By Dave Gatton and Alex Stillwell, USCM Intern
October 22, 2007

At the Mortgage Bankers Association of America annual convention in Boston, U.S. Conference of Mayors President Trenton (NJ) Mayor Douglas H. Palmer was awarded the “2007 Investing in Communities Award” October 16. Palmer was recognized for his commitment to the economic investment and development in New Jersey’s capital city of Trenton. The mayor has helped bring over a half billion dollars in development to downtown Trenton projects, including a $74 million dollar train station renovation, a redeveloped brownfield site and a $175 million dollar green Trenton Town Center project.

Under Palmer’s leadership, Trenton has attracted 100 new businesses, produced 1600 new homes for working families, relocated a regional bank headquarters, and constructed a new baseball stadium.

“The citizens of Trenton and I are proud of what we have accomplished over the last few years and the projects we have launched,” Palmer told over 3,000 MBA delegates. “We have done it with hard work, creativity, commitment and private sector investment for a city that is on the rise.”

Palmer then took the opportunity to address the national mortgage industry’s current problems in the face of dramatically increasing delinquency and foreclosure rates.

Palmer noted that the mortgage market had made capital available to many families who otherwise would not have been able to buy their first home. “But, many families were given loans they did not completely understand or could not afford,” he bluntly told the audience. “Some were subjected to out-and-out predatory lending,” he said.

Many individuals were sold loans over the last two years, which had very low “teaser” rates that will be replaced by much higher interest rates over the next couple of years. Experts say as many as two million mortgages could face interest rate resets over the coming year alone.

Palmer encouraged homeowners who are in trouble or have at-risk loans to call for help and to call their lender before it is too late. “Once they call, we ask you, the lending industry, to help them save their home if they have an honest shot of doing so. No one benefits from hundreds of thousands of people losing their homes,” Palmer stated.

With that in mind, Palmer has charged the Conference of Mayors to host a discussion between non-profit organizations, mortgage lending corporations, federal agencies, investors and mayors to develop a strategy to promote homeownership preservation, avoid foreclosure and to provide property maintenance when foreclosures occur.

The discussion will be hosted by Detroit Mayor Kwame Kilpatrick, chair of the Council for the New American City, to be held in Detroit November 26 and 27. Many organizations have already committed to come to the meeting, including the Mortgage Bankers Association. “I expect this effort to develop major initiatives by our annual meeting in January of 2008,” Kilpatrick said.

A U.S. Conference of Mayors’ resolution, passed at the Conference’s annual meeting in Los Angeles in June, calls for implementation of practices that would increase the borrower’s understanding of loan terms; the tighter regulation of mortgage brokers; and tougher federal lending standards that increase protections for consumers and improve the mortgage lending process.