PRINTER'S NO. 2536

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE RESOLUTION

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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