GOLDBERG & CONNOLLY REPRESENTS THE TOWN OF BABYLON, NY IN LEGAL ACTION FILED AGAINST FANNIE MAE AND FREDDIE MAC IN FEDERAL COURT FOR KILLING GREEN HOMES PROGRAM

NEW YORK-November 11, 2010-Goldberg & Connolly is pleased to announce the recent
filing of an action on behalf of the Town of Babylon, New York against the Federal Home Loan
Mortgage Corporation (Freddie Mac), the Federal National Mortgage Association (Fannie Mae),
the Federal Housing Finance Agency (FHFA), and others in the United States District Court,
Eastern District of New York.

The Town of Babylon's action seeks a judicial declaration that recent changes to the mortgage
underwriting guidelines of these federal agencies seriously impacts the continued viability of
Babylon's innovative Green Homes Program (LIGH). The lawsuit seeks to vacate and set aside
their violation of federal and state laws and the Tenth Amendment of the U.S. Constitution due
to the alleged overreaching of the federal defendants into state and local government matters.
"We applaud the Town of Babylon for seeking federal court intervention to enjoin the federal
defendants from blocking the Town's efforts," said Henry L. Goldberg, Babylon Town Attorney
in the matter. "Through its innovative LIGH Program, Babylon is helping both its residents and
the environment and taking a leadership role by providing a national model for fostering a
cleaner environment."

Babylon's Energy Retrofit Financing LIGH Program
Since 2008, Babylon's LIGH program has provided hundreds of modest loans to residents for
home energy improvements including more efficient heating systems and insulation. The
program has resulted in over 600 greener, more efficient homes, reduced carbon emissions by
approximately four tons and reduced home operating costs. The program creates a significant
number of green jobs in the community and reduces annual energy bills by $1,000 on average.
The highly successful program provides residents with repayment terms of up to 10 years. In
most instances, the cost savings as a result of reduced energy use are in excess of the monthly
repayment amount.

Underwriting Standards Restrict Mortgage Lending to LIGH Participants
In July 2010, FHFA instructed Fannie Mae and Freddie Mac to restrict mortgage lending
opportunities to homeowners in municipalities that offer home energy retrofit programs,
including LIGH or PACE. Now, many national banks also refuse mortgages to borrowers in these
areas. Both banks and the federal mortgage agencies claim improvement assessments are
allegedly detrimental to the banks by increasing their risk because LIGH or PACE has first
repayment priority before a new or existing mortgage.

Babylon contends that their modest loans, averaging about nine thousand dollars, do not pose
any real risk to the lender due to the reduction in the homeowner's energy costs and the
increase in the value of the improved home, which would actually be a benefit to the mortgage
banks. If the lawsuit is not successful, the restriction of mortgages to LIGH or PACE
municipalities may lead to an end for these successful energy saving programs.