I 

110TH CONGRESS 

2D SESSION H. R. 5649 

To establish the Home Owners’ Loan Corporation to provide emergency 

home mortgage relief. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 14, 2008 

Mr. KIRK introduced the following bill; which was referred to the Committee 

on Financial Services 

A BILL 

To establish the Home Owners’ Loan Corporation to provide 

emergency home mortgage relief. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Home Owners’ Loan 

5 Corporation for the 21st Century Act’’. 

6 SEC. 2. ESTABLISHMENT. 

7 (a) IN GENERAL.—There is established a corporation 

8 to be known as the Home Owners’ Loan Corporation, 

9 which shall be an instrumentality of the United States, 


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1 and which shall have authority to sue and to be sued in 

2 any court of competent jurisdiction, Federal or State. 

3 (b) TREATMENT OF CORPORATION.—The Corpora4 tion, including its franchise, its capital, reserves, and sur5 plus, and its loans and income, shall be exempt from tax6 ation referred to in section 6(c), except that any real prop7 erty of the Corporation shall be subject to taxation to the 

8 same extent, according to its value, as other real property 

9 is taxed. 

10 SEC. 3. BOARD. 

11 (a) IN GENERAL.—The Corporation shall be under 

12 the direction of a Board of Directors and shall be operated 

13 by the Board under such bylaws, rules, and regulations 

14 as the Board may prescribe for the accomplishment of the 

15 purposes and intent of this Act and the prudent use of 

16 the capital and authority of the Corporation. 

17 (b) MEMBERS.—The Board shall consist of five mem18 bers, as follows: 

19 (1) The Secretary of the Treasury, or the des20 ignee of the Secretary. 

21 (2) The Comptroller General of the United 

22 States, or the designee of the Comptroller. 

23 (3) A designee of the Board of Directors of the 

24 Federal Deposit Insurance Corporation. 


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1 (4) The Secretary of Housing and Urban Devel2 opment, or the designee of the Secretary. 

3 (5) The Director of the Office of Federal Hous4 ing Enterprise Oversight of the Department of 

5 Housing and Urban Development (or any successor 

6 agency of such Office responsible for supervision and 

7 regulation of the Federal National Mortgage Asso8 ciation and the Federal Home Loan Mortgage Cor9 poration), or the designee of the Director. 

10 (c) NO COMPENSATION.—Members of the Board 

11 shall serve as such directors without additional compensa12 tion. 

13 SEC. 4. CAPITAL STOCK. 

14 (a) IN GENERAL.—The Corporation shall have cap15 ital stock, $25,000,000,000, which shall be subscribed to 

16 by the Secretary of the Treasury on behalf of the United 

17 States Government. The Corporation shall issue to the 

18 Secretary of the Treasury receipts for payments by the 

19 Secretary for or on account of such stock, and such re20 ceipts shall be evidence of the stock ownership of the 

21 United States. Payments for such subscriptions shall be 

22 subject to call in whole or in part by the Board and shall 

23 be made at such time or times as the Secretary of the 

24 Treasury deems advisable. 


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1 (b) PUBLIC DEBT TRANSACTION.—For the purpose 

2 of purchasing shares of capital stock of the Corporation, 

3 the Secretary may use as a public-debt transaction the 

4 proceeds of any securities issued under chapter 31 of title 

5 31, United States Code. 

6 SEC. 5. MINIMUM CAPITAL RATIO REQUIREMENTS. 

7 The Board shall on an annual basis establish a min8 imum capital ratio requirement for the Corporation and 

9 the Corporation shall at all times hold such capital as may 

10 be required to comply with the applicable annual ratio. 

11 Such ratio shall be risk-adjusted to reflect the Corpora12 tion’s direct and indirect credit exposure, and may not be 

13 lower than the minimum capital ratio required for similar 

14 financial institutions under the international guidelines 

15 and standards for capital adequacy issued by the Basel 

16 Committee on Banking Supervision established by the 

17 Bank for International Settlements. 

18 SEC. 6. BORROWING AUTHORITY. 

19 (a) ISSUANCE.— 

20 (1) AUTHORITY.—The Corporation may issue 

21 bonds in an aggregate amount not to exceed 

22 $300,000,000,000, which may be sold by the Cor23 poration to obtain funds for carrying out the pur24 poses of this Act, or exchanged as hereinafter pro25 vided. 


