I 

112TH CONGRESS 

1ST SESSION H. R. 3129 

To establish the Family Foreclosure Rescue Corporation to provide emergency 

relief to refinance home mortgages of homeowners in foreclosure or default. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 6, 2011 

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

on Financial Services, and in addition to the Committee on Ways and 

Means, for a period to be subsequently determined by the Speaker, in 

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To establish the Family Foreclosure Rescue Corporation to 

provide emergency relief to refinance home mortgages 

of homeowners in foreclosure or default. 

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 ‘‘Family Foreclosure 

5 Rescue Corporation Act’’. 

6 SEC. 2. PURPOSES. 

7 The purposes of this Act are to provide emergency 

8 relief with respect to home mortgage indebtedness through 


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1 the establishment of a corporation to directly refinance 

2 home mortgages to homeowners currently in foreclosure, 

3 serious default, or with a reasonable expectation of immi4 nent, sustained default and— 

5 (1) to extend relief to the owners of homes oc6 cupied by them and who are unable to amortize their 

7 debt elsewhere, including those homeowners whose 

8 outstanding mortgage indebtedness exceeds the value 

9 of their home due to recent declines in the housing 

10 market; 

11 (2) to provide necessary funds for refinancing 

12 without reliance on liquidity and credit availability in 

13 private markets; 

14 (3) to stabilize neighborhoods by reducing fore15 closures and the downward impact on house prices 

16 created by the threat of widespread foreclosure; 

17 (4) to encourage loan originators and servicers 

18 to modify the terms of existing nonperforming loans 

19 to obligations that borrowers can reasonably repay; 

20 (5) to provide mortgage assistance in an effi21 cient manner at minimal to no cost to the taxpayer, 

22 with corporate profits returned to the Treasury of 

23 the United States; and 

24 (6) to minimize the impacts of the current 

25 mortgage crisis on the broader economy. 


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1 SEC. 3. DEFINITIONS. 

2 For purposes of this Act, the following definitions 

3 shall apply: 

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

5 means the Family Foreclosure Rescue Corporation 

6 established under section 4. 

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

8 Board of Directors of the Corporation. 

9 (3) HOME MORTGAGE.—The term ‘‘home mort10 gage’’ means a first mortgage on real estate— 

11 (A)(i) in fee simple, upon which there is lo12 cated a dwelling for not more than four fami13 lies; 

14 (ii) on a leasehold under a renewable lease 

15 for not less than 99 years, upon which there is 

16 located a dwelling for not more than four fami17 lies; or 

18 (iii) that is a single unit in a condominium; 

19 and 

20 (B) has a value not exceeding the lower 

21 of— 

22 (i) 125 percent of the local area me23 dian home price; or 

24 (ii) 175 percent of the dollar amount 

25 limitation for a single-family residence 

26 then in effect under section 305(a)(2) of 


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1 the Federal Home Loan Mortgage Cor2 poration Act (12 U.S.C. 1454(a)(2)). 

3 (4) SECRETARY.—The term ‘‘Secretary’’ means 

4 the Secretary of the Treasury. 

5 SEC. 4. ESTABLISHMENT. 

6 The Secretary of the Treasury shall establish a cor7 poration to be known as the Family Foreclosure Rescue 

8 Corporation, which shall be an instrumentality of the 

9 United States, and which shall have authority to sue and 

10 to be sued in any court of competent jurisdiction, Federal 

11 or State. 

12 SEC. 5. BOARD. 

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

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

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

16 as the Board may prescribe for the accomplishment of the 

17 purposes and intent of this Act. 

18 (b) MEMBERS.—The Board shall consist of seven 

19 members, as follows: 

20 (1) Two of the members shall be appointed by 

21 the President. 

22 (2) Four of the members shall be appointed by 

23 President from among a list of 10 nominees selected 

24 jointly by the Speaker of the House of Representa25 tives and the majority leader of the Senate. 


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1 (3) The Secretary shall serve as an ex officio 

2 member of the Board. 

3 SEC. 6. CAPITAL STOCK. 

4 (a) IN GENERAL.—The Corporation shall have cap5 ital stock subscribed to by the Secretary on behalf of the 

6 United States Government in such amount as the Sec7 retary may determine to be appropriate, to the extent pro8 vided in advance in an appropriation Act for any fiscal 

9 year, but not to exceed in the aggregate $200,000,000. 

10 (b) CERTIFICATES.—Certificates evidencing shares of 

11 nonvoting capital stock of the Corporation shall be issued 

12 by the Corporation to the Secretary, to the extent of pay13 ments made for the capital stock of the Corporation. 

14 (c) PUBLIC DEBT TRANSACTION.—For the purpose 

15 of purchasing shares of capital stock of the Corporation, 

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

17 proceeds of any securities issued under chapter 31 of title 

18 31, United States Code. 

