[Congressional Record Volume 143, Number 123 (Tuesday, September 16, 1997)]
[House]
[Pages H7302-H7309]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
HOUSING PROGRAMS EXTENSION ACT OF 1997
Mr. LAZIO of New York. Mr. Speaker, I move to suspend the rules and
pass the Senate bill (S. 562) to amend section 255 of the National
Housing Act to prevent the funding of unnecessary or excessive costs
for obtaining a home equity conversion mortgage, as amended.
The Clerk read as follows:
S. 562
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Housing Programs Extension
Act of 1997''.
TITLE I--SENIOR CITIZEN HOME EQUITY PROTECTION
SECTION 101. SHORT TITLE.
This title may be cited as the ``Senior Citizen Home Equity
Protection Act''.
SEC. 102. DISCLOSURE REQUIREMENTS; PROHIBITION OF FUNDING OF
UNNECESSARY OR EXCESSIVE COSTS.
Section 255(d) of the National Housing Act (12 U.S.C.
1715z-20(d)) is amended--
[[Page H7303]]
(1) in paragraph (2)--
(A) in subparagraph (B), by striking ``and'' at the end;
(B) by redesignating subparagraph (C) as subparagraph (D);
and
(C) by inserting after subparagraph (B) the following:
``(C) has received full disclosure of all costs to the
mortgagor for obtaining the mortgage, including any costs of
estate planning, financial advice, or other related services;
and'';
(2) in paragraph (9)(F), by striking ``and'';
(3) in paragraph (10), by striking the period at the end
and inserting ``; and''; and
(4) by adding at the end the following:
``(11) have been made with such restrictions as the
Secretary determines to be appropriate to ensure that the
mortgagor does not fund any unnecessary or excessive costs
for obtaining the mortgage, including any costs of estate
planning, financial advice, or other related services.''.
SEC. 103. IMPLEMENTATION.
(a) Notice.--The Secretary of Housing and Urban Development
shall, by interim notice, implement the amendments made by
section 102 in an expeditious manner, as determined by the
Secretary. Such notice shall not be effective after the date
of the effectiveness of the final regulations issued under
subsection (b).
(b) Regulations.--The Secretary shall, not later than the
expiration of the 90-day period beginning on the date of the
enactment of this Act, issue final regulations to implement
the amendments made by section 102. Such regulations shall be
issued only after notice and opportunity for public comment
pursuant to the provisions of section 553 of title 5, United
States Code (notwithstanding subsections (a)(2) and (b)(B) of
such section).
TITLE II--TEMPORARY EXTENSION OF PUBLIC HOUSING AND SECTION 8 RENTAL
ASSISTANCE PROVISIONS
SEC. 201. PUBLIC HOUSING CEILING RENTS AND INCOME ADJUSTMENTS
AND PREFERENCES FOR ASSISTED HOUSING.
Section 402(f) of The Balanced Budget Downpayment Act, I
(42 U.S.C. 1437aa note) is amended by striking ``and 1997''
and inserting ``, 1997, and 1998''.
SEC. 202. PUBLIC HOUSING DEMOLITION AND DISPOSITION.
Section 1002(d) of the Emergency Supplemental
Appropriations for Additional Disaster Assistance, for Anti-
terrorism Initiatives, for Assistance in the Recovery from
the Tragedy that Occurred at Oklahoma City, and Rescissions
Act, 1995 (42 U.S.C. 1437c note) is amended by striking
``September 30, 1997'' and inserting ``September 30, 1998''.
SEC. 203. PUBLIC HOUSING FUNDING FLEXIBILITY AND MIXED-
FINANCE DEVELOPMENTS.
Section 201(a)(2) of the Departments of Veterans Affairs
and Housing and Urban Development, and Independent Agencies
Appropriations Act, 1996 (as contained in section 101(e) of
the Omnibus Consolidated Rescissions and Appropriations Act
of 1996 (Public Law 104-134)) (42 U.S.C. 1437l note) is
amended by striking ``fiscal year 1997'' and inserting
``fiscal year 1998''.
