serious default, or with a reasonable expectation of immi-
nent, sustained default and— 
(1) to extend relief to the owners of homes oc-
cupied by them and who are unable to amortize their 
debt elsewhere, including those homeowners whose 
outstanding mortgage indebtedness exceeds the value 
of their home due to recent declines in the housing 
market; 
(2) to provide necessary funds for refinancing 
without reliance on liquidity and credit availability in 
private markets; 
(3) to stabilize neighborhoods by reducing fore-
closures and the downward impact on house prices 
created by the threat of widespread foreclosure; 
(4) to encourage loan originators and servicers 
to modify the terms of existing non-performing loans 
to obligations that borrowers can reasonably repay; 
(5) to provide mortgage assistance in an effi-
cient manner at minimal to no cost to the taxpayer, 
with corporate profits returned to the Treasury of 
the United States; and 
(6) to minimize the impacts of the current 
mortgage crisis on the broader economy. 
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SEC. 3. DEFINITIONS. 
For purposes of this Act, the following definitions 
shall apply: 
(1) CORPORATION.—The term ‘‘Corporation’’ 
means the Family Foreclosure Rescue Corporation 
established under section 4. 
(2) BOARD.—The term ‘‘Board’’ means the 
Board of Directors of the Corporation. 
(3) HOME MORTGAGE.—The term ‘‘home mort-
gage’’ means a first mortgage on real estate— 
(A)(i) in fee simple, upon which there is lo-
cated a dwelling for not more than four fami-
lies; 
(ii) on a leasehold under a renewable lease 
for not less than 99 years, upon which there is 
located a dwelling for not more than four fami-
lies; or 
(iii) that is a single unit in a condominium; 
and 
(B) has a value not exceeding the lower 
of— 
(i) 125 percent of the local area me-
dian home price; or 
(ii) 175 percent of the dollar amount 
limitation for a single-family residence 
then in effect under section 305(a)(2) of 
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the Federal Home Loan Mortgage Cor-
poration Act (12 U.S.C. 1454(a)(2)) . 
(4) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Treasury. 
SEC. 4. ESTABLISHMENT. 
The Secretary of the Treasury shall establish a cor-
poration to be known as the Family Foreclosure Rescue 
Corporation, which shall be an instrumentality of the 
United States, and which shall have authority to sue and 
to be sued in any court of competent jurisdiction, Federal 
or State. 
SEC. 5. BOARD. 
(a) IN GENERAL.—The Corporation shall be under 
the direction of a Board of Directors and shall be operated 
by the Board under such bylaws, rules, and regulations 
as the Board may prescribe for the accomplishment of the 
purposes and intent of this Act. 
(b) MEMBERS.—The Board shall consist of seven 
members, as follows: 
(1) Two of the members shall be appointed by 
the President. 
(2) Four of the members shall be appointed by 
President from among a list of 10 nominees selected 
jointly by the Speaker of the House of Representa-
tives and the majority leader of the Senate. 
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(3) The Secretary shall serve as an ex officio 
member of the Board. 
SEC. 6. CAPITAL STOCK. 
(a) IN GENERAL.—The Corporation shall have cap-
ital stock subscribed to by the Secretary on behalf of the 
United States Government in such amount as the Sec-
retary may determine to be appropriate, to the extent pro-
vided in advance in an appropriation Act for any fiscal 
year, but not to exceed in the aggregate $200,000,000. 
(b) CERTIFICATES.—Certificates evidencing shares of 
nonvoting capital stock of the Corporation shall be issued 
by the Corporation to the Secretary, to the extent of pay-
ments made for the capital stock of the Corporation. 
(c) PUBLIC DEBT TRANSACTION.—For the purpose 
of purchasing shares of capital stock of the Corporation, 
the Secretary may use as a public-debt transaction the 
proceeds of any securities issued under chapter 31 of title 
31, United States Code. 
SEC. 7. BORROWING. 
(a) ISSUANCE.—The Corporation may issue bonds in 
an aggregate amount not to exceed $150,000,000,000, 
which may be sold by the Corporation to obtain funds for 
carrying out the purposes of this Act, or exchanged as 
hereinafter provided. Such bonds shall be issued in such 
denominations as the Board shall prescribe, shall mature 
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within a period of not more than 30 years from the date 
of their issue, shall bear interest at a rate not to exceed 
5 percent annually, and shall be fully and unconditionally 
guaranteed as to principal and interest by the United 
States, and such guaranty shall be expressed on the face 
thereof. 
