner's principal place of residence within sixty (60) days after the close of escrow on the Homebuyer Loan. Failure by the Owner to occupy the Property as the Owner's principal place of residence shall constitute a Default under this Agreement for which the City may exercise its option to purchase pursuant to Section 21 below. The Owner shall be considered as occupying the Property if the Owner is residing at the Property for at least ten ( 10) months out of each calendar year. The Owner shall provide an annual written certification in the form shown in the attached Exhibit B, to the City that the Owner is occupying the Property as his or her principal place of residence and listing all occupants residing at the Property. No later than ten (10) days after receipt of the City's written request, the Owner shall provide any additional information and documents which the City requests including but not limited to tax returns and bank statements, which may evidence whether the Owner is occupying the Property. Failure to provide any additional information or documentation requested shall constitute a Default under this Agreement. 4. NO LEASING OF PROPERTY The Owner shall not lease all, or any portion of, the Property to another party. Any lease, sublease, or any other renting of the Property to a third-party is prohibited and shall be a Default under this Agreement and the City Deed of Trust. For the avoidance of doubt, the City and the Owner agree' and acknowledge that: (i) the Property (or any portion of the Property) is prohibited from being used a "short-term vacation rental" (as such term is defined in Chapter 5.60 of the City of Carlsbad Municipal Code, as may be amended from time to time); (ii) no portion of the Property may be used for tourist or transient use, or any other short-term rental of the Property; and (iii) listing the Property on any "hosting platform" (as defined in California Business & Professions Code 22590, as may be amended from time to time), including, but not limited to any Internet-based "hosting platform", such as "airbnb.com", or any similar service, is prohibited. All proceeds derived from any leasing, subleasing, or any other activity prohibited by this Section are defined as "Unauthorized Rental Proceeds". In addition to all other available rights and remedies set forth in this Agreement, in the event of violation of this Section, the Owner shall pay to the City all Unauthorized Rental Proceeds in accordance with Section 19. 5. HOMEBUYER EDUCATION CLASS The Owner successfully completed a homebuyer education course offered by One Neighborhood Builders. 6. MAINTENANCE AND INSURANCE PROCEEDS A. The Owner shall maintain the Property, including landscaping, in good repair and in a neat, clean and orderly condition and will not commit waste or permit deterioration of the Property. Failure by the Owner to maintain the Property shall constitute a Default under this Agreement for which the City may exercise the City Option to purchase the Property pursuant to Section 21 below. B. The Owner shall maintain a standard fire and extended coverage home insurance policy equal to the replacement value of the Property (adjusted every five (5) years by appraisal, ifrequested by City), naming the City as an additional insured. Additional insurance requirements are set forth in Section 6 of the City Deed of Trust. 7. TRANSFER AND SALE RESTRICTIONS Any Transfer of the Property will be subject to the provisions of this Agreement including, without limitation, exercise of the City Option pursuant to Section 12 below. "Transfer" shall mean any sale, assignment or transfer, voluntary or involuntary, of any interest in the Property, including, but not limited to, a fee simple interest, a joint tenancy interest, tenancy in common interest, a life estate, a leasehold interest, an interest evidenced by a land contract by which possession of the Property is transferred and Owner retains title. Any Transfer without satisfaction of the provisions of this Agreement is prohibited. A Transfer shall not include a transfer: (i) to an existing spouse who is also an obliger under the City Note; (ii) by the Owner to a spouse where the spouse becomes the co-owner of the Property; (iii) between spouses as part of a marriage dissolution proceeding; (iv) to an existing spouse of Owner by devise or inheritance following the death of Owner; (v) by Owner into an inter vivos revocable trust in which Owner is the Truster; or (vi) refinance of the First Mortgage meeting the requirements of Section 28 of this Agreement; provided, however, that Owner shall provide written notice of all such transfers to City pursuant to Section 8 below; and Owner shall continue to occupy the Property as his or her principal place of residence ( except where the transfer occurs pursuant to subsection (iii) or (iv) above, in which event the transferee shall owner-occupy the Property and affirmatively assume Owner's obligations under this Agreement, the City Note and the City Deed of Trust). 8. NOTICE OF INTENDED TRANSFER A. In the event the Owner intends to transfer (including without limitation all "Transfers" as defined in Section 7) or vacate the Property, the Owner shall promptly give the City written notice of such intent (the "Owner's Notice of Intent to Transfer") in the form shown in the attached Exhibit C. The Owner shall give the City the Owner's Notice oflntent to Transfer prior to notifying real estate brokers or lenders of Owner's intent to Transfer the Property and prior to listing of the Property on the Multiple Listing Service. The Owner's Notice of Intent to Transfer shall be sent to the City in the manner and at the address provided in Section 32 of this Agreement. The Owner's Notice of Intent to Transfer shall include the information necessary for the City to determine the Maximum Restricted Resale Price of the Property, including the following information: (1) the address of the Property; (2) the date of purchase of the Property by the Owner; (3) the Original Affordable Purchase Price of the Property; (4) the Full Purchase Price of the Property (which is the Original Affordable Purchase Price plus the original amount of the Homebuyer Loan). (5) a copy of the HUD-1 Settlement Statement or equivalent document from the close of escrow on the Owner's purchase of the Property; ( 6) the date on which Owner intends to vacate Property; (7) the name and phone number of the person to contact to schedule inspection of the Property by the City. 9. OWNER PREPARATION OF PROPERTY FOR SALE A. The Owner may not wish to contract with a real estate broker to sell the Property until the Owner has received the City Response Notice pursuant to Section 10 below, as the services of a broker will not be required if the City exercises the City Option to purchase the Property pursuant to Section 12 below. B. Following delivery to the City of the Owner's Notice oflntent to Transfer, the Owner shall prepare the Property for sale, as follows: (1) within thirty (30) days of delivery of the Owner's Notice oflntent to Transfer, the Owner shall obtain and deliver to the City a current written report of inspection of the Property by a licensed structural pest control operator; (2) within the sooner of: (a) sixty (60) days from the date of delivery of the Owner's Notice of Intent to Transfer; or (b) prior to close of escrow on the Transfer, the Owner shall repair all damage noted in the pest report including damage caused by infestation or infection by wood-destroying pests; (3) within thirty (30) days of the date of the Owner's Notice of Intent to Transfer, the Owner shall allow the City to inspect the Property to detennine its physical condition; (4) if the Property is vacant, the Owner shall maintain utility connections until the close of escrow on the Transfer; and (5) the Owner shall not remove any kitchen appliances prior to vacating the Property without the City approving such removal; in the event the City approves the removal of any kitchen appliances the Owner shall replace said appliances with new and comparable appliances; and ( 6) in the event of purchase of the Property by the City or City Designated Purchaser, the Owner shall permit a final walk-through of the Property by the City or City Designated Purchaser, in the final three (3) days prior to close of escrow on the Transfer. 10. CITY RESPONSE TO OWNER'S NOTICE OF INTENDED TRANSFER City shall respond in writing (the "City Response Notice") to the Owner's Notice of Intent to Transfer. The form of City Response Notice is attached as Exhibit D. The City Response Notice shall inform the Owner of the City's election to proceed under one (1) of the following two (2) alternatives: A. City Exercise of City Purchase Option. The City Response Notice may notify the Owner that the City or a City Designated Purchaser elects to exercise the City Option to purchase the Property. The City Response Notice shall be sent within thirty (30) days of City receipt of Owner's Notice oflntent to Transfer and shall include the City's calculation of the: (i) Maximum Restricted Resale Price pursuant to Section 14 below to be paid by the City or a City Designated Purchaser; and (ii) the transaction fee to be paid by the Owner pursuant to Section 12 below; B. Owner Sale at a Restricted Sales Price to Eligible Purchaser. Alternatively, the City Response Notice may notify the Owner that the City or a City Designated Purchaser will not exercise the City Option to purchase the Property. In this case, the City Response Notice shall inform the Owner that the Owner may proceed to sell the Property to an Eligible Purchaser at a price not to exceed the Maximum Restricted Resale Price, as set forth in Section 14 and pursuant to the procedure set forth in Section 14 below. In this event, the City Response Notice shall include the following information: (1) the maximum qualifying income for an Eligible Purchaser (which shall be the same income category as the Owner at the time of the Owner's purchase); (2) the certifications required of an Eligible Purchaser; (3) the Maximum Restricted Resale Price the Owner may receive for the Property, calculated by the City pursuant to Section 14 below; (4) whether Affordable Housing Resale Program assistance from the City may be available to an Eligible Purchaser; and (5) Owner's repayment obligation as required by Section 13; and 11. OWNER ACKNOWLEDGEMENT OF CITY RESPONSE NOTICE No later than seven (7) days following the date of the City Response Notice, the Owner shall acknowledge in writing to the City, in the form shown in the attached Exhibit E, that he/she has received the City Response Notice and still intends to Transfer the Property. 