2012 -- S 3052

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LC02776

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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S E N A T E R E S O L U T I O N

ESTABLISHING A SPECIAL SENATE COMMISSION TO STUDY HOMEOWNER LOAN

MODIFICATION PROGRAMS WITHIN THE STATE OF RHODE ISLAND

     Introduced By: Senators Moura, Ciccone, Ruggerio, Pinga, and Metts

     Date Introduced: June 07, 2012

     Referred To: Recommended for Immediate Consideration

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     WHEREAS, The State of Rhode Island was ranked among the top ten states in the nation

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and the highest state in New England for home foreclosures rates; and

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     WHEREAS, Rhode Island homeowners have been particularly hit hard by the mortgage

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crisis, with one in four homeowners currently “underwater” on their mortgages, meaning that

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their home is worth less than the outstanding balance due on the mortgage on the property; and

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     WHEREAS, The mortgage crisis resulted from a number of causes in the housing and

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credit markets, including an increase in non-traditional mortgages such as risky subprime loans,

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substandard underwriting practices by lenders, and unstable risk-management practices; and

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     WHEREAS, Local communities lost significant tax revenue through the banks’

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fraudulent behavior and the total estimated cost to a municipality can be more than $34,000 per

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foreclosed property; and

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     WHEREAS, The Federal Housing Finance Agency (FHFA) is responsible for oversight

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of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan

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Mortgage Corporation (Freddie Mac), and has a statutory responsibility to maximize assistance

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for homeowners to minimize foreclosures; and

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     WHEREAS, Freddie Mac and Fannie Mae own a majority of our state’s and nation’s

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home loans, and the Home Affordability Modification Program (HAMP) was established to assist

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homeowners who are underwater or behind in payments to lower monthly mortgage payments to

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thirty-one percent of one’s monthly gross income; and

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     WHEREAS, Despite significant attempts by Rhode Islanders to remain in their homes

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through the loan modification process, they still face significant obstacles, delays, and mounting

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fees that further prolong the process and benefit the companies and loan servicers; and

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     WHEREAS, Effectively examining this foreclosure crisis at the local level and resolving

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this issue are key to restoring a healthy economy for Rhode Island and our entire country; now,

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therefore be it

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     RESOLVED, That a special legislative commission to be known as the “Special Senate

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Commission to Study Homeowner Loan Modification Programs Within The State of Rhode

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Island” be and the same is hereby created consisting of three (3) members: three (3) of whom

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shall be members of the Senate, not more than two (2) of whom shall be from the same political

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party, to be appointed by the President of the Senate.

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     In lieu of any appointment of a member of the legislature to a permanent advisory

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commission, a legislative study commission, or any commission created by a General Assembly

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resolution, the appointing authority may appoint a member of the general public to serve in lieu

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of a legislator, provided that the majority leader or the minority leader of the political party which

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is entitled to the appointment consents to the member of the general public.

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     The purpose of said commission shall be to conduct a series of hearings with experts

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from the financial industry, banking industry, and homeowners that will:

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     (1) Fully examine current Rhode Island data and FHFA standards for homeowners that

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have attempted or completed a loan modification program; and

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     (2) Develop a comprehensive report with recommendations and specific guidelines to the

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FHFA on loan modification standards, to be shared with the Rhode Island Congressional

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Delegation; and be it further

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     RESOLVED, That forthwith upon passage of this resolution, the members of the

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commission shall meet at the call of the Senate President, who shall select a chairperson.

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Vacancies in said commission shall be filled in like manner as the original appointment.

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     All departments and agencies of the State shall furnish such advice and information,

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documentary and otherwise, to said commission and its agents as is deemed necessary or

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desirable by the commission to facilitate the purposes of this resolution.

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     The Joint Committee on Legislative Services is hereby authorized and directed to provide

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suitable quarters for said commission; and be it further

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     RESOLVED, That the commission shall report its findings and recommendations to the

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Senate no later than March 7, 2013, and said commission shall expire on May 9, 2013.

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LC02776

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

S E N A T E R E S O L U T I O N

ESTABLISHING A SPECIAL SENATE COMMISSION TO STUDY HOMEOWNER LOAN

MODIFICATION PROGRAMS WITHIN THE STATE OF RHODE ISLAND

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     This resolution would create a three (3) member special legislative commission whose

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purpose would be to conduct a series of hearings with experts from the financial industry,

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banking industry, and homeowners, and who would report back to the Senate no later than March

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7, 2013, and whose life would expire May 9, 2013.

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LC02776

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