Families in foreclosure would be able to get financial loan assistance under a bill that was reintroduced in the House of Representatives on Thursday.
Rep. Joe Baca, San Bernardino County’s lone Democratic U.S. representative, reintroduced the Family Foreclosure Rescue Corporation Act. The FFRC Act would bring back a Depression-era concept that would give emergency refinance assistance to families who can no longer afford their mortgage payments. Baca first introduced the bill in the 110th Congress and then introduced it a second time in the previous 111th Congress.
“With the number of home foreclosures still far too high, families in the Inland Empire and across the nation need help,” Baca said. “I am proud to reintroduce the Family Foreclosure Rescue Corporation Act, which I believe can be a part of the solution. My legislation can reverse the trend in foreclosures and keep families in homes by providing immediate assistance to those who are in serious default of a mortgage loan.”
According to RealtyTrac.com, the leading online marketplace of foreclosure properties, there are roughly 1.5 million foreclosed homes in the country as of August 2011. California leads the nation in foreclosures with 273,216 and 59,383 of those received a foreclosure filing for the month of August – the state with the second highest number of foreclosure filings in August was Florida with 23,569. San Bernardino County had 4,518 foreclosures in August, with 22,269 all together.
President Franklin D. Roosevelt first instituted the FFRC Act during the Great Depression and established the Home Owner’s Loan Corporation to provide emergency financial assistance to families who could not keep up with their mortgage payments. Baca’s legislation would allow the FFRC to work like it did during the Great Depression and let families refinance their mortgages 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 in the past decade,” Baca said. “We must do everything in our power to keep our children’s futures safe and financially secure. My bill gives borrowers an alternative to unaffordable balloon payments, keeping more families in their homes.”
More specifically, the FFRC Act would be a temporary entity that only accepts loan applications for three years. After the initial three years, the FFRC would only be allowed to finish the administration of loans in the program. A seven member board made up of appointees from the president, the Speaker of the House and the majority leader of the Senate would run the board. Finally, to cover the costs the FFRC would have, the government would sell treasury bonds.
“Throughout our nation’s history, America has always cared for her own in times of hardship,” Baca said. “The 21st Century should be no different. By providing mortgage assistance, the Family Foreclosure Rescue Corporation can bring economic stability back to our communities and neighborhoods and prevent more families from becoming homeless.”
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