Anyone decided what to do about Cleveland? We are debating the issue and hope to make a decision by the end of next week..... just curious if anyone else is willing to say what they're going to do. I've heard at least one big lender is pulling out.

I think that ARM loans will be scarce because of the "at any time during the life of the loan" language. How are servicers going to track the actual APR over the life of the loan? I am not sure about fixed rate lenders, and what they will do. I also heard a rumor that one big lender is pulling out, but I have not confirmed this yet.

Can someone clue me in on what's being discussed here?

A quick recap: Cleveland (city of) passed an ordinance banning predatory lending. The ordinance is pretty onerous and definitely exceeds both Federal and State law - in fact, a week later the State passed its own law saying cities weren't allowed to make up their own predatory lending laws. The Cleveland ordinance was appealed and stayed, but the appeal was denied so it is now in effect, pending another appeal or overruling by the state.

Their definitions of predatory and high-cost lending are very broad, and all it takes is 5% of total loans outstanding, OR 10 individual loans in a rolling 12 month period for a lender to be qualified as a high-cost or predatory lender. And the list of such lenders becomes public. And if you're classified as such, you can't participate in any city programs or hold city deposits or have shares owned by the city.

Plus they've got a disclosure that must be given to all home improvement customers, and one that has to be filed with every mortgage deed you record.

All in all, lending in Cleveland just got no fun.

And as bad as it is in Cleveland, I'm afraid Colorado is about to get worse.

That City Council is a lobbyist's dream come true! I'll be sympathizing with you while I'm thanking my management for staying out of Cleveland (and Colorado!!).

Thanks for clearing that up. Based on the original question, I thought maybe long-suffering Cleveland sports fans were about to take retaliatory action. Now I know it's just the bankers who will do so.

ExGovtBabe,
Do you know where/how I can get a copy of the ordinance? We have some branches in the Cleveland Area, though not in Cleveland proper. This is the first that I have heard about it. It sounds like we may have to evaluate our lending in that market. I need something to do as soon as I finish our Customer Information Program

The Mortgage Banker's site has it: (I hope this works). Banks are (sort of) exempt. But my mortgage company affiliate is not. And loans we buy are not depending upon who the lender is. This is not a great law.

MBAA

Kathleen's right, that MBAA site is great. They also have the Colorado statute if anyone is looking for that. Florida's got a new law, Georgia's got a new law, everyone else is contemplating a new law.....

I guess I'll just consider it job security. Make ourselves experts on the various statutes and how to lend in those areas and they can't get rid of us, right?? (everyone say RIGHT!)

Florida's Law follows HOEPA fairly closely and is somewhat easier to implement. Georgia's law is more complicated than it should be and will be difficult and costly to implement.

here's some more info on how lenders are handling the situation in Cleveland:

Some Lenders Pull Plug on Cleveland Mortgages

Cleveland Buyers Can Still Find Lenders

Last week, the MBA only had the March, 2002 ordinance on its web site. The amended April, 2002 ordinance is what you want. It may be up on the MBA web site now. VMP has the amended ordinance at http://www.vmpforms.com/comp_update/ord737-02.pdf and it is at http://www.clelaw.lib.oh.us/Public/Misc/Pred_lend.doc in word format.