19 SEC. 7. BORROWING. 

20 (a) ISSUANCE.—The Corporation may issue bonds in 

21 an aggregate amount not to exceed $150,000,000,000, 

22 which may be sold by the Corporation to obtain funds for 

23 carrying out the purposes of this Act, or exchanged as 

24 hereinafter provided. Such bonds shall be issued in such 

25 denominations as the Board shall prescribe, shall mature 


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1 within a period of not more than 30 years from the date 

2 of their issue, shall bear interest at a rate not to exceed 

3 5 percent annually, and shall be fully and unconditionally 

4 guaranteed as to principal and interest by the United 

5 States, and such guaranty shall be expressed on the face 

6 thereof. 

7 (b) PAYMENT.—The Corporation shall make bond 

8 payments of accrued interest plus principal in the amount 

9 sufficient to return the principal within a period not to 

10 exceed 30 years, and such payments may be made month11 ly, quarterly, semiannually, or annually, in the discretion 

12 of the Corporation. Outstanding principal and accrued in13 terest shall be paid to the bond holder in the event that 

14 the mortgage issued in exchange for that bond is paid off 

15 or title to the underlying property is transferred by sale 

16 or foreclosure. 

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

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

19 interest on any such bonds, the Secretary shall pay to the 

20 Corporation the amount of such interest, which is hereby 

21 authorized to be appropriated to the Corporation, and the 

22 Corporation shall pay the amount of such interest to the 

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

24 by the Secretary, the amount so paid shall become an obli25 gation of the Corporation to the United States and shall 


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1 bear interest at the same rate as that borne by the bonds 

2 upon which the interest has been so paid. 

3 (d) TREATMENT.—The bonds issued by the Corpora4 tion under this section shall be exempt, both as to prin5 cipal and interest, from all taxation (except surtaxes, es6 tate, inheritance, and gift taxes) now or hereafter imposed 

7 by the United States or any District, Territory, depend8 ency, or possession thereof, or by any State, county, mu9 nicipality, or local taxing authority. 

10 SEC. 8. TREATMENT OF CORPORATION. 

11 The Corporation, including its franchise, its capital, 

12 reserves, and surplus, and its loans and income, shall be 

13 exempt from taxation referred to in section 7(c), except 

14 that any real property of the Corporation shall be subject 

15 to taxation to the same extent, according to its value, as 

16 other real property is taxed. 

17 SEC. 9. EMERGENCY MORTGAGE RELIEF. 

18 (a) ACQUISITION OF MORTGAGES.—The Corporation 

19 may, during the three-year period that begins upon the 

20 date of the enactment of this Act— 

21 (1) acquire in exchange for bonds issued by the 

22 Corporation, home mortgages and other obligations 

23 and liens secured by real estate (including the inter24 est of a vendor under a purchase-money mortgage or 

25 contract) recorded or filed in the proper office or exVerDate Mar 15 2010 22:37 Oct 11, 2011 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3129.IH H3129

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1 ecuted prior to the date of the enactment of this 

2 Act, which are currently in default or at foreseeable 

3 risk of default, except that— 

4 (A) in the event that the home mortgage 

5 was placed in a trust or other qualified special 

6 purpose vehicle for the purposes of 

7 securitization, acceptance of Corporation bonds 

8 by a duly appointed servicer as payment in full 

9 for the purchase of the home mortgage shall be 

10 construed as a nonforeclosure alternative to the 

11 termination of a loan, equivalent to a short sale 

12 or short payoff; 

13 (B) the face value of the bonds so ex14 changed and the cash so advanced shall not ex15 ceed, in any case, the principal balance plus ac16 crued interest on that balance (exclusive of ad17 ditional fees incurred as part of lender workouts 

18 and similar actions), as of the time of acquisi19 tion by the Corporation, as determined by an 

20 appraisal made by the Corporation; and 

21 (C) in any case in which the amount of the 

22 face value of the bonds exchanged plus accrued 

23 interest thereon and the cash advanced is less 

24 than the amount the homeowner owes with re25 spect to the home mortgage or other obligation 


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1 or lien so acquired by the Corporation, the Cor2 poration shall credit the difference between 

3 such amounts to the homeowner and shall re4 duce the amount owed by the homeowner to the 

5 Corporation, to that extent; and 

6 (2) in connection with any such exchange, make 

7 advances in cash to pay the taxes and assessments 

8 on the real estate, to meet the incidental expenses of 

9 the transaction, and to pay such amounts, not ex10 ceeding $750, to the holder of the mortgage, obliga11 tion, or lien acquired as may be the difference be12 tween the face value of the bonds exchanged and the 

13 purchase price of the mortgage, obligation, or lien. 

14 (b) AMORTIZATION.—Each home mortgage or other 

15 obligation or lien so acquired shall be carried as a first 

16 lien or refinanced as a home mortgage by the Corporation 

17 on the basis of the price paid for the mortgage, obligation, 

18 or lien by the Corporation, and shall be amortized by 

19 means of monthly payments sufficient to retire the inter20 est and principal within a period of not to exceed 30 years; 

21 but the amortization payments of any homeowner may be 

22 made quarterly, semiannually, or annually, if in the judg23 ment of the Corporation the situation of the homeowner 

24 requires it. 


