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LAW OFFICES <br />COLEMAN, GLEDHILL, HARGRAVE &. PEEK <br />A PROFESSIONAL CORPORATION <br />129 E TRYON STREET <br />P. O- DRAWER 1529 <br />HILLSBOROUGH, NORTH CAROLINA 27278 <br />919. 732,2196 <br />FAX 919 -732 -7997 <br />% w v cgandhxom <br />October 30, 2003 <br />Mr, Rod Visser <br />Assistant Orange County Manager <br />Post Office Box 8181 <br />Hillsborough, North Carolina 27278 <br />FROM THE DESK OF <br />GEOFFREY E. GLEDHILL <br />EMAIL �cofficypicJMll @c�n�Jh.com <br />RE: Hazard Mitigation Grant Program - Hess Property <br />Dear Rod: <br />This letter confirms our conversations concerning the requests <br />made on behalf of Alex and Frances Hess for Orange County to <br />subordinate a deed of trust to a first mortgage resulting from the <br />refinancing by the Hesses of their home mortgage. The Hazard <br />Mitigation Grant paid for the purchase of the former home of Mr. <br />and Mrs. Hess that was flooded by Hurricane Floyd. The Grant also <br />provided additional money to enable the Hesses to relocate to a new <br />home, That additional money ($17,070.00) was provided to Mr. and <br />Mrs. Hess as a deferred loan secured by a deed of trust on their <br />new home. Orange County is the beneficiary of that deed of trust. <br />The bank lender of the new mortgage loan is requiring its security <br />for the loan to be in a first lien position. Therefore, in order <br />for the Hesses to be able to secure their mortgage, they must <br />either pay back the $17,070,00 or the County must agree to <br />subordinate its deed of trust to the new mortgage. <br />The terms of the deferred loan to the Hesses do not require <br />them to repay the $17,070,00 if the Hesses own and live in their <br />new home for 10 years. If they cease living in or sell their home <br />within 5 years, they must repay the entire amount. If they cease <br />living in it or sell it after 5 years but less than 10 there is a <br />graduated amount of the loan which must be repaid. <br />Orange County has an interest in insuring that the amount of <br />its security in the property when added to the amount of a first <br />mortgage is less than the market value of the property, Linnie <br />Causey, a lawyer in Chapel Hill who has represented the Hesses in <br />these matters, has provided the value information that is enclosed <br />which indicates to me that the Hesses' home would sell for an <br />