Number
151204
Version
Substitute 1
Reference
141900, 150721
Sponsor
ALD. MURPHY AND WADE
Sections
200-22.6 rp
200-33-46.5 rp
Title
A substitute ordinance relating to the registration of residential mortgage loans in default.
Analysis
This ordinance repeals all code provisions relating to the City’s registration of residential loans-in-default program, scheduled to become effective January 1, 2016.
Body
Whereas, Common Council File Number 141900, passed on June 23, 2015, established a residential mortgage loans-in-default registry to become effective on January 1, 2016, to provide opportunities for homeowners at risk of mortgage loan foreclosure to connect with agencies and not-for-profit organizations to help them negotiate repayment plans and loan modifications with their lending institutions or mortgage servicers to bring their loans into compliance in order to avoid mortgage foreclosure and to retain home ownership; and
Whereas, The ordinance created by this file was intended to be temporary, and included a sunset clause ending the program after 3 years on January 1, 2019, unless reauthorized by the Common Council; and
Whereas, Since passage of this file, the City entered into an agreement with Nationstar Mortgage, and expects to negotiate similar agreements with other major mortgage servicers like Ocwen Financial Corporation, which call for servicers to have face-to-face meetings with borrowers in default to arrange repayment plans and loan modifications to help these borrowers bring their mortgages into compliance so they can avoid foreclosure and retain home ownership; and
Whereas, Even without City agreements with servicers, servicers like Nationstar and Ocwen have been participating in borrower outreach efforts to promote loan modification and foreclosure avoidance; and
Whereas, The City has also met with Fannie Mae since passage of this file, and believes Fannie Mae’s mortgage servicing guidelines, which require, among other things, foreclosure-prevention strategies, borrower outreach, and consideration of loan workout options prior to and during foreclosure, can be an effective tool to help borrowers in default avoid foreclosure and retain home ownership; and
Whereas, The City will continue meeting with Fannie Mae, and will also meet with Freddie Mac and the Federal Housing Authority (FHA), as stipulated in the City’s agreement with Nationstar, regarding opportunities to help borrowers in default on mortgages avoid foreclosure; and
Whereas, The voluntary agreement with Nationstar Mortgage, and anticipated agreements with other major mortgage loan servicers, along with provisions of Fannie Mae’s loan servicing guidelines obviate any current need for the City to implement and maintain the residential mortgage loans-in-default registry; now, therefore
The Mayor and Common Council of the City of Milwaukee do ordain as follows:
Part 1. Section 200-22.6 of the code is repealed.
Part 2. Section 200-33-46.5 of the code is repealed.
LRB
APPROVED AS TO FORM
____________________________
Legislative Reference Bureau
Date: ______________________
Attorney
IT IS OUR OPINION THAT THE ORDINANCE
IS LEGAL AND ENFORCEABLE
____________________________
Office of the City Attorney
Date: ______________________
Requestor
Drafter
LRB#161744-2
Aaron Cadle
December 3, 2015