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1 (c) MAXIMUM INTEREST RATE.—Interest on the un2 paid balance of the obligation of the homeowner to the 

3 Corporation shall be at a rate not exceeding 7.5 percent 

4 annually. 

5 (d) EXTENSIONS.—The Corporation may at any time 

6 grant an extension of time to any homeowner for the pay7 ment of any installment of principal or interest owed by 

8 the homeowner to the Corporation if, in the judgment of 

9 the Corporation, the circumstances of the homeowner and 

10 the condition of the security justify such extension. 

11 (e) REDEMPTION AND RECOVERY OF FORECLOSED

12 PROPERTIES.—The Corporation may, during the 3-year 

13 period described in subsection (a), exchange bonds and ad14 vance cash subject to the limitations provided in sub15 section (a), to redeem or recover homes lost by the owners 

16 by foreclosure or forced sale by a trustee under a deed 

17 of trust or under power of attorney, or by voluntary sur18 render to the mortgagee within 2 years prior to such ex19 change or advance. 

20 (f) REAL ESTATE.—As used in this section, the term 

21 ‘‘real estate’’ includes only real estate described in section 

22 3(3). 

23 SEC. 10. NONDISCRIMINATION. 

24 (a) LOCATION OF REAL ESTATE.—No discrimination 

25 shall be made under this Act against any home mortgage 


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1 by reason of the fact that the real estate securing such 

2 mortgage is located in a municipality, county, or taxing 

3 district which is in default upon any of its obligations. 

4 (b) CHARACTERISTICS OF APPLICANTS.—The Cor5 poration is prohibited from discriminating in its lending 

6 behavior based on the race, color, religion, sex, national 

7 origin, age, disability, or familial status of the applicant 

8 or applicants. 

9 SEC. 11. DENIAL OF APPLICATIONS. 

10 (a) AUTHORITY TO DENY.—The Corporation may 

11 deny a home mortgage application on the grounds of an 

12 applicant’s inability to pay or excess indebtedness, as de13 termined by credit score, household income and assets, or 

14 other criteria, to be determined by the Board or its des15 ignees. 

16 (b) COUNSELING.—The Corporation shall provide ap17 plicants who are denied a home mortgage issued by the 

18 Corporation information sufficient to identify and contact 

19 a housing counseling provider serving the local area in 

20 which the applicant resides who has been certified pursu21 ant to section 106(f) of the Housing and Urban Develop22 ment Act of 1968 (12 U.S.C. 1701x(f)). 

23 SEC. 12. DISPOSITION OF REAL ESTATE. 

24 In the event the Corporation takes possession of real 

25 estate through foreclosure, voluntary transfer of title, or 


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1 otherwise, the Corporation shall dispose of the real estate 

2 in a manner that minimizes adverse impacts on neigh3 boring property values by staggering sales so as not to 

4 create an excess supply of properties for sale or by offering 

5 properties for rent until disposition is possible. The Cor6 poration may make necessary repairs to Corporation7 owned property to maintain the value of the property and 

8 to prepare it for disposition. 

9 SEC. 13. APPRAISALS. 

10 The Board shall make rules for the appraisal of the 

11 property on which loans are made under this Act, to ac12 complish the purposes of this Act. 

13 SEC. 14. OTHER PROVISIONS. 

14 (a) OFFICERS AND EMPLOYEES.—The Corporation 

15 shall have power to select, employ, and fix the compensa16 tion of such officers, employees, attorneys, or agents as 

17 shall be necessary for the performance of its duties under 

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

19 applicable to the employment or compensation of officers, 

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

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

22 compensation at a rate in excess of the rate provided for 

23 the members of the Board. 

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

25 United States mails in the same manner and under the 


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1 same conditions as other departments and agencies of the 

2 United States. 

3 (c) SALARIES AND EXPENSES.—The Corporation 

4 shall pay such proportion of the salary and expenses of 

5 the members of the Board and of its officers and employ6 ees as the Board may determine to be equitable, and may 

7 use the facilities of Federal Home Loan Banks, upon mak8 ing reasonable compensation for such use, as determined 

9 by the Board. 

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

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

12 inconsistent with the provisions of this Act, as may be nec13 essary for the proper conduct of the affairs of the Corpora14 tion. 

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

16 retire and cancel the bonds and stock of the Corporation 

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

18 Upon the retirement of such stock, the reasonable value 

19 thereof as determined by the Board shall be paid into the 

20 Treasury of the United States and the receipts issued 

21 therefor shall be canceled. 

22 SEC. 15. LIQUIDATION. 

23 The Board shall proceed to liquidate the Corporation 

24 when its purposes have been accomplished, and shall pay 

25 any surplus or accumulated funds into the Treasury of 


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1 the United States. The Corporation may declare and pay 

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

3 as in the judgment of the Board it is proper for the Cor4 poration to pay. 

Æ 


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