Farm Credit Borrower Relief, System Reform and Local Control Act of 1987

Farm Credit Borrower Relief, System Reform and Local Control Act of 1987 - Title I: Interest Rate Reduction - Provides for: (1) a mandatory two-year interest rate reduction of at least seven percent on all Farm Credit System (System) loans; (2) an additional reduction of up to two points, upon a borrower's written request, to be funded by applying up to one-half of each borrower's stock against interest otherwise due; and (3) a five-year guarantee of borrower stock.

Title II: Borrower Relief: Forbearance and Restructuring - Amends the Farm Credit Act of 1971 to require all banks and associations to have a forbearance program providing for loan extensions, deferrals, or late payments to delinquent borrowers who meet specified criteria.

Prohibits foreclosure if a borrower is making efforts to repay a loan, is taking care of the property, and has the capacity to work out of debt. Provides: (1) that a borrower must have at least 30 days' written notice before a foreclosure action is filed against him; and (2) a ten-day right to appeal such action.

Requires System institutions to make efforts to permit a borrower in a foreclosure or voluntary liquidation action to retain ownership or possession of a principal residence and a reasonable amount of adjoining land in order to maintain a family.

Requires System institutions to establish lease-back buy-back programs to avoid displacing farm operators and depressing land values. Includes within such programs provisions regarding: (1) leases with repurchase options; (2) repurchase options; (3) maximum ten-year terms for holding collateral; (4) the use of loan collateral as bond collateral; (5) appeal rights; and (6) program inapplicability to wetland and highly erodible land.

Title III: Borrowers Rights - Amends the Farm Credit Act of 1971 to protect a borrower from: (1) being required to provide additional collateral; (2) being foreclosed for failing to provide such collateral; or (3) being requested to furnish additional financial information unless provided for in the loan agreement, or unless the borrower requests an agreement change.

Provides for borrower access to documents and information.

Grants a borrower the right to sue any System institution in U.S. district court.

Title IV: Sunset of the Capital Corporation and Halt to System Centralization Through Service Organizations - Amends the Farm Credit Act of 1971 to terminate the Farm Credit System Capital Corporation 90 days after enactment of this Act. (Currently, such Corporation expires as of December 31, 1990.)

Prohibits the Farm Credit Administration from chartering any entities except Federal land banks and associations, Federal land bank associations, Federal intermediate credit banks, production credit associations, banks for cooperatives, the Central Bank for Cooperatives, and the Federal Farm Credit Banks Funding Corporation.

Liquidates all service organizations established before the effective date of this Act, except the Federal Farm Credit Banks Funding Corporation, within 90 days of the effective date of this Act.

Title V: Future Stability Through Farm Credit Reserve Fund - Amends the Farm Credit Act of 1971 to direct the Farm Credit Administration to establish a reserve fund within 30 days of the effective date of this Act.

States that such reserve shall be used to: (1) guarantee borrower stock; and (2) protect institution viability.

Funds such reserve initially through a one-time issue of an uncollateralized joint obligation of System banks. Provides for perpetual reserve funding through obligation contributions.

Sets forth operating provisions.

Title VI: Termination of Loss-Sharing That Conflicts With the Reserve Fund - Repeals authority for interbank loss-sharing agreements.

Title VII: Local Control - Amends the Farm Credit Act of 1971 to provide a referendum method for stockholder elections of separate boards of directors for System banks. Terminates a district board if separate boards are established for two or more banks in such district.

Sets forth related operating provisions.

Title VIII: Mandatory Cool-Off Period for Mergers - Amends the Farm Credit Act of 1971 to provide for a mandatory cooling-off period before a merger between System associations becomes effective.

Title IX: Funding Corporation Report - Amends the Farm Credit Act of 1971 to require the Federal Farm Credit Banks Funding Corporation to report annually to each System institution detailings its bond placements, budget, costs, and expenses.