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1 (2) TERMS.—Such bonds shall be issued in 

2 such denominations as the Board shall prescribe, 

3 shall mature within a period of not more than 10 

4 years from the date of their issue, and shall be fully 

5 and unconditionally guaranteed as to interest only 

6 by the United States, and such guaranty shall be ex7 pressed on the face thereof. The bonds shall bear in8 terest at a rate determined by the Board and ap9 proved by the Secretary of the Treasury prior to 

10 issue. 

11 (3) ISSUANCE THROUGH GINNIE MAE.—The 

12 Corporation may issue bonds under this subsection 

13 through the Government National Mortgage Associa14 tion and the Association is hereby authorized to pro15 vide for such issuance, subject to the aggregate 

16 amount limitation under paragraph (1). 

17 (b) TREASURY BORROWING.—In the event that the 

18 Corporation is unable to pay upon demand, when due, the 

19 interest or principal on any such bonds, the Secretary of 

20 the Treasury shall pay to the Corporation the amount of 

21 such interest or principal, which is hereby authorized to 

22 be appropriated to the Corporation, and the Corporation 

23 shall pay the amount of such interest or principal to the 

24 holders of the bonds. Upon the payment of such interest 

25 or principal by the Secretary, the amount so paid shall 


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1 become an obligation of the Corporation to the United 

2 States and shall bear interest at the same rate as that 

3 borne by the bonds upon which the interest or principal 

4 has been so paid. 

5 (c) TREATMENT.—The bonds issued by the Corpora6 tion under this section shall be exempt, both as to prin7 cipal and interest, from all taxation (except surtaxes, es8 tate, inheritance, and gift taxes) now or hereafter imposed 

9 by the United States or any District, Territory, depend10 ency, or possession thereof, or by any State, county, mu11 nicipality, or local taxing authority. 

12 SEC. 7. MORTGAGE RELIEF. 

13 (a) ACQUISITION OF MORTGAGES.— 

14 (1) AUTHORITY.—The Corporation may, during 

15 the three-year period beginning upon the date of the 

16 enactment of this Act— 

17 (A) to acquire in exchange for bonds 

18 issued by the Corporation, home mortgages and 

19 other obligations and liens secured by real es20 tate (including the interest of a vendor under a 

21 purchase-money mortgage or contract) recorded 

22 or filed in the proper office or executed before 

23 the date of the enactment of this Act; and 

24 (B) in connection with any such exchange, 

25 to make advances in cash to pay the taxes and 


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1 assessments on the real estate, to provide for 

2 necessary maintenance and make necessary re3 pairs, to meet the incidental expenses of the 

4 transaction, and to pay such amounts, not ex5 ceeding $200 or such greater amount as may be 

6 approved by the Board, to the holder of the 

7 mortgage, obligation, or lien acquired as may be 

8 the difference between the face value of the 

9 bonds exchanged plus accrued interest thereon 

10 and the purchase price of the mortgage, obliga11 tion, or lien. 

12 (2) LIMITATIONS.— 

13 (A) IN GENERAL.—The face value of bonds 

14 exchanged pursuant to paragraph (1) for any 

15 home mortgage or other obligation or lien se16 cured by real estate, plus accrued interest 

17 thereon and any cash advanced pursuant to 

18 paragraph (1)(B), shall not exceed such limits 

19 as the Board may establish, but shall not in 

20 any case exceed the lesser of— 

21 (i) $900,000; or 

22 (ii) 90 percent of the fair market 

23 value of the real estate involved, as deter24 mined by an appraisal made by the Cor25 poration. 


