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South Bend Redevelopment Commission <br />Regular Me ting - November 16, 1979 <br />4. COMMUNICATIONS (continued) <br />Ms. De beck: There's something that was said that I didn't <br />quite clearly understand. This was not a major policy, the <br />minor policy was written for the moment? <br />Mr. Bu ler: The sale of bonds, economic development bonds, <br />generally is a mortgage situation. It is handled like `a <br />mortgage loan. At the time the bonds are sold, that corre- <br />sponds to the closing of a mortgage. The person who is <br />making the mortgage or buying the bonds, has a checklist <br />of 40 to 50 items, including title insurance, surveys, <br />builder's risk insurance, soil test and so forth. In this <br />particular case,; we knew that HUD was requiring a closing <br />early on. Construction is not going to commence until <br />next year. So far as the bond sale is concerned, that did <br />occur. The proceeds from the sale of those bonds will be <br />held in a trust account until next spring. So all of these <br />items n the checklist are not going to be necessary until <br />someti a next spring when the disbursement begins. It's <br />at tha time that the lender needs the protection that is <br />includ d in all of these documents, including a 10,000 <br />millioi dollar mortgagee policy. <br />Ms. De beck: What they (Michiana Title Corp.) did was just <br />a smal policy? <br />Mr. Butler: It was a ground lease policy. <br />Mr. Ni tz: Actually, the selection of that particular com- <br />pany was made by Aetna, who drew the closing papers. <br />Ms. De beck: I understand the larger policy will come later? <br />Was Kevin's firm chosen because you were in a hurry? <br />Mr. Ni tz: Actually, the closing papers were drawn by Aetna. <br />I don't know whether they asked the other companies for bids <br />or not but they did ask :Michiana for a bid, which was given. <br />They d ew the closing papers, we did not, and they named <br />Michiana Title. <br />Mr. Butler: That was related to the final policy. Michiana <br />Title Was named as the escrow agent, which had not been <br />determined by the developer, which is the party that has to <br />make the determination. Incidentally, I meant to make this <br />point, so that the record is clear. It has been stated that <br />I am tie President. I am one of nine owners of Michiana <br />Title. There are seven equal interests, and one lesser in- <br />terest, owned by two individuals. My interest approximates <br />13 per ent. I am not the President of Michiana Title, I <br />am a m tuber of the Board of Directors, as are all the share- <br />holder of Michiana Title. This is simply for the record. <br />6t <br />