HomeMy WebLinkAbout12674I RESOLUTION NO. 12,674
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3 A RESOLUTION TO CALL UPON SUBPRIME MORTGAGE LENDERS, SERVICERS
4 FOR PROPERTIES AND ADJUSTABLE RATE HOME MORTGAGES LOCATED IN
5 THE CITY OF LITTLE ROCK TO BE SENSITIVE TO THE IMPACT OF HOME
6 FORECLOSURES ON THE LOCAL ECONOMY AND SURROUNDING PROPERTIES;
7 TO SEEK CREATIVE METHODS NOT TO FORECLOSE ON THESE PROPERTIES
8 AND TO DELAY FORECLOSURE FOR A SIX MONTH PERIOD OF TIME; AND FOR
9 OTHER PURPOSES.
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11 WHEREAS, defaults on home mortgages increased by sixty percent (60 %) in February 2008, and this
12 increase is consistent with the epidemic of foreclosures throughout the United States; and
13 WHEREAS, on February 6,2008, one hundred and sixty -one (161) foreclosure notices were posted in
14 the Pulaski County Courthouse for homes located with the corporate limits of the City of Little Rock;
15 and,
16 WHEREAS, ninety -four (94) of these foreclosure notices were for homes located in low- to- middle-
17 income neighborhoods in zip codes 72201, 72204, 72206 and 72209; and,
18 WHEREAS, foreclosures not only impact the homeowners involved, but also result in the diminution
19 of property values for surrounding homes and neighborhoods; and,
20 WHEREAS, estimates of the over thirty -three million dollars ($33,000,000.00) in Pulaski foreclosures
21 for the period of 2005 -2006, 26.7 percent (26.7%), or eight million, eighth hundred and seventy
22 thousand, three hundred and fourteen dollars ($8,870,314.00) of which were caused because of
23 foreclosures on subprime mortgage loans or adjustable rate mortgages which were adjusted to
24 substantially higher interest rates; and,
25 WHEREAS, such loss in property values because of this foreclosures not only have an immediate
26 impact upon displaced home owners, but also contribute to the deterioration of neighborhoods and
27 communities, and for less affluent neighborhoods can be devastating to their continued viability; and,
28 WHEREAS, the U.S. House of Representatives has under consideration H.R. 3915, S. 2452, and S.
29 2636, and which would provide limitations on lenders to avoid a similar crisis in the future and
30 industry and congressional leaders are seeking additional measures that could ameliorate the impact of
31 a potential financial crisis in local communities; and
32 WHEREAS, subprime loans and adjustable rate mortgages are often prevalent in lower income and
33 minority neighborhoods because lenders take advantage home buyers through such actions as "yield
34 spread premiums," which involve higher closing costs which help protect the lending agency; and,
35 WHEREAS, the lending community is definitely a critical partner in efforts by the public and private
36 sectors to address the mortgage foreclosure crisis which has already created considerable concern for
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Resolution re: mortgage foreclosure crisis
I homeowners, the mortgage industry, the national banking industry, and the general economic well -
2 being of the Country; and,
3 WHEREAS, time is needed to identify issues and approaches that can positively resolve the crisis
4 hundreds of Little Rock residents face due to foreclosures that result from subprime loans;
5 NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF LITTLE ROCK
6 ARKANSAS:
7 Section 1. The Board of Directors encourages mortgage lenders and servicers in Little Rock, to
8 delay foreclosures for the next six months, and to seek alternative options to foreclosure, while at the
9 same time permitting, to the extent possible under federal regulations, homeowners to continue to
10 make mortgage payments in an amount the homeowner has demonstrated in the past an ability to do
11 without facing foreclosure.
12 Section 2. The Board of Directors calls upon these lenders and servicers to make every effort to
13 delay foreclosures and seek creative alternatives to address the mortgage crisis during this period that
14 will allow affected homeowners to remain in their homes
15 Section 3. The Board of Directors calls upon these lenders and servicers to meet with the City to
16 discuss creative alternatives to home foreclosures, and to provide additional information on activities
17 and programs under way to alleviate this economic crisis within the State, Pulaski County, and the City.
18 Section 4. The Board of Directors directs the City Clerk to forward copies of this Resolution to the
19 Arkansas congressional delegation so the opposition of the City to such practices can be properly
20 expressed in the Congress.
21 Section 5. Severability. In the event any title, section, paragraph, item, sentence, clause, phrase,
22 or word of this resolution is declared or adjudged to be invalid or unconstitutional, such declaration or
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adjudication shall not affect the remaining portions of the resolution which shall remain in full force
and effect as if the portion so declared or adjudged invalid or unconstitutional was not originally a part
of the resolution.
Section 6. Repealer. All laws, ordinances, resolutions, or parts of the same, that are inconsistent
with the provisions of this resolution are hereby repealed to the extent of such inconsistency.
ADOPTED: April 1, 2008
ATTEST: APPROV
Nancp Wood, y1dy Clerk Mark Stodola, Mayor
APPROVED AS TO LEGAL FORM: SPONSOR:
Thomas M. Carpenter, City AtJorney
Resolution re: mortgage foreclosure crisis
Ken Richardson, Director, Ward 2
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