12. CITY PURCHASE OPTION A. The Owner agrees that if the Owner decides to Transfer the Property, the City shall have the option to purchase the Property for the Maximum Restricted Resale Price calculated pursuant to Section 14 of this Agreement (the "City Option"). The Owner shall pay the City a transaction fee up to six percent ( 6%) of the Maximum Restricted Resale Price if the City or a City Designated Purchaser exercises the City Option and purchases the Property. The City Option may be exercised by the City or by a City Designated Purchaser in the City Response Notice. If the City Response Notice notifies the Owner that the City or a City Designated Purchaser will exercise the City Option to purchase the Property, the City or the City Designated Purchaser shall purchase the Property within ninety (90) days of the date of the City Response Notice and title shall be delivered by the Owner to the City by grant deed free and clear of any mortgage or other liens, unless approved in writing by the City. B. The City may assign the City Option to another public agency, a nonprofit corporation, or an Eligible Purchaser selected by the City (any of which shall be referred to herein as a "City Designated Purchaser"). If the City assigns the City Option to a City Designated Purchaser, the City Response Notice shall be executed by the City Designated Purchaser and shall notify the Owner that a City Designated Purchaser is exercising the City Option in lieu of the City. C. In the event of exercise of the City Option and purchase of the Property by the City or a City Designated Purchaser, the Owner shall permit a final walk-through of the Property by the City or the City Designated Purchaser in the final three (3) days prior to close of escrow on the Transfer. 13. REPAYMENT OF CITY NOTE Upon any Transfer of the Property, the outstanding principal and interest due under the City Note shall be repaid pursuant to the City Note unless: (i) such principal and interest is assumed by an Eligible Purchaser in accordance with Section 9 of the City Note; or (ii) the City exercises the City Option to purchase the Property, in which event the outstanding amount of principal and Contingent Interest due under the City Note shall be paid to the City in the form of a credit against the purchase price to be paid by the City to the Owner. Repayment of the City Note shall not affect Owner's obligation to comply with this Agreement, which shall remain in full force and effect following any repayment of the City Note. 14. DETERMINATION OF MAXIMUM RESTRICTED RESALE PRICE The maximum sales price that the Owner shall receive from the resale of the Property to the City or City Designated Purchaser, or from other sale or Transfer by the Owner when the Owner sends the Notice oflntent to Transfer (the "Maximum Restricted Resale Price") shall be the Full Sales Price or the Fair Market Value, whichever is less. A. Full Sales Price. (1) The Full Sales Price of the Property means: (a) the Affordable Sales Price; plus (b) the principal and contingent interest then due on the City Note. The Affordable Sales Price means the Original Affordable Purchase Price, as set forth in Recital D to this Agreement, increased by the percentage of increase in the Median Income from the date of the original purchase of the Property by the Owner to the date of receipt by the City of the Owner's Notice of Intent to Transfer. "Median Income" shall refer to the median yearly income, adjusted for a household size of four, in San Diego County, as published by the California Department of Housing and Community Development ("HCD"), or, in the event such income determination is no longer published by HCD, or has not been updated for a period of at least eighteen (18) months, the City may use or develop such other reasonable method as it may choose in order to detennine the median yearly income in San Diego County. As of the date of Owner's purchase of the Property, the Median Income for a household of four persons is One Hundred Nineteen Thousand Five Hundred Dollars ($119,500). (2) The Affordable Sales Price shall include a downward adjustment, where applicable, in an amount necessary to repair any violations of applicable building, plumbing, electric, fire or housing codes or any other provisions of the City of Carlsbad Building Code, as well as any other repairs needed to put the Property into a "sellable condition". Items necessary to put a Property into sellable condition shall be determined by the City, and may include cleaning, painting and making needed structural, mechanical, electrical, plumbing and fixed appliance repairs and other deferred maintenance repairs. B. Fair Market Value. In certain circumstances it may be necessary to determine the fair market value of the Property without taking account of the resale restrictions imposed by this Agreement (the "Fair Market Value"). These circumstances include but are not limited to: (1) where the parties wish to determine if the Full Sales Price exceeds the Fair Market Value in order to determine the Maximum Restricted Resale Price pursuant to this section; (2) where the parties wish to determine if the sales price of the Property to a Market Purchaser is comparable to the Fair Market Value; and (3) to calculate the amount due under the City Note at the end of the term of the City Note or upon prepayment. If it is necessary to 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 City. 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 Owner, unless the appraisal is obtained from a new purchaser. Nothing in this section shall preclude the Owner and the City from establishing the Fair Market Value of the Property by mutual agreement in lieu of an appraisal pursuant to this section. 15. SALE BY OWNER IF CITY DOES NOT EXERCISE OPTION TO PURCHASE In the event the City Response Notice notifies the Owner to proceed to sell the Property to an Eligible Purchaser at a price not exceeding the Maximum Restricted Resale Price, the Owner may proceed to sell the Property in compliance with the following requirements: A. Marketing. The Owner shall use bona fide good faith efforts to sell the Property to an Eligible Purchaser in compliance with this section, including listing the Property on the Multiple Listing Service, keeping the Property in an orderly condition, making the Property available to show to agents and prospective buyers, and providing buyers with Eligible Purchaser requirements, including income qualifications and the City's form of disclosure statement summarizing the terms of the buyer's occupancy and resale restriction agreement with option to purchase. A proposed purchaser ("Proposed Purchaser") who the Owner believes will qualify as an Eligible Purchaser shall be referred to the City for an eligibility determination. If the Proposed Purchaser qualifies as an Eligible Purchaser the City will also determine if such Eligible Purchaser is eligible for City housing-related financial assistance that may be available at the time of resale. B. Eligible Purchaser. A Proposed Purchaser shall qualify as an "Eligible Purchaser" if he or she meets the following requirements, as determined by the City: (1) Income Eligibility. The combined maximum income for all household members of the Proposed Purchaser shall not exceed the income level designated by the City in the City Response Notice. (2) Intent to Owner Occupy. The Proposed Purchaser shall certify that he or she will occupy the Property as to his or her principal place of residence throughout his or her ownership. Co-signers who will not occupy the property are prohibited. (3) Agreement to Sign Resale Restriction Agreement and to Cooperate with the City. The Proposed Purchaser shall agree to sign a resale restriction agreement restricting future resale of the Property and shall agree to cooperate fully with the City in promptly providing all information requested by the City to assist the City in monitoring the Proposed Purchaser's compliance with the resale restriction agreement. C. Maximum Restricted Resale Price. The purchase price for the sale of the Property by the Owner to the Eligible Purchaser shall not exceed the Maximum Restricted Resale Price calculated by the City pursuant to Section 14 above, as set forth in the City Response Notice. The closing costs paid by the Eligible Purchaser shall not exceed reasonable customary buyer's closing costs in the County of San Diego. Pursuant to Section 13 of this Agreement and Section 9 of the City Note, the Eligible Purchaser may assume the Homebuyer Loan and the effective purchase price that the Eligible Purchaser will pay for the Property is anticipated to be the Affordable Sales Price. D. Disclosure and Submittals. The Owner and the Proposed Purchaser shall provide the following information and documents to the City: (1) The name, mailing address, telephone number, and email address in writing of the Proposed Purchaser. (2) A signed financial statement of the Proposed Purchaser in a form acceptable to the City and any other supporting documentation requested by the City. The financial infonnation shall be used by the City to determine the income eligibility of the Proposed Purchaser. (3) The proposed sales contract and all other related documents which shall set forth all the terms of the sale of the Property. Said documents shall include at least the following terms: (a) the sales price; and (b) the price to be paid by the Proposed Purchaser for the Owner's personal Property, if any, for the services of the Owner, if any, and any credits, allowances or other consideration, if any. (4) A written certification, from the Owner and the Proposed Purchaser in a form acceptable to the City that the sale shall be closed in accordance with the terms of the sales contract and other documents submitted to and approved by the City. The certification shall also provide that the Proposed Purchaser or any other party has not paid and will not pay to the Owner, and the Owner has not received and will not receive from the Proposed Purchaser or any other party, money or other consideration, including personal property, in addition to what is set forth in the sales contract and documents submitted to the City. The written certification shall also include a provision that in the event a Transfer is made in violation of the terms of this Agreement or false or misleading statements are made in any documents or certification submitted to the City, the City shall have the right to foreclose on the Property or file an action at law or in equity as may be appropriate. In any event, any costs, liabilities or obligations incurred by the Owner and the Proposed Purchaser for the return of any moneys paid or received in violation of this Agreement or for any of the Owner's and/or the Proposed Purchaser's costs and legal expenses, shall be borne by the Owner and/or the Proposed Purchaser and they shall hold the City harmless and reimburse the City's expenses, legal fees and costs for any action they reasonably take in good faith in enforcing the terms of this Agreement. (5) An executed buyer's resale restriction agreement and deed of trust to the City from the Proposed Purchaser in forms provided by the City. If the Proposed Purchaser is receiving assistance from the Affordable Housing Resale Program, a promissory note to the City shall also be required. The recordation of the new deed of trust and buyer's resale restriction agreement shall be a condition of the City's approval of the proposed sale. (6) The name of the title company escrow holder for the sale of the Property, the escrow number, and name, address, and phone number of the escrow officer. (7) Upon the close of the proposed sale, certified copies of the recorded City deed of trust and buyer's resale restriction agreement, a copy of the final sales contract, settlement statement, escrow instructions, and any other documents which the City may reasonably request. 