(b) PAYMENT.—The Corporation shall make bond 
payments of accrued interest plus principal in the amount 
sufficient to return the principal within a period not to 
exceed 30 years, and such payments may be made month-
ly, quarterly, semi-annually, or annually, in the discretion 
of the Corporation. Outstanding principal and accrued in-
terest shall be paid to the bond holder in the event that 
the mortgage issued in exchange for that bond is paid off 
or title to the underlying property is transfered by sale 
or foreclosured. 
(c) TREASURY BORROWING.—In the event that the 
Corporation is unable to pay upon demand, when due, the 
interest on any such bonds, the Secretary shall pay to the 
Corporation the amount of such interest, which is hereby 
authorized to be appropriated to the Corporation, and the 
Corporation shall pay the amount of such interest to the 
holders of the bonds. Upon the payment of such interest 
by the Secretary, the amount so paid shall become an obli-
gation of the Corporation to the United States and shall 
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bear interest at the same rate as that borne by the bonds 
upon which the interest has been so paid. 
(d) TREATMENT.—The bonds issued by the Corpora-
tion under this section shall be exempt, both as to prin-
cipal and interest, from all taxation (except surtaxes, es-
tate, inheritance, and gift taxes) now or hereafter imposed 
by the United States or any District, Territory, depend-
ency, or possession thereof, or by any State, county, mu-
nicipality, or local taxing authority. 
SEC. 8. TREATMENT OF CORPORATION. 
The Corporation, including its franchise, its capital, 
reserves, and surplus, and its loans and income, shall be 
exempt from taxation referred to in section 7(c), except 
that any real property of the Corporation shall be subject 
to taxation to the same extent, according to its value, as 
other real property is taxed. 
SEC. 9. EMERGENCY MORTGAGE RELIEF. 
(a) ACQUISITION OF MORTGAGES.—The Corporation 
may, during the three-year period that begins upon the 
date of the enactment of this Act— 
(1) acquire in exchange for bonds issued by the 
Corporation, home mortgages and other obligations 
and liens secured by real estate (including the inter-
est of a vendor under a purchase-money mortgage or 
contract) recorded or filed in the proper office or ex-
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ecuted prior to the date of the enactment of this 
Act, which are currently in default or at foreseeable 
risk of default, except that— 
(A) in the event that the home mortgage 
was placed in a trust or other qualified special 
purpose vehicle for the purposes of securitiza-
tion, acceptance of Corporation bonds by a duly 
appointed servicer as payment in full for the 
purchase of the home mortgage shall be con-
strued as a non-foreclosure alternative to the 
termination of a loan, equivalent to a short sale 
or short payoff; 
(B) the face value of the bonds so ex-
changed and the cash so advanced shall not ex-
ceed, in any case, the principal balance plus ac-
crued interest on that balance (exclusive of ad-
ditional fees incurred as part of lender workouts 
and similar actions), as of the time of acquisi-
tion by the Corporation, as determined by an 
appraisal made by the Corporation; and 
(C) in any case in which the amount of the 
face value of the bonds exchanged plus accrued 
interest thereon and the cash advanced is less 
than the amount the homeowner owes with re-
spect to the home mortgage or other obligation 
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or lien so acquired by the Corporation, the Cor-
poration shall credit the difference between 
such amounts to the homeowner and shall re-
duce the amount owed by the homeowner to the 
Corporation, to that extent; and 
(2) in connection with any such exchange, make 
advances in cash to pay the taxes and assessments 
on the real estate, to meet the incidental expenses of 
the transaction, and to pay such amounts, not ex-
ceeding $750, to the holder of the mortgage, obliga-
tion, or lien acquired as may be the difference be-
tween the face value of the bonds exchanged and the 
purchase price of the mortgage, obligation, or lien; 
(b) AMORTIZATION.—Each home mortgage or other 
obligation or lien so acquired shall be carried as a first 
lien or refinanced as a home mortgage by the Corporation 
on the basis of the price paid for the mortgage, obligation, 
or lien by the Corporation, and shall be amortized by 
means of monthly payments sufficient to retire the inter-
est and principal within a period of not to exceed 30 years; 
but the amortization payments of any homeowner may be 
made quarterly, semiannually, or annually, if in the judg-
ment of the Corporation the situation of the homeowner 
requires it. 
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(c) MAXIMUM INTEREST RATE.—Interest on the un-
paid balance of the obligation of the homeowner to the 
Corporation shall be at a rate not exceeding 7.5 percent 
annually. 
(d) EXTENSIONS.—The Corporation may at any time 
grant an extension of time to any homeowner for the pay-
ment of any installment of principal or interest owed by 
the homeowner to the Corporation if, in the judgment of 
the Corporation, the circumstances of the homeowner and 
the condition of the security justify such extension. 
