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January 11, 2008 (LPAC)--The following bill has now been introduced into the Maryland state legislature with 2 co-sponsors.

A PDF version can be found here.

A House Joint Resolution concerning Federal Legislation to Protect Homeowners and Banks

FOR the purpose of urging the United States Congress to enact legislation that establishes a federal agency authorized to take certain actions with respect to existing mortgages and speculative debt obligations, declares a moratorium on home foreclosures, and authorizes the governors of the several states to assume the administrative responsibilities of implementing the program created by the legislation.

WHEREAS, The ongoing 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; and

WHEREAS, Hedge funds spread this financial collapse among markets worldwide by dominating speculation in the worldwide markets, and many of those hedge funds are now going bankrupt and demanding government bailout; and

WHEREAS, This financial crisis threatens the integrity of both state and federally chartered banks, as typified by the run on deposits of Countrywide Financial Corporation in California in August, 2007; and

WHEREAS, This financial crisis could wipe out the life savings of many Americans and drastically undermine the economic stability of our states and cities; and

WHEREAS, Millions of Americans could face foreclosure and the loss of their homes over the coming months; and

WHEREAS, According to the Maryland Department of Labor, Licensing, and Regulation, foreclosures in the State, from the second quarter of 2006 to the third quarter of 2007, increased by 639%; and

WHEREAS, Under similar circumstances in the 1930s, President Franklin D. Roosevelt successfully intervened to protect banks and homeowners, addressing the United States Congress with a "declaration of national policy" on April 13, 1933, which stated "that the broad 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 liquidation in a time of general distress is a proper concern of the Government"; and

WHEREAS, Federal legislation is needed to protect homeowners and banks from an impending financial crisis by freezing and restructuring existing mortgages and authorizing the write–off of 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; and

WHEREAS, Federal legislation is needed to impose a moratorium on foreclosures during a transitional period, during which families will be able to retain their homes; and

WHEREAS, Federal legislation is needed to recapitalize the banking system by requiring borrowers to make affordable monthly payments, the equivalent of "rental payments", to designated banks which can use the funds as capital for normal lending practices; and

WHEREAS, The affordable monthly "rental payments" need to be factored into new mortgages, facilitating the orderly deflating of the housing bubble, the establishment of appropriate property valuations, and the reduction of fixed mortgage interest rates; and

WHEREAS, Although the stabilization of the housing and mortgage markets may take several years, in the interim no homeowner will be evicted from the homeowner's property, and federal and state chartered banks will be protected and can resume their traditional functions; now, therefore, be it

RESOLVED BY THE GENERAL ASSEMBLY OF MARYLAND, That the General Assembly urges the United States Congress to enact legislation that: establishes a federal agency that will protect federal and state chartered banks by freezing all existing home mortgages for a 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; declares a moratorium on all home foreclosures for the duration of a certain transitional period, during which borrowers would make monthly payments in an amount equivalent to "rental payments" to designated banks; and authorizes the governors of the several states to assume the administrative responsibilities of implementing the program created by the legislation, with the federal government providing the necessary credits and guarantees to assure the successful transition; and be it further

RESOLVED, That a copy of this Resolution be forwarded by the Department of Legislative Services to President George W. Bush, The White House, Washington, D.C. 20500; and to the Maryland Congressional Delegation: Senators Barbara A. Mikulski and Benjamin L. Cardin, Senate Office Building, Washington, D.C. 20510; and Representatives Wayne T. Gilchrest, C. A. Dutch Ruppersberger III, John P. Sarbanes, Albert R. Wynn, Steny Hamilton Hoyer, Roscoe G. Bartlett, Elijah E. Cummings, and Christopher Van Hollen, Jr., House Office Building, Washington, D.C. 20515.