16. PAYMENT TO CITY OF EXCESS SALES PROCEEDS If the Owner makes a Transfer in violation of this Agreement at any time, the Owner shall pay the Excess Sales Proceeds to the City. If the Owner Transfers the Property in violation of this Agreement, the Appreciation Amount (as such term is defined in the City Note) shall be calculated using the Maximum Restricted Resale Price of the Property, rather than the actual sales price. For purposes of this Agreement, "Excess Sales Proceeds" shall mean ninety-four percent (94%) of the amount by which the gross sales proceeds received by the Owner from the new purchaser exceed the Maximum Restricted Resale Price for the Property. This amount shall be a debt of the Owner to the City, further evidenced by the City Note, and secured by the City Deed of Trust. The Owner acknowledges that the City shall have no obligation to cause the release and termination of this Agreement, or the reconveyance of the City Deed of Trust, until the Excess Sales Proceeds are paid to the City. The City shall utilize the Excess Sales Proceeds for City affordable housing programs. The Owner and the City acknowledge that the formula for calculation of the amount of Excess Sales Proceeds due from the Owner to the City is intended to cause the Owner to receive the same net sales proceeds (following payment by Owner of a standard broker's commission) from sale of the Property at an unrestricted price to a market purchaser (in violation of this Agreement) as the Owner would receive from sale of the Property to the City, City Designated Purchaser or to an Eligible Purchaser at the Maximum Restricted Resale Price. 17. DEFAULTS A. A Default by the Owner is any failure to comply with the requirements of this Agreement, the City Note or the City Deed of Trust, whether by commission or omission which includes, but is not limited to the following: ( 1) The City determines that the Owner has made a misrepresentation to obtain the benefits of purchase of the Property or in connection with its obligations under this Agreement. (2) The Owner fails to owner occupy the Property, as required pursuant to Section 3 above, and such failure continues following written notice by the City and sixty (60) days opportunity to cure following the date of such notice. (3) The Owner rents all or a portion of the Property in violation of Section 4 above, and such failure continues following written notice by the City and sixty (60) days opportunity to cure. (4) The Owner fails to provide information or documents to the City that the City deems necessary to determine Owner's compliance with the requirements of this Agreement. (5) The Owner makes a Transfer in violation of this Agreement. ( 6) A notice of default is issued under First Lender Loan. (7) A lien is recorded in the Official Records against the Property other than the First Mortgage. (8) Owner records a deed of trust against the Property in the Official Records, or otherwise places a mortgage on the Property in violation of Section 28 below. (9) Owner declares bankruptcy or makes an assignment of assets for the benefit of creditors. B. Upon a declaration of Default by the City under this Agreement, the City may exercise any remedies at law or in equity, including without limitation, any or all of the following: (1) Declare all Excess Sales Proceeds immediately due and payable without further demand, accelerate payments due under the City Note and invoke the power of sale under the City Deed of Trust; (2) Apply to a court of competent jurisdiction for such relief at law or in equity as may be appropriate, including, but not limited to specific performance. (3) Declare a Default under the City Note and the City Deed of Trust and pursue all City remedies under the City Note and the City Deed of Trust; and (4) Exercise the City Option upon Default as described in Section 21, below. Owner acknowledges that any breach in Owner's performance of Owner's obligations under this Agreement shall cause irreparable harm to the City. Therefore, Owner agrees that the City is entitled to equitable relief in the form of specific performance upon its exercise of the City Option set forth in Section 21, below, and that an award of damages may not be adequate to compensate the City for Owner's failure to perform according to the terms of this Agreement. The City, in its sole and absolute discretion, may elect the appropriate remedy for Owner's default under this Agreement. 18. NOTICE AND CURE Upon a violation of any of the provisions of this Agreement, the City Note or the City Deed of Trust, the City shall give written notice to the Owner specifying the nature of the violation and demanding a cure. If the violation is not corrected to the satisfaction of the City within a reasonable period of time, not longer than thirty (30) days from the date the notice is mailed, or within such further time as the City determines is necessary to correct the violation, or if the Owner is in default under the First Mortgage, the City may declare a Default under this Agreement. If the violation is failure to occupy the Property, as set forth in Section 3, or any rental of the Property or any other act prohibited by Section 4, then Owner shall be given sixty (60) days from the date the notice is mailed to correct that violation, and, to the extent applicable, remit all Unauthorized Rental Proceeds to the City before the City may declare a Default. The City shall notify First Lender at the address provided by the First Lender to the City in the manner set forth in Section 33 of this Agreement, if the City has declared a Default under this Agreement or under the City Note or City Deed of Trust. 19. NOTICE TO CITY OF DEFAULT A request for notice of default and any notice of sale under any deed of trust or mortgage with power of sale encumbering the Property shall be recorded by the City in the Official Records for the benefit of the City. The City may declare a default under this Agreement upon receipt of any notice given to the City pursuant to Civil Code Section 2924b and may exercise its rights as provided in Sections 18 and 21. In the event of default and foreclosure under the First Lender Loan or any other mortgage loan on the Property, the City shall have the same right as the Owner to cure defaults and redeem the Property prior to the foreclosure sale. Nothing herein shall be construed as creating any obligation of the City to cure any such default, nor shall this right to cure and redeem operate to extend any time limitations in the default provisions of the underlying deed of trust or mortgage. If the City failed to file the request for notice of default, the City's right to purchase the Property shall commence from the date a notice of default is given by the City to the Owner. 20. PURCHASE OPTION UPON DEFAULT A. Purchase Option. Notwithstanding, and in addition to, the remedies provided the City in Section 18, and the City Purchase, Option provided in Section 12, the Owner hereby grants to the City or the City Designated Purchaser the option to purchase the Property effective upon the declaration of a Default by the City pursuant to Section 18 and Section 19 above, and subject to notice and cure rights set forth in Section 19. B. Exercise of Option. The option to purchase may be exercised upon a Default under this Agreement or upon default under any promissory note, deed of trust or any other lien, including a judgment lien, recorded against the Property. The City shall have thirty (30) days after a Default is declared to notify the Owner and the First Lender of its decision to exercise its option to purchase. Not later than ninety (90) days after the notice is given by the City to the Owner of the City's intent to exercise its option, the City shall purchase the Property for the Maximum Restricted Resale Price set forth in Section 14. The City may assign its rights to purchase the Property under this section to a City Designated Purchaser. 