U.S. Mayors Stand for the Protection of Homeowners

According to the United States Conference of Mayors, an appeal has been submitted to the Federal Reserve Board to intervene and act in favor of the homeowners and to protect them from abusive and unlawful activities. Homeowners are scared of mortgage foreclosures because of these unlawful activities. US Conference of Mayor's appeal is in leadership of its president Trenton Mayor, Douglas H.Palmer. The Federal Reserve Board is empowered to take actions and initiatives under the provisions of Home Ownership and Equity Protection Act (HOEPA),

The letter submitted to Federal Reserve Board express the content of this appeal. Mayors are requesting to the Federal Reserve Board to define the strict norms and impose a fair limit, to pre-payment penalties. This in no case should be applicable after the expiry of teaser rates in AMR prime and sub-prime loans. The Conference of Mayors is also requesting for a mandatory provision of escrows for all loans. It demands a cover of protection for general loaners. Establishment of clearly defined procedure for submission of documents of income and a guideline for underwriting at maximum possible rate above fully indexed rate are also included in the letter of request, according to the Conference of Mayors.

This action of Conference of Mayors is an outcome of series of discussions. The Conference organized its Annual Meeting in Los Angeles on June 22-26, 2007 and identified specific ways to address the issue. It finally drafted a "Call for Policy" paper and sought legislative and regulatory measures. According to an estimate nearly two million families are expected to face financial problems and possible foreclosures by the end of this year. It will be a result of an upward movement of "adjustable rate Mortgages (ARM)". Nearly $1.4 trillion will be adjusted with this higher ARM. . "We cannot wait to the next wave of bad news to intervene on behalf of working people. The abusive lending has to stop," said Douglas H. Palmer President, US Conference of Mayors.