PRESS RELEASE
Georgia, Vermont Legislators Introduce Homeowners and Bank Protection Act
Feb. 6, 2008 (EIRNS)—This release was issued on today by the Lyndon LaRouche Political Action Committee (LPAC).
House Resolution 1153, calling on Congress to enact the LaRouche-authored Homeowners and Bank Protection Act, was introduced into the George House of Representatives on Feb. 5. The resolution has six cosponsors, and has been referred to the Committee on Banks and Banking.
The resolution reads: - A Resolution - Urging the Congress the United States to enact a "Homeowners and Bank Protection Act" for the protection of homeowners and banking institutions; and for other purposes.
WHEREAS, the growing financial crisis involving home mortgages, debt instruments of all types, and the banking system of the United States threatens to set off an economic collapse with a potentially worse economic impact than was experienced in America during the Great Depression of the 1930s; and
WHEREAS, millions of Americans are currently faced with impending foreclosures and the loss of their homes; and
WHEREAS, hedge funds, which spread this financial collapse among markets world-wide, are now going bankrupt and demanding government bailout of their securities and derivatives, and the nominal value of the derivatives based on mortgages alone is the size of the combined GDP of the nations of the world; and
WHEREAS, under similar circumstances in the 1930s, President Franklin D. Roosevelt successfully intervened to protect banks and homeowners, addressing Congress with a "declaration of national policy, which stated, "the interests of the Nation require that special safeguards should be thrown around home ownership as a guarantee of social and economic stability, and that to protect homeowners from inequitable enforced liquidiation in a time of general distress is a proper concern of the government."
NOW, THEREFORE, BE IT RESOLVED BY THE HOUSE OR REPRESENTATIVES that this body hereby urges the members of the United States Congress to take emergency action to protect homeowners and banks and to enact a "Homeowners and Bank Protection Act," which legislation shall:
(1) Establish a fedeal agency for the protection of federal and state chartered banks;
(2) Include specific mortgage protections for a limited time, allowing the economy to regain stability during this transitional period, including freezing all existing home mortgages for a limited period of time, adjusting mortgage values to fair prices, restructuring existing mortgages at appropriate interest rates, and writing off speculative debt obligations of mortgage-backed securities, financial derivatives, and other forms of financial pyramid schemes that have brought the banking system to the point of bankruptcy;
(3) Declare a moratorium on all home foreclosures for the duration of the transitional period, allowing families to retain their homes an to establish monthly payments which shall be the equivalent of rental payments, to be made by such homeowners to designated banks, and allow these funds to be used by such banks as collateral for normal lending practices, thus recapitalizing the banking system; and
(4) Authorized states to assume the administrative responsibilities for implementing the program created by Congress while the federal government shall continue providing any necessary credits or guarantees needed to assure a successful economic transition.
BE IT FURTHER RESOLVED that the Clerk of the House of Representatives is authorized and directed to transmit an appropriate copy of this resolution to the President of the United States and to each member of the Georgia congressional delegation.
Vermont House Introduces Homeowners and Bank Protection Act
Joint House Resolution 49, calling on Congress to adopt an emergency bank and homeowner protection act, has been introduced into the Vermont House of Representatives. It was offered by Representatives Obuchowski of Rockingham and Head of So. Burlington. The resolution reads:
Joint House Resolution
Whereas, the continuing financial crisis involving home mortgages, debt instruments of all types, and the banking system of the United States threatens to set off an economic collapse worse than the Great Depression of the 1930s,
Whereas, millions of Americans are faced with foreclosures and loss of their homes over the coming months, and
Whereas, hedge funds dominating speculating in financial markets worldwide precipitated this collapse, and those markets are now facing bankruptcy and demanding government bailout of their securities and derivatives, and
Whereas, the nominal value of these mortgage-based derivatives alone equals the total gross domestic product of every nation, and
Whereas, this financial crisis threatens the integrity of both federal and state chartered banks and the run on deposits at Countrywide Financial Corporation in California on August 16, 2007 may only be the first, and
Whereas, similar bank runs at other financial institutions could wipe out the life savings of many Americans and drastically undermine the economic stability of our states and cities, and
Whereas, under similar circumstances in the 1930s, President Franklin D. Roosevelt successfully intervened to protect banks and homeowners, addressing Congress with a "declaration of nation policy" on April 13, 1933, which stated "that the broad interests of the nation required special safeguards should be thrown around home ownership as a guarantee of social and economic stability and that to protect homeowners from inequitable enforced liquidation in a time of general distress is a proper concern of government," now therefore be it
Resolved by the Senate and House of Representatives:
That the General Assembly urges Congress to enact an emergency Homeowners and Bank Protection Act that:
- Establishes a federal agency to: place federal and state chartered banks under federal protection, freeze existing home mortgages for a specified transitional period of time, adjust mortgage values to fair prices, restructure existing mortgages to appropriate interest rates, and write off speculative debt obligations of mortgage-backed securities, financial derivatives, and other forms of financial pyramid schemes that have nearly bankrupted the nation's financial institutions;
- Declares a moratorium on all home foreclosures, allowing families to retain their homes during a specified transitional period;
- Creates a system of monthly and affordable homeowner payments equivalent to rent that are payable to designated banks which can use these funds as collateral for traditional lending practices as a method to recapitalize the banking system;
- Provides that these affordable monthly homeowner payments will be factored into new mortgages in order to: reflect the orderly deflating of the housing bubble, establish appropriate property valuation, and establish reduced fixed mortgage interest rates;
- Provides that during a specific transitional period (which may be of several years' duration), no homeowners shall be evicted from his or her property and that federal- and state-chartered banks shall be protected in order that they can resume their traditional functions, serving local communities and facilitating credit for investment in productive entities; and
- Authorizes state governors to assume the administrative responsibilities for implementing the progrm, including the "rental" payments to designated banks, with the fedral government providing the necessary credits and guarantees to assure the successful transition; and be it further
Resolved: That the secretary of state be directed to send a copy of this resolution to the President and to the Vermont Congressional Delegation.