21. NONLIABILITY OF THE CITY A. No Obligation to Exercise Option. The City shall have no obligation to exercise any option granted it under this Agreement. In no event shall the City become in any way liable or obligated to the Owner or any successor-in-interest to the Owner by reason of its option to purchase under Sections 12 and 21 nor shall the City be in any way obligated or liable to the Owner or any successor-in-interest to the Owner for any failure to exercise its option to purchase. B. Nonliability for Negligence, Loss, or Damage. Owner acknowledges, understands and agrees that the relationship between Owner and the City is solely that of an owner and an administrator of a City inclusionary housing program, and that the City does not undertake or assume any responsibility for or duty to Owner to select, review, inspect, supervise, pass judgment on, or inform Owner of the quality, adequacy or suitability of the Property or any other matter. The City owes no duty of care to protect Owner against negligent, faulty, inadequate or defective building or construction or any condition of the Property and Owner agrees that neither Owner, or Owner's heirs, successors or assigns shall ever claim, have or assert any right or action against the City for any loss, damage or other matter arising out of or resulting from any condition of the Property and will hold the City harmless from any liability, loss or damage as set forth in Section 22( c ). Any review by the City of any documents submitted by the Owner to the City pursuant to this Agreement, including, but not limited to any purchase and sale agreement for the Property, is solely to confirm compliance with the requirements of this Agreement and shall not be deemed to be a representation of any kind of the validity or legal enforceability of such document(s). C. Indemnity. Owner agrees to defend (with counsel reasonably selected by the City), indemnify, and hold the City harmless from all losses, damages, liabilities, claims, actions, judgments, and costs, including expenses, and reasonable attorneys' fees that the City may incur, as a direct or indirect consequence of: (1) Owner's default, performance, or failure to perform any obligations as and when required by this Agreement, the City Note, or the City Deed of Trust; or (2) the failure at any time of any of Owner's representations to the City to be true and correct. This provision shall survive the termination or expiration of this Agreement, and the reconveyance of the City Deed of Trust. 22. RESTRICTIONS ON FORECLOSURE PROCEEDS If a creditor acquires title to the Property through a deed in lieu of foreclosure, a trustee's deed upon sale, or otherwise, the Owner shall not be entitled to the proceeds of sale to the extent that such proceeds otherwise payable to the Owner when added to the proceeds paid or credited to the creditor exceed the Maximum Restricted Resale Price. The Owner shall instruct the holder of such excess proceeds (in addition to other amounts due to the City pursuant to the City Note and this Agreement) to pay such proceeds to the City in consideration of the benefits received by the Owner through purchase of the Property under this Agreement. 23. RESTRICTION ON INSURANCE PROCEEDS If the Property is damaged or destroyed and the Owner elects not to rebuild or repair the Property, the Owner shall pay the City the portion of any insurance proceeds received by the Owner for such destruction or damage which is in excess of the Maximum Restricted Resale Price calculated pursuant to Section 14 above. 24. TERM OF AGREEMENT All the provisions of this Agreement, including the benefits and burdens, run with the land and the Property and this Agreement shall bind, and the benefit hereof shall inure to, the Owner, his or her heirs, legal representatives, executors, successors in interest and assigns, and to the City and its successors until the earlier of: (i) thirty (30) years from the date ofrecordation of this Agreement in the Official Records; or (ii) the date of Transfer of the Property to the City or another purchaser in compliance with this Agreement (including execution by the purchaser of a new resale restriction agreement for the benefit of the City). 25. SUPERIORITY OF AGREEMENT The Owner covenants that he or she has not, and will not, execute any other agreement with provisions contradictory to or in opposition to the provisions of this Agreement hereof, and that, in any event, this Agreement is controlling as to the rights and obligations between and among the Owner, the City and their respective successors. 26. SUBORDINATION Notwithstanding any other provision hereof, the provisions of this Agreement shall be subordinate to the lien of the First Lender Loan and shall not impair the rights of the First Lender, or the First Lender's successor or assign, to exercise its remedies under the First Lender Deed of Trust in the event of default under the First Lender Deed of Trust by the Owner. Such remedies under the First Lender Deed of Trust include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. After such foreclosure or acceptance of a deed or assignment in lieu of foreclosure, this Agreement shall be forever terminated and shall have no further effect as to the Property or any transferee thereafter; provided, however, if the holder of such First Lender Deed of Trust acquired title to the Property pursuant to a deed or assignment in lieu of foreclosure, this Agreement shall automatically terminate upon such acquisition of title, provided that: (i) the City has been given written notice of default under such First Lender Deed of Trust; and (ii) the City shall not have cured or commenced to cure the default within such thirty (30) day period and given its firm commitment to complete the cure in the form and substance acceptable to the First Lender. Owner agrees to record any necessary documents to effect such termination, if applicable. 27. REFINANCE OF FIRST LENDER LOAN The outstanding principal on the City Note shall not be due upon prepayment and refinancing of the First Lender Loan, and this Agreement and the City Deed of Trust shall be subordinated to the refinanced First Lender Loan, provided that: (i) such refinancing is approved by the City; (ii) the amount refinanced does not exceed the outstanding principal balance of the First Mortgage at the time of refinance plus reasonable costs of refinance; and (iii) the refinance does not result in higher monthly payments on the First Lender Loan than were due prior to the refinance. Mortgage loans or equity lines of credit junior in lien priority to the City Deed of Trust are not permitted. Owner acknowledges that such prohibition 011 junior liens was granted in consideration for the receipt of the Homebuyer Loan on favorable terms that have assisted the Owner acquire the Property for Original Affordable Purchase Price, and that without such financial assistance from the City, the Owner would not be able to pay the Original Affordable Purchase Price, or otherwise acquire the Property. The City and the Owner agree that the requirements of this section are necessary to ensure the continued affordability of the Property to Owner and to minimize the risk ofloss of the Property by Owner through default and foreclosure of mortgage loans. Owner further acknowledges that violation of the provisions of this section shall constitute a Default under this Agreement. A form for use by the Owner in requesting City subordination to a refinanced First Lender Loan is attached hereto as Exhibit F. 28. NONDISCRIMINATION The Owner covenants by and for itself and its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestry or national origin in the sale, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Owner or any person claiming under or through the Owner establish or permit any such practice or practices of discrimination or segregation with reference to the use, occupancy, or transfer of the Property. The foregoing covenant shall run with the land. 29. RIGHTS OF BENEFICIARIES UNDER DEEDS OF TRUSTS This Agreement shall not diminish or affect the rights of the City under the City Note and the City Deed of Trust. Notwithstanding any other provision in this Agreement to the contrary, this Agreement shall not diminish or affect the rights of the California Housing Finance Agency ("CalHFA"), the United States Department of Housing and Urban Development ("HUD"), the Federal National Mortgage Association ("FNMA"), or the Veterans Administration ("VA") under the First Lender Deed of Trust or any subsequent First Lender deeds of trust hereafter recorded against the Property in compliance with Section 28 above. 30. HUD FORBEARANCE RELIEF Notwithstanding other provisions of this Agreement, the Option shall not be exercised by the City when a deed of trust insured by HUD is secured by the Property, and: (i) the Owner is undergoing consideration by HUD for assignment forbearance relief; or (ii) the Owner is undergoing consideration for relief under HUD's Temporary Mortgage Assistance Payment (TMAP) program. 31. INVALID PROVISIONS If any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 32. NOTICES All notices required herein shall be sent by certified mail, return receipt requested or express delivery service with a delivery receipt or personally delivered with delivery receipt obtained and shall be deemed to be effective as of the date shown on the delivery receipt as the date of delivery, or the date delivery was refused as indicated on the return receipt, or the date Notice was returned as undeliverable as follows: To Owner: 579 Laguna Dr. Carlsbad CA 92008 To the City: City of Carlsbad Housing Services Manager 1200 Carlsbad Village Drive Carlsbad, CA 92008 Attn: Affordable Housing Resale Program The parties may subsequently change addresses by providing written notice of the change in address to the other parties in accordance with this section. 33. INTERPRETATION OF AGREEMENT The terms of this Agreement shall be interpreted so as to avoid speculation on the Property and to insure to the extent possible that the mortgage payments remain affordable to lower-income households. Owner acknowledges that, pursuant to this Agreement, in addition to other rights of the City set forth herein, the Owner has granted the City multiple options to purchase the Property (as more particularly set forth in Section 12 and Section 21), and that each option to purchase is given in consideration of the economic benefits received by the Owner resulting from ownership of the Property made possible by the financial assistance provided by the City to the Owner for the purchase of the Property. This Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if both parties had prepared it. The parties have read and reviewed this Agreement and agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party (including but not limited to Civil Code Section 1654 as may be amended from time to time) shall not apply to the interpretation of this Agreement. In the event of any conflict between the terms of this Agreement, and the terms of the disclosure statement executed by the City and the Owner in conjunction with this Agreement, the terms of this Agreement shall prevail. 34. CONTROLLING LAW; VENUE The terms of this Agreement shall be interpreted under the laws of the State of California. In the event any legal action is commenced to interpret or to enforce the terms of this Agreement or to collect damages as a result of any breach thereof, the venue for such action shall be the Superior Court of the County of San Diego. 