Bill Would Create Emergency Federal Refinancing Program

Washington, DC –  Today, Congressman Joe Baca (D-Rialto) held an event with the Center for American Progress to discuss his legislation, H.R. 4135, the Family Foreclosure Rescue Corporation Act.  H.R. 4135 creates a new entity within the federal government, the Family Foreclosure Rescue Corporation (FFRC), that will be responsible for financing loans to people currently in foreclosure or in serious default.

“With one out of every 43 households in San Bernardino and Riverside counties currently experiencing foreclosure, the current mortgage crisis has already hurt too many Inland families and children,” said Rep. Baca.  “My legislation can reverse this trend, and keep families in homes by providing immediate assistance to those who are already suffering through foreclosures.”

H.R. 4135 reintroduces a concept instituted by President Franklin Roosevelt during the Great Depression.  President Roosevelt established the Home Owner’s Loan Corporation to provide emergency refinance assistance to families who could no longer make their mortgage payments.  Now, in the midst of a new financial crisis, when many mortgage payments have ballooned past affordable levels, the FFRC will function under the same principles and allow families to refinance their mortgage through a government administered loan with a set interest rate.  

“Too many American families have fallen victim to the predatory lending practices that dominated much of the home mortgage market the past few years,” commented Rep. Baca.  “It’s time for the government to lend a helping hand – to stop our families from becoming homeless and to keep our children’s futures safe and financially secure.  By giving borrowers an alternative to unaffordable balloon payments, this bill will keep more families in their homes.”   

In addition, H.R. 4135 also establishes that:  

•    The FFRC will serve as a temporary entity that only accepts loan applications for three years.        After the initial three years, the FFRC will function only to finish the administration of loans in            the program;  
•    The FFRC will be run under the direction of a seven member board composed of appointees from       the President, the Speaker of the House, and the Majority Leader of the Senate; and,
•    In order to cover costs involved with the FFRC, the government will sell treasury bonds.  

“Throughout our nation’s proud history, America has always cared for her own in times of hardship,” concluded Rep. Baca. “This new financial crisis should be no different.  By providing mortgage assistance, the Family Foreclosure Rescue Corporation can prevent homelessness and bring economic stability back to our communities and neighborhoods.”