SENATOR BETHANY MOURA RI STATE SENATE DISTRICT 19 (Cumberland/Lincoln)

For Immediate Release 2011 Contact: Senator Bethany Moura 401.996.3008

January 9,

Freshman RI Senator levels serious allegations at Fannie Mae & Freddie Mac Thursday, January 5th was a great day for Rhode Islanders who have been forced to the courts for a fair chance to keep their homes. Last week, Judge John McConnell appointed Merrill Sherman as Special Master to facilitate and oversee fair and equitable negotiations between the litigating parties. His order was insightful, courageous and sent a powerful message. However, help is desperately needed for the homeowners who are not in the court system and being bullied and abused by investors and loan servicers in a loan modification process designed to fail. As a full-time loss mitigation specialist for Pawtucket Attorney George Babcock, Senator Moura has a unique perspective. Attorney Babcock is one of the attorneys largely responsible for the enormous number of foreclosure cases in RI courts. This is where she has amassed an arsenal of notes, files and other examples of the reckless disregard Fannie Mae, Freddie Mac and their servicers have for our struggling homeowners. Senator Moura goes on to explain, Its been my experience that Fannie Mae and Freddie Mac are behind an overwhelming majority of the foreclosures and loan modification failures in our state. Though homeowners may be making their mortgage payments to entities such as Bank of America, Wells Fargo or Chase, those are merely the companies servicing the loan on behalf of the investor. Fannie Mae and Freddie Mac are making the decisions and declining loan modifications in favor of foreclosure. Senator Moura goes on to question the logic behind turning down homeowners who want to repay their loans under revised terms, but are denied and foreclosed on. Fannie and/or Freddie take an enormous loss up-front and elect to do so. For her, the alarms went off when Freddie Mac recently asked Congress for $124 Billion dollars. Moura says, I believe they are intentionally creating these huge losses in mortgage defaults so they can justify on paper their requests for hundreds of billions in taxpayer money. The longer they take to review modification applications, the further behind the homeowners end up, the higher the arrearage gets, the larger the investor loss appears, therefore making a modification that much harder to qualify for. The perfect storm has been created.

Senator Moura has actively fought for this to stop. She communicates with the Department of the U.S. Treasury Office of the Comptroller of Currency and the policy advisors of the FHFA (oversees Fannie and Freddie). She has met with Senate leadership, the Governor and his policy staff, as well as fellow legislators. In fact, Im working on forming a bi-partisan coalition with legislators in both chambers to stop this from continuing in our state, Moura says. My intent is to enact change any way that I can, and am committed to being a resource for leadership in the General Assembly. Ive seen the devastation first-hand, and had my own experience with a dishonest loan servicer and a foreclosure. Its a battle Im still fighting, but have turned my frustration and experience into motivation. Moura states, Watching them beat families into submission, to eventually surrender their homes is something you have to see to believe. They rip families and communities apart, destroy property values, and leave in their wake a sea of emotional wreckage that cannot be measured. It is unbelievably cruel and despicable. This first-term Senator is so confident in her suspicions, shes challenging the top executives of Fannie Mae and Freddie Mac to appear in Rhode Island in a public forum to defend her allegations head on and face-to-face. Her message to them is simple. Bring your attorneys and your staff, and Ill have my notes, files and homeowners from Westerly to Woonsocket. Since you believe you are entitled to their money, I believe they are entitled to your answers, declares Moura. In this arena, I am a force to be reckoned with. Whether this fight takes a day or a decade, I will not retreat. They can bank on it (pun intended).