City of Philadelphia - File #: 070547

• File #: 070547
• Version: 0
• Type: Resolution
• Status: ADOPTED
• File created: 6/7/2007
• In control: CITY COUNCIL
• Final action: 6/7/2007
• Title: Calling on the Board of Governors of the Federal Reserve System to use their authority under the Home Ownership and Equity Protection Act of 1994 (HOEPA) to further protect consumers from predatory lending, particularly regarding subprime mortgages.
• Sponsors: Councilmember Tasco, Councilmember Greenlee, Councilmember Goode, Councilmember Reynolds Brown, Councilmember Kelly, Councilmember Kenney, Councilmember DiCicco, Council President Verna, Councilmember Clarke, Councilmember Rizzo, Councilmember Krajewski, Councilmember Miller, Councilmember Campbell, Councilmember Campbell, Councilmember Savage, Councilmember Savage, Councilmember Blackwell, Councilmember Blackwell, Councilmember Ramos, Councilmember Ramos, Councilmember O'Neill, Councilmember O'Neill

Date	Ver.	Action By	Action	Result	Tally
6/7/2007	0	CITY COUNCIL	ADOPTED
6/7/2007	0	CITY COUNCIL	READ
6/7/2007	0	CITY COUNCIL	Introduced	Pass

Title
Calling on the Board of Governors of the Federal Reserve System to use their authority under the Home Ownership and Equity Protection Act of 1994 (HOEPA) to further protect consumers from predatory lending, particularly regarding subprime mortgages.
Body
WHEREAS, The Board of Governors of the Federal Reserve System are holding public hearings in Washington, DC on June 14, 2007; and

WHEREAS, This hearing will examine how the Board might use its rulemaking authority under HOEPA to address concerns about abusive lending practices in the mortgage market , particularly the subprime mortgage market; and

WHEREAS, One of the issues to be discussed during the hearings are prepayment penalties especially those that extend beyond the expiration of an introductory or teaser rate on an adjustable rate mortgage and deter consumers from refinancing when the rate resets;

WHEREAS, Another issue to be discussed during the hearing is the availability of an escrow for taxes and insurance on subprime loans as this aids the consumer in their awareness as well as budgeting for these expenses; and

WHEREAS, Another issue to be discussed during the hearing are the "stated income" or "low doc" loans when the consumer is given a subprime mortgage based on not verified income which causes the lenders to charge higher interest rates. Sometimes these type of loans are not disclosed to the consumer who may be eligible for a lower interest rate; and

WHEREAS, The Board will also discuss the issue of consumers being extended a loan which they can not afford. This occurs when lenders extend a loan without adequately considering the borrower's ability to repay the loan; and

WHEREAS, The subprime lending industry has grown rapidly in Philadelphia during the last few years; and

WHEREAS, Some of these lenders aggressively market high-cost home loans that borrowers are unable to repay and engage in other unfair credit practices that strip retirees and working families of t...