March 5, 2008 (LPAC)--A Homeowner and Bank Protection Act resolution has now been introduced to the Alabama state legislature.

A PDF of the resolution can be found, here.

URGING CONGRESS TO ENACT THE HOMEOWNERS AND BANK
PROTECTION ACT OF 2007.

WHEREAS, the onrushing financial crisis engulfing home mortgages, debt instruments of all types, and the banking system of the United States threatens to set off an economic depression worse than the 1930s; and

WHEREAS, millions of American citizens are threatened with foreclosure and loss of their homes over the upcoming months, according to studies released by RealtyTrac and Moody's Economy.com; and

WHEREAS, this financial crisis is now threatening the integrity of both state and federally chartered banks, as typified by the run on deposits of certain lending institutions during August 2007; a banking collapse could wipe out the life savings of American citizens 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 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"; now therefore,

BE IT RESOLVED BY THE LEGISLATURE OF ALABAMA, BOTH
HOUSES THEREOF CONCURRING, That we urge Congress to take
emergency action to protect homeowners and banks by enacting a
Homeowners and Banks Protection Act specifically to:

Establish a federal agency to place federal and state chartered banks under protection, 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 that have brought the banking system to the point of bankruptcy.

Declare a moratorium on all home foreclosures for the duration of the transitional period, allowing families to retain their homes. Monthly payments, the equivalent of "rental payments," shall be made to designated banks, which can use the funds as collateral for normal lending practices, thus recapitalizing the banking system. These affordable monthly payments will be factored into new mortgages, reflecting the orderly deflating of the housing bubble, the establishment of appropriate property valuations and reduced fixed mortgage interest rates. While this may take several years to achieve, in the interim period no homeowner shall be evicted from his or her property, and the federal and state chartered banks shall be protected so that they can resume their traditional functions, serving local communities and facilitating credit for investment in productive entities.

Authorize governors of several states to assume the administrative responsibilities for implementing the program, including the "rental" assessment to designated banks, with the federal government providing the necessary credits and guarantees to assure the successful transition.

BE IT FURTHER RESOLVED, That a copy of this resolution shall be forwarded to each member of the Alabama Congressional Delegation and to the President of the United States for their immediate consideration and implementation.