35. ATTORNEYS' FEES In the event any action or proceeding in court or other dispute resolution mechanism permitted under this Agreement is commenced by either party to interpret or enforce the terms of this Agreement, the prevailing party therein shall be entitled to recover from the non-prevailing party all of the prevailing party's reasonable costs and expenses in connection therewith, including on any appeal and including expert witness fees, document copying expenses, exhibit preparation costs, carrier expenses and postage and communication expenses, and reasonable attorneys' fees and costs for the services rendered to the prevailing party in such action or proceeding (which shall include the reasonable costs for services of the City's in-house counsel). 36. TIME IS OF THE ESSENCE In all matters under this Agreement, the parties agree that time is of the essence. 37. TITLE OF PARTS AND SECTIONS Any titles of the articles, sections or subsections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any part of its provision. 38. EXHIBITS Any exhibits referred to in this Agreement are incorporated in this Agreement by such reference. 39. INTERPRETATION Where the context requires herein, the singular shall be construed as the plural, and neuter pronouns shall be construed as masculine and feminine pronouns, and vice versa. References in this Agreement to days shall be to calendar days. If the last day of any period to give or reply to a notice, meet a deadline or undertake any other action occurs on a day that is not a day of the week on which the City of Carlsbad is open to the public for carrying on substantially all business functions (a "Business Day"), then the last day for giving or replying to such notice, meeting such deadline or undertaking any such other action shall be the next succeeding Business Day. In no event shall a Saturday or Sunday be considered a Business Day. The use in this Agreement of the words "including", "such as" or words of similar import when used with reference to any general term, statement or matter shall not be construed to limit such statement, tenn or matter to the specific statements, terms or matters, unless language of limitation, such as "and limited to" or words of similar import are used with reference thereto. 40. NON-W AIYER OF BREACH Neither the failure of the City to insist upon strict performance of any of the covenants and agreements of this Agreement, nor the failure by the City to exercise any rights or remedies granted to the City under the terms of this Agreement shall be deemed a waiver or relinquishment of: (i) any covenant contained in this Agreement, or of any of the rights or remedies of the City under this Agreement; or (ii) the right in the future of the City to insist upon and to enforce by any appropriate legal remedy a strict compliance with all of the covenants and conditions of this Agreement. 41. OWNER'S ACKNOWLEDGEMENT OF RESALE RESTRICTION Owner hereby acknowledges and agrees that: A. Owner hereby subjects the Property to the restrictions set forth above, and hereby limits the price for which Owner may sell the Property and the persons to whom Owner may sell the Property as set forth above. The resale price limitation and other provisions contained in this Agreement restrict the full benefits of owning the Property. Owner may not enjoy the same economic or other benefits from owning the Property that Owner would enjoy if this Agreement did not exist. B. Owner acknowledges that the City provided the Homebuyer Loan to the Owner because of the Owner's income eligibility, and the Owner further acknowledges that this Agreement requires that the Property be made available to Eligible Purchasers at an affordable pnce. C. Owner understands all of the provisions of this Agreement. In recognition of the acknowledgments and agreements stated in this Section, Owner accepts and agrees to the provisions of this Agreement with the understanding that this Agreement will remain in full force and effect as to the Property following any Transfer of the Property throughout the Term. D. OWNER UNDERSTANDS THAT THE DETERMINATION OF THE MAXIMUM RESTRICTED RESALE PRICE OF THE PROPERTY TO AN ELIGIBLE PURCHASER CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INCREASES IN MEDIAN INCOME AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE SALES PRICE PERMITTED HEREUNDER MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS AGREEMENT OR SUBJECT TO THE CITY'S AFFORDABLE HOUSING RESALE PROGRAM. OWNER FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE SALES PRICE OF THE HOME, THE PRIMARY OBJECTNE OF THE CITY AND THIS AGREEMENT IS TO IMPLEMENT THE CITY'S AFFORDABLE HOUSING RESALE PROGRAM IN ORDER TO PROVIDE HOUSING TO ELIGIBLE PURCHASERS AT AN AFFORDABLE HOUSING COST. THE MAXIMUM RESTRICTED RESALE PRICE COULD BE LESS THAN OTHER SIMILAR PROPERTIES THAT HAVE NO RESTRICTIONS. NOTWITHSTANDING SUCH LIMITATIONS AND RESTRICTIONS IMPOSED ON THE PROPERTY PURSUANT TO THIS AGREEMENT, OWNER DESIRES TO OBTAIN THE HOMEBUYER LOAN AND HAVE THE PROPERTY SUBJECT TO THIS AGREEMENT. 't~M ~ '2:_ ·e (Initials of Owners) 42. COUNTERPARTS This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts, which shall constitute one and the same agreement. Remainder of Page Left Intentionally Blank ll GOVERNMENT'CODE 27361.7 ll I CERTIFY UNDER PENAL TY OF PERJURY THAT THE· NOTARY ·SEAL ON THE DOCUMENT TO WHIC.H THIS.STATEMENT IS ATTACHED READS AS FOLLOWS: Name of the N_otary:_s_h_el_b_y_M_._N_e_l_so_n _______________ _ Commission .Number:_2_3_7_3_0_7_1 ____ Date Commission Expires: 8-31-2025 County Where Bond is Filed:_S_a_n_D_ie...,.g._o ______________ _ Manufacturer or Vendor Number: NNA 1 , _________________ _ (Located on both sides of the n~tary seal border) Signature:--trc~'"""LJ""cl1J~itA-il~=-+[-:lil-iv..,..,..~--n<u+-V-_____________ _ Firm Name (if applicable) •· Place of Execution: San Diego Date: 8-16-2024 ---------------------- I Rae. Form //R l O [Rev, 7/961 For APN/Parcel ID(s): 203-101-37-14 EXHIBIT A Legal Description THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS: A CONDOMINIUM COMPRISED OF: A CONDOMINIUM LOCATED ON THE REAL PROPERTY DESCRIBED AS LOT 1 OF CITY OF CARLSBAD TRACT NO. 01-13, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 14797, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 17, 2004, AS INSTRUMENT NO. 2004-446317 OF OFFICIAL RECORDS, COMPRISED OF: •' PARCEL 1: UNIT 579, AS SHOWN UPON THAT CERTAIN CONDOMINIUM PLAN FOR LAGUNA POINT, AS RECORDED ON JUNE 27, 2005, AS INSTRUMENT NO. 2005-0538003, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, CALIFORNIA, ("CONDOMINIUM PLAN"). PARCEL 2: AN UNDIVIDED 1121ST INTEREST AS A TENANT IN COMMON IN THE UNDIVIDED INTEREST COMMON AREA AS SHOWN AND DEFINED ON THE CONDOMINIUM PLAN AND AS DESCRIBED IN THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR LAGUNA POINT HOMEOWNERS ASSOCIATION, RECORDED ON JUNE 27, 2005, AS INSTRUMENT NO. 2005-538002, IN THE OFFICE OF THE COUNTY RECORDER FOR SAN DIEGO COUNTY, CALIFORNIA ("DECLARATION"). THE UNDIVIDED INTEREST COMMON AREA WILL NOT BE OWNED BY LAGUNA POINT HOMEOWNERS ASSOCIATION, A CALIFORNIA NON-PROFIT MUTUAL BENEFIT CORPORATION ("ASSOCIATION"). PARCEL 3: ' NON-EXCLUSIVE EASEMENTS FOR INGRESS1 EGRESS, ACCESS, ENJOYMENT, USE AND SUPPORT OVER THE ASSOCIATION PROPERTY AS DESCRIBED IN THE DECLARATION AND INDICATED ON THE CONDOMINIUM PLAN, WHICH WILL BE OWNED BY THE ASSOCIATION. EXCEPTING THEREFROM THE FOLLOWING: (A) ALL UNITS, AS SHOWN UPON THE CONDOMINIUM PLAN OTHER THAN THE UNIT CONVEYED AS PARCEL 1 ABOVE. (B) THE EXCLUSIVE RIGHT OF POSSESSION AND OCCUPANCY OF ALL THOSE AREAS DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY AS DESCRIBED IN THE DECLARATION AND AS SHOWN UPON THE CONDOMINIUM PLAN WHICH ARE SET ASIDE AND ALLOCATED FOR THE EXCLUSIVE USE OF OWNERS OF UNITS. (C) THE EASEMENT AND OTHER RIGHTS RESERVED IN FAVOR OF DECLARANT AS DESCRIBED IN THE DECLARATION AND ON THE CONDOMINIUM PLAN. PARCEL 4: THE EXCLUSIVE RIGHT TO POSSESSION AND OCCUPANCY OF THAT PORTION OF THE ASSOCIATION PROPERTY, DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY, AS SHOWN ON THE CONDOMINIUM PLAN, DESIGNATED AS D-579. PARCEL 5: EXHIBIT A Legal Description THE EXCLUSIVE RIGHT TO POSSESSION AND OCCUPANCY OF THAT PORTION OF THE ASSOCIATION PROPERTY, DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY, AS SHOWN ON THE CONDOMINIUM PLAN, DESIGNATED AS S-579. EXHIBIT A LEGAL DESCRIPTION OF PROPERTY ADDRESS: 579 Laguna Drive, Carlsbad, CA 92008 ASSESSOR PARCEL NO.: 203-101-37-14 / A-1 EXHIBITB FORM OF OWNER OCCUPANCY CERTIFICATION To: City of Carlsbad ("City") From: __________ [name of owner(s)] ("Owner(s)") Address of Property: ____________ ("Property") Date: By signature below, I ______________ [insert name or names of Owner(s)] hereby certify to the City under penalty of perjury that Vwe occupy the home located at _________________ [insert address] ("Property") as my/our principal place of residence and that Vwe have occupied the Property for _____ (_) [insert number] months of the calendar year ______ [insert previous calendar year]. Attached to this letter is a copy of ____ [insert utility bill or driver's license] showing my place of residence? All of the occupants of the Property are listed as follows: This Owner Occupancy Certification is signed on ________ , 20_, under penalty of perjury. By: Owner signature Date: By: Owner signature Date: Due Date: _____ of each calendar year. Attach copy of utility bill or driver's license showing address of Property. B-1 EXHIBITC FORM OF OWNER'S NOTICE OF INTENT TO TRANSFER To: City of Carlsbad ("City") From: __________ [name of owner(s)] ("Owner(s)") Address of Property: ___________ ("Property") Date: Please be notified pursuant to Section 8 of the Resale Restriction Agreement and Option to Purchase between Owner and City dated ______ that the Owner intends to transfer the Property listed above. A. The following information is provided to the City pursuant to Section 8 of the Resale Agreement: 1. Address of Property: ____________________ _ 2. Date Owner purchased Property: ________________ _ 3. Original Affordable Purchase Price: _______________ _ 4. Original amount of Homebuyer Loan: _______________ _ 5. Full Purchase Price: --------------------- 6. Date Owner intends to vacate Property: 7. Name and phone number of person for City to contact to schedule inspection: and -----------------------(name) (phone number) B. As required by Section 8 of the Resale Restriction Agreement, the following the HUD-1 Settlement Statement from Owner's purchase of the property is attached. C. I have not listed the Property for sale with a multiple listing service, or contacted a real estate broker or financial institution. I agree to prepare the Property for sale by: 1. obtaining a pest control report within