08-495RESOLUTION
OF SA1NT PAUL, M
Presented by
Council File # �g ���
Green Sheet # 3053457
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1 WHEREAS, the Center for Responsible Lending estimated in a December 2006 report that one in five
2 subprime loans will end up in foreclosure (°Losing Gi•ound: Foreclosures in the Subprime Market and
3 Their Cost to Homeowners " Center for Responsible Lending (December 19. 2006); and
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5 WHEREAS, many homeowners with subprime ARMs have not been able to refinance due to the
6 stagnation or decrease in home values("The Subpt Meltdown- A Primer", National Economic
7 Research Association, June 21, 20DY�; and
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WHEREAS, more than two-thirds of subprime loans have prepayment penalties, compared to just 2% of
prime loans (`Blame the Borrowers? Not So Fast ", Gretchen Morgenson, The New York Times, November
25, 1007); and
WHEREAS, prepayment penalties trap borrowers into subprime loans with high or adjustable rates ("The
Subprime Meltdown- A Primer, " National Economic Research Association, June 21, 200�; and
WHEREAS, some mortgage brokers and lenders made loans to families who could not afford the loan
("The Subprime Meltdown--A Primer, " National Economic Research Association, June 21, 200�; and
WHEREAS, 46% of subprime loans made in 2006 required little or no income documentation ("Subprime
�Liar Loans' Fuel Bust With $1 Billion Fraud ", Bloomberg News, April 25, 2007); and
WHEREAS, subprime loans have led to an increase in foreclosure rates which hurts Saint Paul
neighborhoods as well as the families who are losing their homes; and
WAEREAS, the City of Saint Paul has pxojected a 30 percent inerease in foreclosures compared to 2007,
as well as identified over 1,700 Vacant and Boarded properties which cost Saint Paul millions in city
services and law enforcement; and, now therefore
BE IT RESOLVED, that the City of Saint Paul calls on the 25 lazgest subprime mortgage lenders and
servicers in the country to voluntarily agree to a three-month suspension on fareclosures of owner-
occupied properties in Saint Paul; and, be it
FURTHER R�+ SOLVED, that the City of Saint Paul calls on these lenders and servicers to make every
effort during the suspension period to help their customers avoid foreclosure and remain in their homes,
including modifying loans by reducing the interest rate and/or the principal to achieve an affordable
monthly payment; and, be it
FURTHER IiESOLVED, that the City of Saint Paul encourages lenders holding rental properties to keep
these properties occupied with tenants for as long as possible; and, be it
66 � �f95
40 FINALLY RESOLVED, that the City of Saint Paul encourages these companies to continue to work with
41 Saint Paul and community-based organizations during the suspension period to reach those homeowners
42 who aze not communicating with the servicer.
Requested by Department of:
Adopted by Council: Date �✓/ �i 1
Adoptio� Certified by Cou il Secreta��n,�
By: �
Approved b a Date s/L! �p$
By:
By:
Approved by the Office of Financial Services
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Approved by City Attorney
By:
Approved by Mayor for Submission to Council
By:
� Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet �
b�'�95
C� - Council
Contact Person 8 Phone:
Joan Reidell
266-8610
Must tie on Gouncil Agenda Dy (Date
14-MAY-08
Doc. Type: RESOLUTION
E-Document Required: Y
Document Contact: Joan Reidell
Contact Phone: 266-8610
07-MAY-08
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Assign
Num6er
For
Rou[ing
Order
Total # of Signature Pages _(Clip All Locations for Signature)
Green Sheet NO: 3053457
0 ooncil
1 oaned De arhnentDirector
2 i C7erk
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Requesting the 25 lazgest subprime mortgage lenders and servicers in the country to voluntarily agree to a three-month suspension
on foreclosures of owner-occupied properties in Saint Paul.
idations: Approve (A) or R
Planning Commission
CIB Committee
Civil Service Commission
1. Has this person/frm ever worked under a contract for this department?
Yes No
2. Has this person/firm ever been a city employee?
Yes No
3. Does this person�rm possess a skill not normally possessed by any
cortent city empioyee?
Yes No
Explain all yes answers on separate sheet and attach to green sheet
Initiating Problem, Issues, Opportunity (Who, What, When, Where, Why):
Advantages If Approved:
Disadvantages If Approved:
Disadvantages If Not Approved:
Transaction:
Funding Source:
Financial Information:
(Explain)
CostlRevenue Budgeted:
Activiry Number.
May 7, 2008 2:06 PM Page 1