HR0761 LRB095 13961 AJO 39773 r
1		HOUSE RESOLUTION
2		WHEREAS, The onrushing financial crisis involving home
3		mortgages, debt instruments of all types, and the banking
4		system of the United States threatens to set off an economic
5		collapse worse than the Great Depression of the 1930s; and
6		WHEREAS, Millions of Americans are faced with foreclosure
7		and loss of their homes over the coming months; and
8		WHEREAS, The hedge funds which spread this financial
9		collapse among markets worldwide, by dominating speculation in
10		all those markets, are now going bankrupt and demanding
11		government bailout of their securities and derivatives, and the
12		nominal value of the derivatives based on mortgages alone is
13		the size of the combined GDP of the nations of the world; and
14		WHEREAS, This financial crisis threatens the integrity of
15		both Federal and State chartered banks, as typified by the run
16		on deposits of Countrywide Financial Corporation in California
17		on August 16, which could wipe out the life savings of too many
18		American people and drastically undermine the economic
19		stability of our states and cities; and
20		WHEREAS, Under similar circumstances in the 1930s,
21		President Franklin D. Roosevelt successfully intervened to

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1		protect banks and homeowners, addressing Congress with a
2		"declaration of national policy" on April 13, 1933, which
3		stated "that the broad interests of the Nation require that
4		special safeguards should be thrown around home ownership as a
5		guarantee of social and economic stability, and that to protect
6		homeowners from inequitable enforced liquidation in a time of
7		general distress is a proper concern of the Government";
8		therefore, be it
9		RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE
10		NINETY-FIFTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that we
11		call upon Congress to take emergency action to protect
12		homeowners and banks by enacting a Homeowners and Banks
13		Protection Act specifically to:
14		(1) Establish a Federal agency to place Federal and
15		State chartered banks under protection, freezing all
16		existing home mortgages for a period of time, adjusting
17		mortgage values to fair prices, restructuring existing
18		mortgages at appropriate interest rates and writing off
19		speculative debt obligations of mortgage-backed
20		securities, financial derivatives and other forms of
21		financial pyramid schemes that have brought the banking
22		system to the point of bankruptcy;
23		(2) Declare a moratorium on all home foreclosures for
24		the duration of the transitional period, allowing families
25		to 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
3		practices, thus recapitalizing the banking system. These
4		affordable monthly payments will be factored into new
5		mortgages, reflecting the orderly deflating of the housing
6		bubble, the establishment of appropriate property
7		valuations and reduced fixed mortgage interest rates.
8		While this may take several years to achieve, in the
9		interim period no homeowner shall be evicted from his or
10		her property, and the Federal and State chartered banks
11		shall be protected so that they can resume their
12		traditional functions, serving local communities and
13		facilitating credit for investment in productive entities;
14		and
15		(3) Authorize Governors of several states to assume the
16		administrative responsibilities for implementing the
17		program, including the "rental" assessments to designated
18		banks, with the Federal government providing the necessary
19		credits and guarantees to assure the successful
20		transition; and be it further
21		RESOLVED, That suitable copies of this resolution be
22		delivered to the President of the United States and to each
23		member of the Illinois congressional delegation for immediate
24		action.