TITLE
Recemmendatio that the City Council approve the following:
a) Direct City Manager and City Treasurer to return to the City Council within 30 days with a report about:
· The soundness of short and long-term investments in Bank of America, Freddie Mac (Federal Home Loan Mortgage Corporation) and Fannie Mae (Federal National Mortgage Association);
· The status of all state and federal legal actions against these entities;
· Alternative investments available;
· The number of mortgages currently held on Long Beach properties by Bank of America, Freddie Mac and Fannie Mae;
· The number of foreclosures processed on Long Beach properties by Bank of America, Freddie Mac and Fannie Mae in the past five years; and
· The number of business loans made by Bank of America to Long Beach businesses in the past three years.
b) Direct City Manager to send a letter to these financial entities expressing the sense of the Mayor and the City Council that because of our large investments we are demanding that every effort be taken to prevent the foreclosures of residential properties in Long Beach, including but not limited to loan modification and extension of the foreclosure process; and that we further demand that business loans be made available to businesses on a reasonable basis to enable these small businesses to create additional jobs.
DISCUSSION
The City of Long Beach invests cash in excess of $176 million in both Union Bank and Bank of America. Additionally, the City's short-term and long-term investment portfolio amounts to tens of millions invested in Freddie Mac (Federal Home Loan Mortgage Corporation) and Fannie Mae (Federal National Mortgage Association). Numerous lawsuits have been filed against FHLM and FNMA because they have invested their portfolio in high risk, low quality mortgages that carried high risks and subsequently resulted in massive losses. Additionally, both agencies guaranteed billions of dollars of sub-prime, high-risk mortgages sold to other...
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