To establish the Family Foreclosure Rescue Corporation to provide emergency relief to refinance home mortgages of homeowners in foreclosure or default.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Family Foreclosure Rescue 
Corporation Act''.

SEC. 2. PURPOSES.

    The purposes of this Act are to provide emergency relief with 
respect to home mortgage indebtedness through the establishment of a 
corporation to directly refinance home mortgages to homeowners 
currently in foreclosure, serious default, or with a reasonable 
expectation of imminent, sustained default and--
            (1) to extend relief to the owners of homes occupied 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 foreclosures 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 efficient 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.

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 mortgage'' means a 
        first mortgage on real estate--
                    (A)(i) in fee simple, upon which there is located a 
                dwelling for not more than four families;
                    (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 families; 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 median 
                        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 the 
                        Federal Home Loan Mortgage Corporation 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 corporation 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 Representatives and the majority leader 
        of the Senate.
            (3) The Secretary shall serve as an ex officio member of 
        the Board.

SEC. 6. CAPITAL STOCK.

    (a) In General.--The Corporation shall have capital stock 
subscribed to by the Secretary on behalf of the United States 
Government in such amount as the Secretary may determine to be 
appropriate, to the extent provided 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 payments 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 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 monthly, quarterly, semi-annually, or annually, in the 
discretion of the Corporation. Outstanding principal and accrued 
interest 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 obligation of the Corporation to the 
United States and shall 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 Corporation under this 
section shall be exempt, both as to principal and interest, from all 
taxation (except surtaxes, estate, inheritance, and gift taxes) now or 
hereafter imposed by the United States or any District, Territory, 
dependency, or possession thereof, or by any State, county, 
municipality, 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 interest of a vendor 
        under a purchase-money mortgage or contract) recorded or filed 
        in the proper office or executed 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 securitization, acceptance of 
                Corporation bonds by a duly appointed servicer as 
                payment in full for the purchase of the home mortgage 
                shall be construed 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 exchanged and 
                the cash so advanced shall not exceed, in any case, the 
                principal balance plus accrued interest on that balance 
                (exclusive of additional fees incurred as part of 
                lender workouts and similar actions), as of the time of 
                acquisition 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 respect to the home mortgage or 
                other obligation or lien so acquired by the 
                Corporation, the Corporation shall credit the 
                difference between such amounts to the homeowner and 
                shall reduce 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 exceeding $750, to the holder of the 
        mortgage, obligation, or lien acquired as may be the difference 
        between 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 
interest 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 judgment of the Corporation the 
situation of the homeowner requires it.
    (c) Maximum Interest Rate.--Interest on the unpaid 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 payment 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 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 Corporation 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 determined by credit score, household income and 
assets, or other criteria, to be determined by the Board or its 
designees.
    (b) Counseling.--The Corporation shall provide applicants 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 pursuant to 
section 106(f) of the Housing and Urban Development 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 otherwise, the 
Corporation shall dispose of the real estate in a manner that minimizes 
adverse impacts on neighboring 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 Corporation 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 accomplish the purposes of this 
Act.

SEC. 14. OTHER PROVISIONS.

    (a) Officers and Employees.--The Corporation shall have power to 
select, employ, and fix the compensation 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 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 employees as the Board may determine to be 
equitable, and may use the facilities of Federal Home Loan Banks, upon 
making 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 necessary for the proper conduct of the affairs of 
the Corporation.
    (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 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 
Corporation to pay.

Summary: Family Foreclosure Rescue Corporation Act - Instructs the Secretary of the Treasury to establish the Family Foreclosure Rescue Corporation to acquire, via the sale of bonds, home mortgages and other obligations and liens secured by real estate which are currently in default or at foreseeable risk of default.