Farm Credit Act Amendments of 1987

Farm Credit Act Amendments of 1987 - Title I: Borrower Assistance - Amends the Farm Credit Act of 1971 to direct Federal land bank associations and production credit associations, during the five-year period beginning upon this Act's enactment, to retire at par value: (1) borrower stock that was frozen, impaired, or retired at less than par value after 1982 in connection with the liquidation of an association; and (2) stock retired by an association at less than par value between January 1, 1987, and enactment of this provision. Implements this retirement of borrower stock by directing the association to issue to the member-borrower a note payable in an amount equal to the stock's par value. Sets forth the terms applicable to these notes, including provisions for their redemption by the Farm Credit Administration (FCA) if an association is unable to pay the holder.

Authorizes the Secretary of Agriculture to issue to a Farm Credit System (FCS) institution generic commodity certificates to offset any loss the institution suffers as a result of interest rate reductions applied to borrower loans. Limits to $2,000,000,000 the total value of such certificates that may be issued. Prohibits their issuance from offsetting interest rate reductions that: (1) extend for more than five years; or (2) yield an effective annual interest rate below eight percent.

Directs each FCS bank, within 30 days, to establish for each FCS association a special credit unit authorized to review, evaluate, restructure, defer, and otherwise arrange for the final disposition of all nonaccrual and high-risk loans held by the association. Requires the unit, within 45 days of its establishment, to prepare a plan for the review and adjustment or for the disposition of such loans in the interest of assisting farmer-borrowers. Mandates that emphasis be placed on loan restructuring and deferral when the cost of these alternatives is equal to or less than that of foreclosure. Sets forth criteria to be met by an association's plan, including requirements for prompt case-by-case review of loans and for a system to monitor the effectiveness of restructured loans.

Requires each bank to establish an appeals board to review an association's liquidation and foreclosure decisions.

Directs the FCA to submit quarterly reports to each bank disclosing specified information about loans subject to forbearance, restructuring, and liquidation. Requires a bank, upon receiving the report, to determine the extent to which each association is actively pursuing policies favoring alternatives other than liquidation.

Permits a borrower whose loan application is rejected by an FCS institution to apply at the FCS institution nearest the one that rejected the loan.

Title II: Agricultural Mortgage Secondary Market - Amends the Farm Credit Act of 1971 to establish the Federal Agricultural Mortgage Corporation as a federally-chartered institution of the Farm Credit System. States that the Corporation shall not be liable for the debts of any other FCS institution.

Directs the Corporation to provide a secondary agricultural mortgage market by: (1) developing uniform underwriting, security appraisal, and repayment standards; (2) determining the eligibility of agricultural mortgage marketing facilities to contract with the Corporation for credit enhancement of specific mortgage pools; and (3) providing credit enhancement to assure the repayment of principal and interest on pools of qualified agricultural mortgage loans.

Sets forth provisions relating to: (1) both an interim and a permanent Board of Directors; (2) common stock; (3) corporate powers and Board duties; (4) agricultural mortgage marketing facility certification (including revocation); (5) credit enhancement of qualified loans; (6) a mandatory ten-percent contribution reserve for loan pools, including provisions both for distributions of any earnings on the reserve and for loss allocation; (7) standards for qualified loans; (8) credit enhancement and its funding; (9) the role of the FCA with respect to the Corporation; (10) exemption from Federal and State securities laws of securities representing an interest in a pool of qualified loans for which credit enhancement has been provided; (11) the granting of original jurisdiction to district courts (without regard to amount in controversy) for civil actions to which the Corporation is a party; and (12) a contractual preemption with respect to remedies upon default or terms of repayment applicable to certain loans secured by agricultural property.