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X. Defaults and Foreclosures <br />Should a default and/or foreclosure occur, the Division will follow the policy <br />adopted by the City Council at its meeting of June 1, 1992. That policy <br />authorizes the Executive Director of the Community Development Agency to take <br />any of the following actions to protect the City's interests: <br />a. Initiating foreclosure proceedings; <br />b. Bidding at a foreclosure sale in an amount sufficient to protect the <br />City's security interest; <br />c. Purchasing a senior note and deed of trust or other lien; <br />d. Acquiring property through foreclosure or deed in lieu of foreclosure. <br />The Executive Director may determine not to take any of the above actions when <br />in the Executive Director's opinion such actions would be financially infeasible or <br />would be counter-productive to the interests or objective of the City. <br />XI. Subordinations <br />In accordance with Section 119 of the CalHome Program Guidelines, the lien <br />securing payment of the program loan shall be subject only to liens, <br />encumbrances and other matters of record reviewed and approved by the Division <br />in the exercise of its responsibility for underwriting the loan. Refinancing of the <br />first mortgage loan, transfer of the property to another party, or assumption of the <br />first mortgage loan by another party will call the CalHome Program loan due and <br />payable. <br />Page 3 of 3 <br />