12-R329

2012 -- S 3052

Enacted 06/07/12

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

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

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

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

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

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

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

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

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

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

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

foreclosed property; and

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

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

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

for homeowners to minimize foreclosures; and

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

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

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

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

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

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

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

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

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

therefore be it

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

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

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

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

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

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

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

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

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

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

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

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

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

have attempted or completed a loan modification program; and

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

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

Delegation; and be it further

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

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

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

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

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

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

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

suitable quarters for said commission; and be it further

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

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

=======

LC02776

=======