An Informed Discussion of Nontraditional Mortgage Products and Other Risks

The Federal Reserve Bank of Chicago, Consumer and Community Affairs Division, will host a conference titled, "An Informed Discussion of Nontraditional Mortgage Products and Other Risks," on Wednesday, January 31, 2007. The conference will be held at the Reserve Bank, located at 230 South LaSalle Street, in Chicago.

This timely and interactive conference will provide a forum exploring predatory lending, mortgage and mortgage rescue fraud, and the risks posed by nontraditional mortgage products. "Nontraditional," "alternative," or "exotic" mortgage products are residential loans that include "interest-only" and "payment option" adjustable-rate mortgages that allow borrowers to defer repayment of principal and sometimes interest. These products allow borrowers to exchange lower payments during an initial period for higher payments later.

The program will include a broad overview of the issues, a dialogue on regulatory considerations, and a more focused discussion of the central issues as seen from key perspectives.

This conference will:

• focus attention on the issues, risks, and opportunities surrounding nontraditional mortgage products and abusive lending processes;

• draw on the expertise of recognized experienced practitioners who deal with nontraditional mortgage products and abusive lending products;

• identify best practices, partnerships and information sharing arrangements that would be mutually beneficial for financial institutions, community development professionals, capital markets, government agencies, and researchers addressing the risks posed by nontraditional mortgage products and abusive lending programs; and

• spur future policy-oriented research that builds on the experience of financial institutions, community development professionals, capital markets, and government agencies.

Topics in the morning include an overview of the subject, an up-to-the-minute regulatory update, and a panel discussion among practitioners who represent the diverse perspectives that are impacted by this important topic at a national level.

The keynote luncheon speaker, Thomas James, State of Illinois, assistant attorney general, Consumer Fraud unit, will discuss updates on Illinois' initiatives to combat predatory lending, mortgage and mortgage rescue fraud. We will then close with a panel of local practitioners discussing various techniques and programs to avoid or resolve predatory issues.

There is no charge for the conference; however, attendance will be limited to allow for active participation by all attendees. As a result, conference reservations will be accepted on a first-received basis. Registration deadline is Friday, January 26.