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1 (B) UPSIDE-DOWN MORTGAGES.—In any 

2 case in which the amount of the face value of 

3 the bonds exchanged plus accrued interest 

4 thereon and the cash advanced is less than the 

5 amount the home owner owes with respect to 

6 the home mortgage or other obligation or lien 

7 so acquired by the Corporation, the Corporation 

8 shall credit the difference between such 

9 amounts to the home owner and shall reduce 

10 the amount owed by the home owner to the 

11 Corporation to that extent. 

12 (3) AMORTIZATION.—Each home mortgage or 

13 other obligation or lien acquired by the Corporation 

14 pursuant to this section shall be carried as a first 

15 lien or refinanced as a home mortgage by the Cor16 poration on the basis of the price paid by the Cor17 poration for the mortgage, obligation, or lien, and 

18 shall be amortized by means of monthly payments 

19 sufficient to retire the interest and principal within 

20 a period of not to exceed 40 years. 

21 (4) PAYMENTS BY HOME OWNER.— 

22 (A) TIMING.—Notwithstanding paragraph 

23 (3), the amortization payments of any home 

24 owner may be made quarterly, semiannually, or 


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1 annually, if in the judgment of the Corporation 

2 the situation of the home owner so requires. 

3 (B) FHA CONFORMING INTEREST RATES

4 AND TERMS.—The Corporation shall set terms 

5 for repayment of the unpaid balance of the obli6 gation of the home owner to the Corporation 

7 that are consistent with the rates and terms 

8 being offered at the time for mortgages on real 

9 estate of a similar type that are insured under 

10 title II of the National Housing Act (12 U.S.C. 

11 1707 et seq.), as adjusted for risk premiums to 

12 be established by the Board. 

13 (C) EXTENSION.—The Corporation may at 

14 any time grant an extension of time to any 

15 home owner for the payment of any installment 

16 of principal or interest owed by the home owner 

17 to the Corporation if, in the judgment of the 

18 Corporation, the circumstances of the home 

19 owner and the condition of the security justify 

20 such extension, and no payment of any install21 ment of principal shall be required during the 

22 three-year period beginning upon the date of 

23 the enactment of this Act if the home owner is 

24 not in default with respect to any other condiVerDate Aug 31 2005 21:38 Apr 03, 2008 Jkt 069200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H5649.IH H5649

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1 tion or covenant of the mortgage of the home 

2 owner. 

3 (b) NONDISCRIMINATION.—No discrimination shall 

4 be made under this Act against any home mortgage by 

5 reason of the fact that the real estate securing such mort6 gage is located in a municipality, county, or taxing district 

7 which is in default upon any of its obligations. 

8 (c) CASH LOANS ON UNENCUMBERED PROPERTY.— 

9 (1) AUTHORITY.—The Corporation may, during 

10 the three-year period beginning upon the date of the 

11 enactment of this Act, make loans in cash subject to 

12 the same limitations and for the same purposes for 

13 which cash advances may be made under subsection 

14 (a), in cases in which the property is not otherwise 

15 encumbered. 

16 (2) LIMITATION ON AMOUNT.—A loan pursuant 

17 to this subsection may not exceed 50 percent of the 

18 value of the property securing the loan, as deter19 mined upon an appraisal made by the Corporation. 

20 (3) TERMS.—Each such loan shall— 

21 (A) be secured by a duly recorded home 

22 mortgage; 

23 (B) bear interest at the same rate; and 

24 (C) be subject to the same provisions with 

25 respect to amortization and extensions as are 


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1 applicable in the case of obligations refinanced 

2 under subsection (a). 

3 (d) CASH ADVANCES FOR REDEMPTION OF FORE4 CLOSED HOMES.—The Corporation may, during the 

5 three-year period beginning upon the date of the enact6 ment of this Act, exchange bonds and advance cash, sub7 ject to the limitations provided in subsection (a), to re8 deem or recover homes lost by the owners by foreclosure 

9 or forced sale by a trustee under a deed of trust or under 

10 power of attorney, or by voluntary surrender to the mort11 gagee within two years prior to such exchange or advance. 

12 (e) APPRAISALS.—The Board shall establish rules for 

13 the appraisal of the property on which loans are made 

14 under this section to accomplish the purposes of this Act. 