(e) REDEMPTION AND RECOVERY OF FORECLOSED 
PROPERTIES.—The Corporation may, during the three- 
year period described in subsection (a), exchange bonds 
and advance cash subject to the limitations provided in 
subsection (a), to redeem or recover homes lost by the 
owners by foreclosure or forced sale by a trustee under 
a deed of trust or under power of attorney, or by voluntary 
surrender to the mortgagee within two years prior to such 
exchange or advance. 
(f) REAL ESTATE.—As used in this section, the term 
‘‘real estate’’ includes only real estate described in section 
3(3). 
SEC. 10. NONDISCRIMINATION. 
(a) LOCATION OF REAL ESTATE.—No discrimination 
shall be made under this Act against any home mortgage 
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by reason of the fact that the real estate securing such 
mortgage is located in a municipality, county, or taxing 
district which is in default upon any of its obligations. 
(b) CHARACTERISTICS OF APPLICANTS.—The Cor-
poration is prohibited from discriminating in its lending 
behavior based on the race, color, religion, sex, national 
origin, age, disability, or familial status of the applicant 
or applicants. 
SEC. 11. DENIAL OF APPLICATIONS. 
(a) AUTHORITY TO DENY.—The Corporation may 
deny a home mortgage application on the grounds of an 
applicant’s inability to pay or excess indebtedness, as de-
termined by credit score, household income and assets, or 
other criteria, to be determined by the Board or its des-
ignees. 
(b) COUNSELING.—The Corporation shall provide ap-
plicants who are denied a home mortgage issued by the 
Corporation information sufficient to identify and contact 
a housing counseling provider serving the local area in 
which the applicant resides who has been certified pursu-
ant to section 106(f) of the Housing and Urban Develop-
ment Act of 1968 (12 U.S.C. 1701x(f)). 
SEC. 12. DISPOSITION OF REAL ESTATE. 
In the event the Corporation takes possession of real 
estate through foreclosure, voluntary transfer of title, or 
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otherwise, the Corporation shall dispose of the real estate 
in a manner that minimizes adverse impacts on neigh-
boring property values by staggering sales so as not to 
create an excess supply of properties for sale or by offering 
properties for rent until disposition is possible. The Cor-
poration may make necessary repairs to Corporation- 
owned property to maintain the value of the property and 
to prepare it for disposition. 
SEC. 13. APPRAISALS. 
The Board shall make rules for the appraisal of the 
property on which loans are made under this Act, to ac-
complish the purposes of this Act. 
SEC. 14. OTHER PROVISIONS. 
(a) OFFICERS AND EMPLOYEES.—The Corporation 
shall have power to select, employ, and fix the compensa-
tion of such officers, employees, attorneys, or agents as 
shall be necessary for the performance of its duties under 
this Act, without regard to the provisions of other laws 
applicable to the employment or compensation of officers, 
employees, attorneys, or agents of the United States. No 
such officer, employee, attorney, or agent shall be paid 
compensation at a rate in excess of the rate provided for 
the members of the Board. 
(b) USE OF MAILS.—The Corporation may use the 
United States mails in the same manner and under the 
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same conditions as other departments and agencies of the 
United States. 
(c) SALARIES
AND EXPENSES.—The Corporation 
shall pay such proportion of the salary and expenses of 
the members of the Board and of its officers and employ-
ees as the Board may determine to be equitable, and may 
use the facilities of Federal Home Loan Banks, upon mak-
ing reasonable compensation for such use, as determined 
by the Board. 
(d) BYLAWS, RULES, AND
REGULATIONS.—The 
Board may make such bylaws, rules and regulations, not 
inconsistent with the provisions of this Act, as may be nec-
essary for the proper conduct of the affairs of the Corpora-
tion. 
(e) RETIREMENT OF STOCK.—The Corporation shall 
retire and cancel the bonds and stock of the Corporation 
as rapidly as the resources of the Corporation will permit. 
Upon the retirement of such stock, the reasonable value 
thereof as determined by the Board shall be paid into the 
Treasury of the United States and the receipts issued 
therefor shall be canceled. 
SEC. 15. LIQUIDATION. 
The Board shall proceed to liquidate the Corporation 
when its purposes have been accomplished, and shall pay 
any surplus or accumulated funds into the Treasury of 
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the United States. The Corporation may declare and pay 
such dividends to the United States as may be earned and 
as in the judgment of the Board it is proper for the Cor-
poration to pay. 
Æ 
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