thirty (30) days of the date of this notice; C-1 2. repairing all damage noted in the pest report within the sooner of: (i) sixty (60) days from the date of this notice; or (ii) two (2) weeks prior to close of escrow or the transfer of the Property; 3. allowing the City or its designee to inspect the Property within thirty (30) days of this notice; 4. maintaining utility connections until the Property is transferred; 5. not removing any kitchen appliances prior to vacating the Property without the City approving such removal; and 6. permitting a walk through by the City prior to close of escrow or the transfer. This Owner's Notice oflntent to Transfer is certified by Owner to be true and correct and is signed on the date(s) below under penalty of perjury. By: Owner signature Date: By: Owner signature Date: C-1 EXHIBITD FORM OF CITY RESPONSE NOTICE To: __________ ("Owner(s)") From: City of Carlsbad ("City") Address of Property: ____________ ("Property") Date: Thank you for delivering the Notice oflntent to Transfer. This letter is the City Response Notice described in Section 10 of the Resale Restriction Agreement that was recorded against title to your home. The City: 1. __ City will check this Sentence #1 and complete other information listed in #1 if the City intends to exercise its option to purchase the Property or assign its option to the Property to a Designated Purchaser at any point during the entire Term of Resale Restriction Agreement A. Affordable Sales Price: $ -------- B. Amount owed on Homebuyer Loan: $ ________ _ C. Full Sales Price (add numbers in l(A) and l(B)): $ _____ _ D. Fair Market Value (as estimated by the City):$ ______ _ The Price for which you may sell your Property ( or the Maximum Restricted Resale Price) (The greater of l(C) and l(D)): $ ______ _ In connection with the City's Option, you will owe a$ ___ to City. If the City has assigned its option, the name of Designated Purchaser is _____ _ The City or its Designated Purchaser will follow up with you to complete the sale of your Property. If a Designated Purchaser purchases your Property, that designated purchaser may assume the amount you owe on the Homebuyer Loan. If the City purchases your Property, the D-1 amount you owe on the Homebuyer Loan shall be credited against the purchase price paid by the City. 2. ___ City will check this Sentence #2 and complete other information listed in #2 if the City intends for Owner to sell the Property to an Eligible Purchase during years 1-30 of the Resale Restriction Agreement. A. Affordable Sales Price: $ -------- B. Amount owed on Homebuyer Loan: $ --------- C. Full Sales Price (add numbers in l(A) and l(B)): $ _____ _ D. Fair Market Value (as estimated by the City):$ ______ _ The total price for which you may sell your Property ( or the Maximum Restricted Resale Price) (the greater of l(C) and l(D)): $ _______ _ As noted in 2(B) above, the amount owed on the Homebuyer Loan is $ ____ . An Eligible Purchaser is likely to assume the City Note and will then agree to repay the amount of the Home buyer Loan. You must market your Property to an "Eligible Purchaser" as required by Section 15 of the Resale Restriction Agreement. The Maximum Qualifying Income of Eligible Purchaser is: ___ Very Low Income Household (50% of Area Median Income) 1 person household$ ______ _ 2 person household $ ______ _ 3 person household $ ______ _ 4 person household $ ______ _ 5 person household $ ______ _ 6 person household $ ______ _ ___ Low Income Household (80% of Area Median Income) 1 person household $ ______ _ D-2 2 person household $ ------- 3 person household $ ------- 4 person household $ ------- 5 person household $ ------- 6 person household $ ______ _ When you locate a proposed purchaser of your Property, you must provide the City with the information listed in Section 15(B) of the Resale Restriction Agreement and 15(D)(l) through (4). Upon sale of your Property to a proposed purchaser who has been approved by the City as an Eligible Purchaser, you must provide the information required by Section 15(D)(5) through (7). CITY: Name: ------------- Title: Date: Designated Purchaser (if applicable): Name: _____________ Name: ____________ _ Date: Date: All questions regarding this notice should be directed to _________ _ D-3 EXHIBITE FORM OF OWNER ACKNOWLEDGEMENT OF CITY RESPONSE NOTICE Name: Address of Property: I (We), ____________ [insert name(s)] hereby acknowledge that I (We) received the City Response Notice (as described in Section 10 of the Resale Restriction Agreement on _____ [insert date(s)]. By: Owner signature Date: By: Owner signature Date: E-1 To: From: EXHIBIT F FORM OF OWNER REQUEST FOR CITY SUBORDINATION TO REFINANCED FIRST LENDER LOAN Property Address: City of Carlsbad ("City") _________________ ("Owner(s)") _________________ ("Property") The Owner hereby requests the City to approve the Owner's refinance of the existing first mortgage on the Property. The Owner provides the following information which it certifies to be true and correct: 1. Original Affordable Purchase Price of Property: $ ______ _ 2. Original Homebuyer Loan Amount 3. Full Purchase Price of Property (1 plus 2) $ ______ _ 3. Original principal balance of existing First Lender Loan: $ ______ _ 4. Interest rate of existing First Lender Loan: $ ______ _ 5. Outstanding principal balance of existing First Lender Loan: $ ------- 6. Monthly payments due on existing First Lender Loan $ ______ _ 7. Principal amount of proposed new First Lender Loan: $ ______ _ 8. Interest rate of Proposed new First Lender Loan: $ ______ _ 9. Monthly payments to be due on new First Lender Loan: $ ______ _ The Owner hereby certifies the above information is true and correct and this Owner(s) Request is executed under penalty of perjury on the date(s) below. By: Owner signature Date By: Owner signature Date F-1 Recording Requested by: Fidelity National Title San Diego Office RECORDING REQUESTED PURSUANT TO GOVERNMENT CODE SECTION 27383 When Recorded Mail To: City of Carlsbad Housing Services Manager 1200 Carlsbad Village Drive Carlsbad, CA 92008 DOC# 2024-0220632 111111111111 lllll 111111111111111111111111111111111111111111111 IIII IIII Aug 19, 2024 01 :37 PM OFFICIAL RECORDS JORDAN Z. MARKS, SAN DIEGO COUNTY RECORDER FEES: $0.00 (SB2 Atkins: $0.00) PAGES: 8 NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (City of Carlsbad Affordable Housing Resale Program) NOTICE IS HEREBY GIVEN, that the City of Carlsbad ("City"), has required David Armando Hamburger Hamburger and Maria Aracely Zapata Castrillon, husband and wife as community property with right of survivorship ("Owner") to enter into certain affordability covenants and restrictions entitled, Affordability Restrictions on Transfer of Property, Occupancy, and Refinancing Restrictions and Option to Purchase ("Restrictions"), with reference to certain real property located at 579 Laguna Dr. Carlsbad, CA 92008, San Diego County ("Property"), and further described in Exhibit A, incorporated herein by reference. The affordability covenants and restrictions contained in the Restrictions include without limitation and as further described in the Restrictions: 1. The Property is restricted for resale to a low-income household at a purchase price affordable to a low-income household, except as set fo1ih in the Restriction. 2. The Owner must occupy the Property as the Owner's principal residence. 3. The Owner must give notice to the City before resale of the Property. 4. The Owner has granted the City an option to purchase the Property upon resale or default. 5. The Owner's rights to pledge the Property as security for a debt are limited. In the event of any conflict between this Notice of Affordability Restrictions on Transfer of Property ("Notice") and the Restrictions, the terms of the Restrictions shall prevail. The Restrictions have been recorded concurrently herewith and shall remain in effect for thirty (30) years commencing on the date of recordation of the Restrictions. -4' Exempt from fee per GC27388.1 due to ~ being recorded in connection with concurrent transfer that is subject to the imposition of do::umentary transfer icx. II GOVERNMENT·cooE 27361.7 ll I CERTIFY UNDER PENAL TY OF PERJURY THAT THE-NOTARY ·SEAL ON THE DOCUMENT TO WHICH THIS.STATEMENT IS ATTACHED READS AS FOLLOWS: Name of the N_otary:_s_h_el_b_y_M_._N_e_ls_o_n ______________ _ Commission -Number:_2_3_7_3_07_1 ____ Date Commission Expires: 8-31-2025 County Where Bond is Filed:_S_a_n_D_ie_g_o ______________ _ Manufacturer or Vendor Number: NNA1 -----------------(Located on bo1h sides of the notary seal border} Signature: luJJ.t1A~ Firm Name (if applicable) •· Place of Execution: San Diego Date: 8-16-2024 -------------------- 1 Rec. Form 1/R l O (Rev. 7/96) EXHIBIT A LEGAL DESCRIPTION ASSESSOR PARCEL NO.: J03-l0\-37-I y For APN/Parcel ID(s): 203-101-37-14 EXHIBIT A Legal Description THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS: A CONDOMINIUM COMPRISED OF: A CONDOMINIUM LOCATED ON THE REAL PROPERTY DESCRIBED AS LOT 1 OF CITY OF CARLSBAD TRACT NO. 01-13, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 14797, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 17, 2004, AS INSTRUMENT NO. 2004-446317 OF OFFICIAL RECORDS, COMPRISED OF: PARCEL 1: UNIT 579, AS SHOWN UPON THAT CERTAIN CONDOMINIUM PLAN FOR LAGUNA POINT, AS RECORDED ON JUNE 27, 2005, AS INSTRUMENT NO. 2005-0538003, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, CALIFORNIA, ("CONDOMINIUM PLAN"). PARCEL 2: AN UNDIVIDED 1121ST INTEREST AS A TENANT IN COMMON IN THE UNDIVIDED INTEREST COMMON AREA AS SHOWN AND DEFINED ON THE CONDOMINIUM PLAN AND AS DESCRIBED IN THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR LAGUNA POINT HOMEOWNERS ASSOCIATION, RECORDED ON JUNE 27, 2005, AS INSTRUMENT NO. 2005-538002, IN THE OFFICE OF THE COUNTY RECORDER FOR SAN DIEGO COUNTY, CALIFORNIA ("DECLARATION"). THE UNDIVIDED INTEREST COMMON AREA WILL NOT BE OWNED BY LAGUNA POINT HOMEOWNERS ASSOCIATION, A CALIFORNIA NON-PROFIT MUTUAL BENEFIT CORPORATION ("ASSOCIATION"). PARCEL 3: NON-EXCLUSIVE EASEMENTS FOR INGRE~S. EGRESS, ACCESS, ENJOYMENT, USE AND SUPPORT OVER THE ASSOCIATION PROPERTY AS DESCRIBED IN THE DECLARATION AND INDICATED ON THE CONDOMINIUM PLAN, WHICH WILL BE OWNED BY THE ASSOCIATION. EXCEPTING THEREFROM THE FOLLOWING: (A) ALL UNITS, AS SHOWN UPON THE CONDOMINIUM PLAN OTHER THAN THE UNIT CONVEYED AS PARCEL 1 ABOVE. (B) THE EXCLUSIVE RIGHT OF POSSESSION AND OCCUPANCY OF ALL THOSE AREAS DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY AS DESCRIBED IN THE DECLARATION AND AS SHOWN UPON THE CONDOMINIUM PLAN