15 (f) BONDS ACCEPTED IN PAYMENT.—Any person in16 debted to the Corporation may make payment to the Cor17 poration in part or in full by delivery to the Corporation 

18 of its bonds, which shall be accepted by the Corporation 

19 for such purpose at face value. 

20 SEC. 8. OTHER PROVISIONS. 

21 (a) OFFICERS AND EMPLOYEES.—The Corporation 

22 shall have power to select, employ, and fix the compensa23 tion of such officers, employees, attorneys, or agents as 

24 shall be necessary for the performance of its duties under 

25 this Act, without regard to the provisions of other laws 


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1 applicable to the employment or compensation of officers, 

2 employees, attorneys, or agents of the United States. No 

3 such officer, employee, attorney, or agent shall be paid 

4 compensation at a rate in excess of market rates as docu5 mented by the Corporation. In carrying out its duties 

6 under this section, the Corporation shall utilize the serv7 ices of private persons, including real estate and loan port8 folio asset management, property management, auction 

9 marketing, and brokerage services, if such services are 

10 available in the private sector and the Corporation deter11 mines utilization of such services is practicable and effi12 cient. Compensation paid to members of the Board shall 

13 not exceed the rate provided by law. 

14 (b) USE OF MAILS.—The Corporation may use the 

15 United States mails in the same manner and under the 

16 same conditions as other departments and agencies of the 

17 United States. 

18 (c) SALARIES AND EXPENSES.—The Corporation 

19 shall pay such proportion of the expenses of the members 

20 of the Board, and such proportion of the salaries and ex21 penses of its officers and employees, as the Board deter22 mines to be equitable, and may use the facilities of Federal 

23 Home Loan Banks, upon making reasonable compensation 

24 for such use, as determined by the Board. 


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1 (d) BYLAWS, RULES, AND REGULATIONS.—The 

2 Board may make such bylaws, rules, and regulations, not 

3 inconsistent with the provisions of this Act, as may be nec4 essary for the proper conduct of the affairs of the Corpora5 tion. 

6 (e) RETIREMENT OF STOCK.—The Corporation shall 

7 retire and cancel the bonds and stock of the Corporation 

8 as rapidly as the resources of the Corporation will permit. 

9 Upon the retirement of such stock, the reasonable value 

10 of the stock as determined by the Board shall be paid into 

11 the Treasury of the United States and the receipts issued 

12 therefor shall be canceled. 

13 (f) OPERATING EXPENSES.—The Board shall provide 

14 for the operating expenses of the Corporation to be met 

15 through use of any returns on investments and loans of 

16 the Corporation. 

17 SEC. 9. LIQUIDATION. 

18 The Board shall proceed to liquidate the Corporation 

19 when its purposes have been accomplished, and shall pay 

20 any surplus or accumulated funds into the Treasury of 

21 the United States. The Corporation may declare and pay 

22 such dividends to the United States as may be earned and 

23 the Board, in its judgment, determines it is proper for 

24 the Corporation to pay. 


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1 SEC. 10. DEFINITIONS. 

2 For purposes of this Act, the following definitions 

3 shall apply: 

4 (1) CORPORATION.—The term ‘‘Corporation’’ 

5 means the Home Owners’ Loan Corporation estab6 lished under section 2. 

7 (2) BOARD.—The term ‘‘Board’’ means the 

8 Board of Directors of the Corporation. 

9 (3) REALESTATE.—The term ‘‘real estate’’ 

10 means real estate— 

11 (A)(i) upon which there is located a dwell12 ing— 

13 (I) for not more than four families; 

14 and 

15 (II) that is used by the owner of the 

16 dwelling as a principal residence; and 

17 (ii) that is held in fee simple or on a lease18 hold under a renewable lease for not less than 

19 99 years; and 

20 (iii) that has a value not exceeding 

21 $1,000,000; or 

22 (B)(i) consisting of a one-family unit in a 

23 multifamily project, including a project in which 

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1 tached, that is used by the owner as a principal 

2 residence; 

3 (ii) that is held in fee simple or on a long4 term leasehold, together with an undivided in5 terest in the common areas and facilities that 

6 serve the project; and 

7 (iii) that has a value not exceeding 

8 $500,000. 

Æ 


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