Providence, RI – With Rhode Island and many other states still struggling to climb out of the foreclosure crisis, U.S. Senator Sheldon Whitehouse (D-RI) has called for a national foreclosure moratorium following revelations that some mortgage servicers were not following legal procedures to remove families from their homes. Specifically, Whitehouse has written to the heads of Fannie May and Freddie Mac, as well as Fed Chairman Ben Bernanke, to ask that they put a stop to foreclosures on mortgages that they hold or control.
“My state of Rhode Island leads our region in foreclosures, and I have seen firsthand the devastation that losing a home brings a family,” wrote Whitehouse. “Until the major loan servicers demonstrate that they (1) are making every reasonable effort to keep families in their homes through loan modifications and/or forbearance; and (2) have the capacity to properly and respectfully carry out foreclosures, I ask that you impose a moratorium on all foreclosures on homes that secure the mortgages you hold or control.”
Last month, it was revealed that a manager at Ally Financial had ignored verification procedures before signing off on thousands of foreclosure documents. The individual testified that he had failed to properly review cases, and had also ignored a requirement that he sign foreclosure documents in the presence of a notary. Since then, a number of other mortgage servicers have also admitted to similar errors.
The full text of Whitehouse’s letter is below.
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October 7, 2010
Michael J. Williams, President and Chief Executive Officer
Fannie Mae
3900 Wisconsin Avenue, N.W.
Washington, D.C. 20016
Dear Mr. Williams:
With an estimated two million American families facing foreclosure this year, I write to you over reports that Ally Financial and other major loan servicers have been cutting corners and rubber-stamping foreclosure documents without proper review. Loan servicers should make every effort and take every care to avoid an outcome which may leave a family without a home. In circumstances where no reasonable efforts can postpone an inevitable foreclosure, the homeowner deserves a respectful and supervised foreclosure process.
Until the major loan servicers demonstrate that they (1) are making every reasonable effort to keep families in their homes through loan modifications and/or forbearance; and (2) have the capacity to properly and respectfully carry out foreclosures, I ask that you impose a moratorium on all foreclosures on homes that secure the mortgages you hold or control. Until that time, homeowners should be permitted to remain in and keep title to their homes.
My state of Rhode Island leads our region in foreclosures, and I have seen firsthand the devastation that losing a home brings a family. I have also seen how horrible the experience is for customers dealing with these big banks and servicers. Foreclosure should be a final resort, to be exercised with care and only when reasonable efforts to modify mortgages fail. Thank you for your prompt attention to this sensitive and urgent request. I ask that you keep me apprised of your plans to prevent and forestall foreclosures.
Sincerely,
Sheldon Whitehouse
United States Senator
Identical letters sent to Charles E. Haldeman, Jr., Chief Executive Officer of Freddie Mac; and Ben S. Bernanke, Chairman of the Board of Governors of the Federal Reserve System.
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