WHICH ARE SET ASIDE AND ALLOCATED FOR THE EXCLUSIVE USE OF OWNERS OF UNITS. (C) THE EASEMENT AND OTHER RIGHTS RESERVED IN FAVOR OF DECLARANT AS DESCRIBED IN THE DECLARATION AND ON THE CONDOMINIUM PLAN. PARCEL 4: THE EXCLUSIVE RIGHT TO POSSESSION AND OCCUPANCY OF THAT PORTION OF THE ASSOCIATION PROPERTY, DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY, AS SHOWN ON THE CONDOMINIUM PLAN, DESIGNATED AS D-579. PARCEL 5: EXHIBIT A Legal Description THE EXCLUSIVE RIGHT TO POSSESSION AND OCCUPANCY OF THAT PORTION OF THE ASSOCIATION PROPERTY, DESIGNATED AS EXCLUSIVE USE ASSOCIATION PROPERTY, AS SHOWN ON THE CONDOMINIUM PLAN, DESIGNATED AS S-579. $660,616 PROMISSORY NOTE Secured by Deed of Trust Notice to Borrower: This Note is not assumable Carlsbad, California July 31, 2024 FOR VALUE RECEIVED, the undersigned David Armando Hamburger Hamburger and Maria Aracely Zapata Castrillon, husband and wife as community property with right of survivorship ("Borrower"), promises to pay to the City of Carlsbad, a municipal corporation ("City"), at the Housing and Homeless Services Department, 1200 Carlsbad Village Drive, Carlsbad, California 92008, or such other place as the City may designate in writing, the principal sum of Six Hundred Sixty Thousand Six-Hundred and Sixteen Dollars ($660,616) plus Contingent Interest calculated pursuant to Section 4 below, plus any amounts due the City as Unauthorized Rental Proceeds or Excess Sales Proceeds pursuant to the Declaration of Restrictive Covenants Regarding Restrictions on Transfer of Property, Occupancy Restrictions, Refinancing Restrictions and Option to Purchase ("Resale Restriction Agreement ") by and between Borrower and City of even date herewith. 1. Purpose of Loan. Borrower is purchasing the real property more particularly described in Exhibit A to the Deed of Trust and the improvements thereon located at 579 Laguna Dr. Carlsbad, CA 92008 in the City of Carlsbad ("Property"). In connection with the Affordable Housing Resale Program and in fulfillment of its inclusionary obligation pursuant to an Affordable Housing Agreement ("Affordable Housing Agreement") between the Wave Crest Resorts II, LLC, a California limited liability company entered into November 17, 2003. Developer made a subsidy loan ("Homebuyer Loan") to allow for the purchase of a home by a low-income household located in Carlsbad, California on that certain real property and more particularly described in Exhibit A ("Property") and then assigned the Homebuyer Loan to the City. The Homebuyer Loan is in an amount equal to the difference between the fair market value of the Property and the price affordable to Borrower, who is a lower income household. Because the home is being made affordable to Borrower as part of the City's affordable housing program, Borrower is required and has agreed to execute the Resale Restriction Agreement. Among other things, the Resale Restriction Agreement restricts the price of the Property upon resale and requires the Borrower to pay any Excess Sales Proceeds (as defined below) at resale to the City. This Note evidences both: (a) the obligation of Borrower to repay the Homebuyer Loan; and (b) the obligation of Borrower to pay any Unauthorized Rental Proceeds (as defined below) and Excess Sales Proceeds to the City pursuant to the Resale Restriction Agreement. 2. Definitions. The terms set forth in this section shall have the following meanings in this Note. 1010/17/2045538.2 (a) "Appreciation Amount" shall mean the amount calculated by subtracting the Original Affordable Purchase Price of the Property from one of the following amounts, as applicable: (i) in the event of a sale of the Property to the City or City designee pursuant to the City Option, the Affordable Sales Price; or (ii) in the event of a sale of the Property to an Eligible Purchaser (as defined in the Resale Restriction Agreement) during the Initial Period (as defined in the Resale Restriction Agreement), the Affordable Sales Price; or (iii) in the event of any other sale, the amount received by the Borrower as the sale price of the Property, as certified by the Borrower; or (iv) in the event of a prepayment of this Note, a Transfer other than sale of the Property, or in the event of a default, the Fair Market Value of the Property; or (v) in the event a creditor acquires title to the Property through a deed in lieu of foreclosure, a trustee's deed upon sale, or otherwise, the amount paid for the Property at a creditor's sale of the Property; or (vi) in the event of payment at the expiration of the Term the Fair Market Value of the Property. The provisions of this Section 2(b)(iv) shall be subject to Section 16 of the Resale Restriction Agreement which requires that when Excess Sales Proceeds are paid to the City that the Appreciation Amount is calculated by subtracting the Original Affordable Purchase Price from the Maximum Restricted Resale Price. (b) "Contingent Interest" shall mean the percentage of the Appreciation Amount set out in Section 4. (c) "Excess Sales Proceeds" shall have the meaning set forth in Section 16 of the Resale Restriction Agreement. (d) "Fair Market Value" shall be determined by a real estate appraisal made by an independent residential appraiser designated by the City. 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. Nothing in this subparagraph shall preclude the Borrower and the City from establishing the Fair Market Value of the Property by mutual agreement in lieu of an appraisal. (e) "First Mortgage" shall mean the promissory note and deed of trust evidencing and securing the first mortgage loan for the Property. (f) "Maximum Restricted Resale Price" shall have the same meaning as set forth in Section 14 of the Resale Restriction Agreement. (g) "Original Affordable Purchase Price" shall mean One Hundred Sixty-Nine Thousand Three Hundred Eighty-Four Dollars ($169,384), the affordable price paid by Borrower to the Seller for the purchase of the Property. The Original Affordable Purchase Price is the effective price of the Property. The "Full Purchase Price" of the Property (as defined in the Resale Restriction Agreement) is equal to the Original Affordable Purchase Price plus the amount of this Promissory Note. (h) "Property" shall mean the land and improvements thereon encumbered by the deed of trust executed in connection with this Note. 1010/17/2045538.2 (i) "Resale Restriction Agreement" shall mean the Declaration of Restrictive Covenants Regarding Restrictions on Transfer of Property, Occupancy Restrictions, Refinancing Restrictions and Option to Purchase executed by the Borrower and the City in connection with the Homebuyer Loan. (j) "Transfer" shall mean any sale, assignment or transfer, voluntary or involuntary, of any interest in the Property, including, but not limited to, a fee simple interest, a joint tenancy interest, tenancy in common interest, a life estate, a leasehold interest, or an interest evidenced by a land contract by which possession of the Property is transferred and the Borrower retains title. Any Transfer without satisfaction of the provisions ofthis Note is prohibited. A transfer: (i) to an existing spouse who is also an obligor under the Note; (ii) by a Borrower to a spouse where the spouse becomes the co-owner of the Property; (iii) between spouses as part of a marriage dissolution proceeding; (iv) to an existing spouse or child of the Borrower by devise or inheritance following the death of the Borrower; (v) by the Borrower into an inter vivas revocable trust in which the Borrower is the trustor; or (vi) by refinance of the First Mortgage meeting the requirements of Section 11, shall not be considered a Transfer for the purposes of this Note; provided, however, that the Borrower shall continue to occupy the Property as his or her principal place of residence ( except where the transfer occurs pursuant to subsection (iii) or (iv) above, in which event the transferee shall owner-occupy the Home and affirmatively assume Owner's obligations under this Note and the City Deed of Trust, and the Resale Restriction Agreement) and the Borrower shall provide written notice of such transfer to the City pursuant to Section 8 of the Resale Restriction Agreement. (k) "Unauthorized Rental Proceeds" shall have the meaning set forth in Section 4 of the Resale Restriction Agreement. 3. Security. This Note is secured by a second deed of trust dated the same date as this Note (the "Deed of Trust"). 4. Contingent Interest. The Borrower shall pay contingent interest equal to fifty Percent (50%) of the Appreciation Amount (the "Contingent Interest"). No interest other than Contingent Interest shall be due hereunder. The Contingent Interest shall be paid to the City at the time set forth in Section 6 below. Borrower acknowledges that the Contingent Interest percentage amount is equal to the Homebuyer Loan principal amount as a percentage of the total purchase price of the Property paid by the Borrower at the time of purchase (which includes the amount of this Note), multiplied by seventy-five one hundredths (.75). Borrower acknowledges that this calculation of the percentage of the Appreciation Amount due to the City as Contingent Interest includes a twenty-five percent (25%) discount to Borrower to account for any capital improvements Borrower may make to the Property. City has agreed that the Contingent Interest percent shall not exceed fifty percent (50%). 5. Term. The Term of this Note shall mean the period commencing on the date of this Note and expiring on the date thirty (30) years thereafter (the "Term"). 6. Repayment. The total amount of the principal and any Contingent Interest owed under this Note (including Unauthorized Rental Proceeds and Excess Sales Proceeds due to the 1010/17/2045538.2 City pursuant to the Resale Restriction Agreement) shall immediately become due and payable: (a) in the event of a default by the Borrower under this Note, the Resale Restriction Agreement, the Deed of Trust, or the First Mortgage; (b) on the date Transfer is made whether voluntarily, involuntarily, or by operation of law and whether by deed, contract of sale, gift, devise, bequest or otherwise; ( c) in the event Borrower ceases to occupy the Property as his or her principal place ofresidence; or (d) at the end of the Term of this Note as described above in Section 5. Failure to declare such amounts due shall not constitute a waiver on the part of the City to declare them due in the event of a subsequent Transfer. 