PRINTER'S NO. 2536
No. 418 Session of 2007
INTRODUCED BY JAMES, WILLIAMS, MYERS, KIRKLAND, THOMAS,
BELFANTI, BLACKWELL, CALTAGIRONE, CLYMER, CRUZ, DONATUCCI,
FREEMAN, GEORGE, GINGRICH, HANNA, HARKINS, HERSHEY, HORNAMAN,
JOSEPHS, MAHONEY, M. O'BRIEN, PETRARCA, PETRONE, PHILLIPS,
RAMALEY, READSHAW, K. SMITH, SOLOBAY, STABACK, STURLA,
TANGRETTI, WALKO, WATERS, YOUNGBLOOD, GRUCELA, PARKER,
J. WHITE, KULA, WOJNAROSKI, BRENNAN AND R. TAYLOR,
OCTOBER 2, 2007
REFERRED TO COMMITTEE ON INTERGOVERNMENTAL AFFAIRS,
OCTOBER 2, 2007
A RESOLUTION
1 Memorializing Congress to take emergency action to protect
2 homeowners and banks and enact a Homeowners and Banks
3 Protection Act.
4 WHEREAS, The onrushing financial crisis involving home
5 mortgages, debt instruments of all types and the banking system
6 of the United States threatens to set off an economic collapse
7 worse than the Great Depression of the 1930s; and
8 WHEREAS, Millions of Americans are faced with foreclosure and
9 loss of their homes over the coming months; and
10 WHEREAS, The hedge funds which spread this financial collapse
11 among markets worldwide, by dominating speculation in all those
12 markets, are now going bankrupt and demanding government bailout
13 of their securities and derivatives, and the nominal value of
14 the derivatives based on mortgages alone is the size of the
15 combined GDP of the nations of the world; and
1 WHEREAS, This financial crisis threatens the integrity of
2 both Federal and State chartered banks, as typified by the run
3 on deposits of Countrywide Financial Corporation in California
4 on August 16, which could wipe out the life savings of too many
5 American people and drastically undermine the economic stability
6 of our states and cities; and
7 WHEREAS, Under similar circumstances in the 1930s, President
8 Franklin D. Roosevelt successfully intervened to protect banks
9 and homeowners, addressing Congress with a "declaration of
10 national policy" on April 13, 1933, which stated "that the broad
11 interests of the Nation require that special safeguards should
12 be thrown around home ownership as a guarantee of social and
13 economic stability, and that to protect homeowners from
14 inequitable enforced liquidation in a time of general distress
15 is a proper concern of the Government"; therefore be it
16 RESOLVED, That the House of Representatives of the
17 Commonwealth of Pennsylvania call upon Congress to take
18 emergency action to protect homeowners and banks by enacting a
19 Homeowners and Banks Protection Act specifically to:
20 (1) Establish a Federal agency to place Federal and
21 State chartered banks under protection, freezing all existing
22 home mortgages for a period of time, adjusting mortgage
23 values to fair prices, restructuring existing mortgages at
24 appropriate interest rates and writing off speculative debt
25 obligations of mortgage-backed securities, financial
26 derivatives and other forms of financial pyramid schemes that
27 have brought the banking system to the point of bankruptcy.
28 (2) Declare a moratorium on all home foreclosures for
29 the duration of the transitional period, allowing families to
30 retain their homes. Monthly payments, the equivalent of
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1 "rental payments," shall be made to designated banks, which
2 can use the funds as collateral for normal lending practices,
3 thus recapitalizing the banking system. These affordable
4 monthly payments will be factored into new mortgages,
5 reflecting the orderly deflating of the housing bubble, the
6 establishment of appropriate property valuations and reduced
7 fixed mortgage interest rates. While this may take several
8 years to achieve, in the interim period no homeowner shall be
9 evicted from his or her property, and the Federal and State
10 chartered banks shall be protected so that they can resume
11 their traditional functions, serving local communities and
12 facilitating credit for investment in productive entities.
13 (3) Authorize governors of several states to assume the
14 administrative responsibilities for implementing the program,
15 including the "rental" assessments to designated banks, with
16 the Federal Government providing the necessary credits and
17 guarantees to assure the successful transition;
18 and be it further
19 RESOLVED, That a copy of this resolution be transmitted to
20 the President of the United States and to each member of the
21 Pennsylvania Congressional delegation for immediate action.
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