11-R375

2011 -- S 1054

Enacted 06/16/11

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

RESPECTFULLY URGING NATIONAL BANKS TO PARTICIPATE IN THE LOAN MODIFICATION PROGRAM OF THE HARDEST HIT FUND PROGRAM IN RHODE ISLAND

Introduced By: Senators Pichardo, Tassoni, Miller, Jabour, and Perry

Date Introduced: June 16, 2011

     WHEREAS, Rhode Island ranks as the highest among New England states in both

foreclosure starts and serious delinquencies. During the two-year period from January 2009

through December 2010, there were a total of 4,738 actual foreclosures filed in Rhode Island; and

     WHEREAS, Over the last couple of years, the foreclosure crisis has affected an average

of 13,750 Rhode Island home-owning families every quarter, either through foreclosure or serious

delinquency. This translates into roughly one in every 10 homeowners in our state; and

     WHEREAS, A foreclosure dramatically erodes the tax base, adding to intense pressure

on municipalities to raise taxes on other property owners; and

     WHEREAS, Unsound lending practices contributed to the rapid escalation of home

prices and Rhode Island's subsequent foreclosure crisis. The foreclosure crisis has been a major

factor in Rhode Island's continuing high rate of unemployment, which has lead to further

mortgage delinquencies and foreclosures; and

     WHEREAS, The housing market remains in a severe recession. Until the housing market

recovers, the economic recovery is imperiled; and

     WHEREAS, The U.S. Treasury has made available to Rhode Islanders $80 million to

help those at risk of losing their homes through the Hardest Hit Fund Program (HHFRI). The goal

of HHFRI is to prevent avoidable foreclosures by helping homeowners who are unable to make

their mortgage payments due to a hardship such as job loss or under-employment. This fund

includes a Loan Modification Program; and

     WHEREAS, Local and community banks in Rhode Island have demonstrated a

willingness to participate in the Loan Modification Program and work with delinquent customers

to keep them in their homes and avoid foreclosure; and

     WHEREAS, No requirements exist on the national level requiring national banks to

participate in the Loan Modification Program of the Hardest Hit Fund; and

     WHEREAS, No national lender has agreed to participate in the Loan Modification

Program of the Hardest Hit Fund in Rhode Island despite the fact the program provides

significant financial incentives for lenders to participate; and

     WHEREAS, The goal in achieving a Loan Modification is to establish new mortgage

payment levels that are sufficiently affordable to the borrowers so that they can avoid

foreclosures, and by preventing foreclosure, reduce the financial loss to the lender; now, therefore

be it

     RESOLVED, That this Senate of the State of Rhode Island and Providence Plantations

hereby urges national banks to voluntarily participate in the Loan Modification Program of the

Hardest Hit Fund in Rhode Island; and be it further

     RESOLVED, That national lenders and servicers make a good faith effort to reach an

agreement with each Rhode Island homeowner to fairly re-negotiate the terms of burdensome

mortgage loans; and be it further

     RESOLVED, That the Secretary of State be and he hereby is authorized and directed to

transmit a duly certified copy of this resolution to the Rhode Island Mortgage Bankers

Association.

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LC02864

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