7. Late Payment Fees. If any payment due hereunder is not paid within five (5) days from the date such becomes due, Borrower shall pay a reasonable late or collection charge equal to five percent (5%) of the amount so unpaid. The City and Borrower agree that the actual damages and costs sustained by the City due to the failure to make timely payments would be extremely difficult to measure and that the charges specified in this paragraph represent a reasonable estimate by Borrower and the City of a fair average compensation for such damages and costs. Such charges shall be paid by Borrower without prejudice to the right of the City to collect any other amounts provided to be paid under this Note, the Resale Restriction Agreement or the Deed of Trust or, with respect to late payments, to declare a default. 8. Prepayments. The Borrower may prepay all or part of the balance due under this Note including principal and Contingent Interest. In the event the entire amount of principal due under this Note is prepaid, all Contingent Interest, calculated as of the date of prepayment, shall also be due at the time of prepayment. In the event of partial prepayment, the amount of Contingent Interest due upon prepayment shall be determined at the time of any partial prepayment based on the Fair Market Value of the Property. Partial prepayments shall be allocated between payment of Contingent Interest and payment of principal in the same proportion as the ratio of each to the total amount due (principal and interest) at the time of prepayment. Following a prepayment, the percentage of Contingent Interest due the City shall be recalculated to reflect the paydown in principal owed the City. The recalculated Contingent Interest shall equal the outstanding principal amount of the Note divided by Full Purchase Price. Notwithstanding any prepayment of amounts due under this Note, the Resale Restriction Agreement shall continue in full force and effect for the period of time set forth in Section 25 of the Resale Restriction Agreement. 9. Limitations on Assumption of Note. The Borrower acknowledges that this Note is given in connection with the purchase of the Property as part of a program of the City to assist in the purchase of homes by low-income households. Consequently, this Note is only assumable by Eligible Purchasers (as defined in the Resale Restriction Agreement). This Note is due in full upon all other Transfers. In the event this Note is assumed by an Eligible Purchaser, the Eligible Purchaser shall execute a new note, which shall be in an amount equal to the principal and Contingent Interest owed by Borrower, a new deed of trust and a new resale restriction agreement with a restarted term in forms approved by the City. 10. Maintenance; Taxes; Insurance. Borrower shall maintain the Property in good repair and in a neat, clean and orderly condition. Borrower shall promptly pay all property taxes 1010/17/2045538.2 due on the Property prior to any delinquency and shall comply with the insurance requirements set forth in the Deed of Trust and Resale Restriction Agreement. 11. Refinance of First Mortgage Loan. The outstanding principal and interest on this Note shall not be due upon prepayment and refinance of the First Mortgage, and the Resale Restriction Agreement and Deed of Trust shall be subordinated to the refinanced loan, provided that: (a) such refinancing is approved by the City; (b) the amount refinanced does not exceed the outstanding principal balance of the First Mortgage at the time of refinance plus reasonable costs of refinance; and ( c) the refinance does not result in higher monthly payments on the First Mortgage Loan than were due prior to the refinance. 12. Default. (a) The Borrower shall be in default under this Note ifhe or she is in default under the First Mortgage following the expiration of First Mortgage cure periods, or if, after the notice and cure period provided by the City to the Borrower pursuant to the notice and cure provisions of the Deed of Trust, the Borrower: (i) fails to pay any money when due under this Note; (ii) breaches any representation or covenant made in this Note or Resale Restriction Agreement in any material respect; or (iii) breaches any provision of the Deed of Trust. (b) Upon the Borrower's breach of any covenant or agreement of the Borrower in this Note, the Resale Restriction Agreement or the Deed of Trust, including, but not limited to, the covenants to pay, when due, any sums secured by the Deed of Trust, the City, prior to acceleration, will send, in the manner set forth in Section 17, notice to the Borrower specifying: (i) the breach; (ii) if the breach is curable, the action required to cure such breach; (iii) a date, not less than thirty (30) days from the date the notice is effective, by which such breach, if curable, is to be cured; and (iv) if the breach is curable, that failure to cure such breach on or before the date specified in the notice may result in acceleration of the sums secured by the Deed of Trust and foreclosure by the City. The notice will also inform the Borrower of the Borrower's right to reinstate after acceleration and the right to bring a court action to assert the nonexistence of default or any other defense of the Borrower to acceleration and sale. 13. Acceleration. Upon the occurrence of a default under this Note, the Resale Restriction Agreement, the Deed of Trust, or the First Mortgage, the City shall have the right to declare the full amount of the principal along with any Contingent Interest under this Note immediately due and payable. Any failure by the City to pursue its legal and equitable remedies upon default shall not constitute a waiver of the City's right to declare a default and exercise all of its rights under this Note, the Resale Restriction Agreement, and the Deed of Trust. Nor shall acceptance by the City of any payment provided for herein constitute a waiver of the City's right to require prompt payment of any remaining principal and interest owed. 14. No Offset. The Borrower hereby waives any rights of offset it now has or may later have against the City, its successors and assigns, and agrees to make the payments called for in this Note in accordance with the terms of this Note. 1010/17/2045538.2 15. Waiver; Attorney Fees and Costs. The Borrower and any endorsers or guarantors of this Note, for themselves, their heirs, legal representatives, successors and assigns, respectively, severally waive diligence, presentment, protest, and demand, and notice of protest, dishonor and non-payment of this Note, and expressly waive any rights to be released by reason of any extension of time or change in terms of payment, or change, alteration or release of any security given for the payments hereof, and expressly waive the right to plead any and all statutes oflimitations as a defense to any demand on this Note or agreement to pay the same, and jointly and severally agree to pay all costs of collection when incurred, including reasonable attorney fees. If an action is instituted on this Note, the Borrower promises to pay, in addition to the costs and disbursements allowed by law, such sum as a court may adjudge reasonable as attorneys' fees in such action. 16. No Waiver by the City. No waiver of any breach, default or failure of condition under the terms of this Note shall be implied from any failure of the City to take action with respect to such breach, default or failure or from any previous waiver of any similar or unrelated breach, default or failure. 17. Notices. All notices required in this Note shall be sent by certified mail, return receipt requested, or express delivery service with a delivery receipt, or personally delivered with a delivery receipt obtained and shall be deemed to be effective as of the date shown on the delivery receipt as the date of delivery, the date delivery was refused, or the date the notice was returned as undeliverable as follows: To the Borrower: 579 Laguna Dr. Carlsbad. Ca 92008 To the City: City of Carlsbad Housing Services Manager 1200 Carlsbad Village Drive Carlsbad, CA 92008 Attn: Affordable Housing Resale Program The parties may subsequently change addresses by providing written notice of the change in address to the other parties in accordance with this section. 18. Joint and Several Obligations. This Note is the joint and several obligations of all makers, sureties, guarantors and endorsers, and shall be binding upon them and their successors and assigns. 19. Nonliability for Negligence, Loss, or Damage. Borrower acknowledges, understands and agrees that the relationship between Borrower and the City is solely that or 1010/17/2045538.2 borrower and lender, and that the City does not undertake or assume any responsibility for or duty to Borrower to select, review, inspect, supervise, pass judgment on, or inform Borrower of the quality, adequacy or suitability of the Property or any other matter. The City owes no duty of care to protect Borrower against negligent, faulty, inadequate or defective building or construction or any condition of the Property and Borrower agrees that neither Borrower, or Borrower's heirs, successors or assigns shall ever claim, have or assert any right or action against the City for any loss, damage or other matter arising out of or resulting from any condition of the Property and will hold the City harmless from any liability, loss or damage for these things. 20. Termination of Restrictions. Any legal restrictions on conveyance of the Property (as defined in 24 CFR 203.41(a)(3)) included in this Note shall terminate upon transfer of the Property by foreclosure, deed in lieu of foreclosure, or assignment to the Secretary of the United States Department of Housing and Urban Development. 21. Controlling Law. This Note shall be construed in accordance with and be governed by the laws of the State of California. 22. Assignment by City. The City may assign its right to receive the proceeds under this Note to any person and upon notice to the Borrower by the City all payments shall be made to the assignee. 23. Invalid Provisions. If any one or more of the provisions contained in this Note shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Note, and this Note shall be construed as if such invalid, illegal or unenforceable provision had never been contained in this Note. 24. Entire Agreement. This Note (along with the Resale Restriction Agreement and Deed of Trust) sets forth the entire understanding and agreement of the City and the Borrower and any amendment, alteration or interpretation of this Note must be in writing signed by both the City and the Borrower. Remainder of page left intentionally blank 1010/17/2045538.2