Miami-Dade
Legislative Item File Number: 073692 |
Printable PDF Format Clerk's Official Copy |
File Number: 073692 | File Type: Resolution | Status: Adopted | ||||||
Version: 0 | Reference: R-1390-07 | Control: Board of County Commissioners | ||||||
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Requester: NONE | Cost: | Final Action: 12/18/2007 | ||||||
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Sunset Provision: No | Effective Date: | Expiration Date: |
Registered Lobbyist: | None Listed |
Legislative History |
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Acting Body | Date | Agenda Item | Action | Sent To | Due Date | Returned | Pass/Fail |
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Board of County Commissioners | 12/18/2007 | 14A2 | Adopted | P | |||
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County Manager | 12/14/2007 | Additions | 12/18/2007 | ||||
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County Attorney | 12/13/2007 | Assigned | Thomas H. Robertson | 12/14/2007 | |||
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Legislative Text |
TITLE RESOLUTION URGING THE FEDERAL RESERVE BOARD TO RESTRICT OR CONTROL THE USE OF ADJUSTABLE INTEREST RATES; ELIMINATE OR RESTRICT PREPAYMENT PENALTIES; REQUIRE ESCROWS FOR TAXES AND INSURANCE FOR SUB-PRIME LOANS BODY WHEREAS, the sub-prime lending industry has grown rapidly in Miami-Dade County during the last few years; and WHEREAS, some mortgage brokers and sub-prime 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 the equity they have in their homes; and WHEREAS, approximately 80% of sub-prime loans have adjustable interest rates that will increase after two years; and WHEREAS, sub-prime lenders have made these adjustable rate mortgages without regard for whether the borrower will be able to afford the payments after the rate increases; and WHEREAS, many borrowers with adjustable rate sub-prime loans were never given a choice between an adjustable or fixed rate or were promised a fixed rate but given an adjustable rate; and WHEREAS, approximately 70% of the sub-prime loans were refinancing loans for families who had already bought a home; and WHEREAS, more than two-thirds of sub-prime loans have prepayment penalties, compared to just 2% of prime loans; and WHEREAS, prepayment penalties trap borrowers into sub-prime loans with high or adjustable rates and strip their equity; and WHEREAS, less than half of all sub-prime loans include taxes and insurance in the monthly payment; and WHEREAS, many borrowers of sub-prime loans want to have their taxes and insurance included in their monthly payment, and many borrowers have been mislead to believe their payment includes taxes and insurance; and WHEREAS, many borrowers end up in foreclosure when they have to make a lump sum payment of their taxes and insurance; and WHEREAS, these practices are commonly referred to as "predatory lending"; and WHEREAS, these predatory loans have led to an increase in foreclosure rates which hurts the families who are losing their homes as well as the neighborhoods where there are a concentration of foreclosed homes; and WHEREAS, these vacant homes attract crime and cost Miami-Dade County money in crime prevention and the deterioration of neighborhoods; and WHEREAS, many families have not had an opportunity to modify their loans to make them affordable; and WHEREAS, the federal Home Ownership and Equity Protection Act (HOEPA) instructs the Federal Reserve Board to protect consumers from predatory lending (15 U.S.C. � 1639(L)(2)) ; and WHEREAS, any regulations issued by the Federal Reserve would have the same effect as law and would cover all mortgage lenders in the country, NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MIAMI-DADE COUNTY, FLORIDA, that this Board: Section 1. Urges the Federal Reserve Board to enact regulations that: A) Restrict and/or regulate the use of Adjustable Rate Mortgages in the sub-prime market; B) Eliminate or restrict the use of prepayment penalties; and C) Require the use of escrow accounts for the collection of money to pay for taxes and insurance on sub-prime mortgages. Section 2. Directs the Clerk of the Board to transmit certified copies of this resolution to the Chairman of the Federal Reserve Board. Section 3. Directs the County's federal lobbyists to advocate for the issues identified in section 1 above, and directs the Office of Intergovernmental Affairs to include this item in the 2008 federal legislative package. |
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