SEC. 204. MINIMUM RENTS.
Section 402(a) of The Balanced Budget Downpayment Act, I
(Public Law 104-99; 110 Stat. 40) is amended in the matter
preceding paragraph (1) by striking ``fiscal year 1997'' and
inserting ``fiscal years 1997 and 1998''.
SEC. 205. PROVISIONS RELATING TO SECTION 8 RENTAL ASSISTANCE
PROGRAM.
(a) Take-One-Take-All, Notice Requirements, and Endless
Lease Provisions.--Section 203(d) of the Departments of
Veterans Affairs and Housing and Urban Development, and
Independent Agencies Appropriations Act, 1996 (as contained
in section 101(e) of the Omnibus Consolidated Rescissions and
Appropriations Act of 1996 (Public Law 104-134)) (42 U.S.C.
1437f note) is amended by striking ``and 1997'' and inserting
``, 1997, and 1998''.
(b) Fair Market Rentals.--The first sentence of section
403(a) of The Balanced Budget Downpayment Act, I (Public Law
104-99; 110 Stat. 43) is amended by striking ``fiscal year
1997'' and inserting ``fiscal years 1997 and 1998''.
TITLE III--REAUTHORIZATION OF FEDERALLY ASSISTED MULTIFAMILY RENTAL
HOUSING PROVISIONS
SEC. 301. SECTION 8 PROJECT-BASED ASSISTANCE CONTRACT RENEWAL
AUTHORITY.
Section 211 of the Departments of Veterans Affairs and
Housing and Urban Development, and Independent Agencies
Appropriations Act, 1997 (42 U.S.C. 1437f note) is amended--
(1) in subsection (a)(1), by inserting ``or 1998'' before
the semicolon at the end; and
(2) in subsection (b)(4)(A), by inserting after ``fiscal
year 1997'' each place it appears the following: ``or 1998''.
SEC. 302. MORTGAGE RESTRUCTURING DEMONSTRATION FOR FHA-
INSURED MULTIFAMILY HOUSING.
Section 212 of the Departments of Veterans Affairs and
Housing and Urban Development, and Independent Agencies
Appropriations Act, 1997 (42 U.S.C. 1437f note) is amended--
(1) in subsection (a)(3)(B), by inserting ``or 1998''
before the semicolon at the end;
(2) in subsection (h)(1)(B), by striking ``fiscal year
1997'' and inserting ``fiscal years 1997 and 1998'';
(3) in subsection (h)(1)(F)(ii), by striking ``fiscal year
1997'' and inserting: ``fiscal years 1997 and 1998''; and
(4) in subsection (k), by striking ``50,000 units'' and
inserting ``100,000 units''.
SEC. 303. MULTIFAMILY HOUSING FINANCE PILOT PROGRAMS.
Section 542 of the Housing and Community Development Act of
1992 (12 U.S.C. 1707 note) is amended--
(1) in subsection (b)(5), by inserting before the period at
the end of the first sentence the following: ``, and not more
than an additional 15,000 units during fiscal year 1998'';
and
(2) in the first sentence of subsection (c)(4)--
(A) by striking ``and'' and inserting a comma; and
(B) by inserting before the period at the end the
following: ``, and not more than an additional 15,000 units
during fiscal year 1998''.
SEC. 304. HUD DISPOSITION OF MULTIFAMILY HOUSING.
Section 204 of the Departments of Veterans Affairs and
Housing and Urban Development, and Independent Agencies
Appropriations Act, 1997 (12 U.S.C. 1715z-11a) is amended by
inserting after ``owned by the Secretary'' the following: ``,
including the provision of grants and loans from the General
Insurance Fund for the necessary costs of rehabilitation or
demolition,''.
SEC. 305. MULTIFAMILY MORTGAGE AUCTIONS.
Section 221(g)(4)(C) of the National Housing Act (12 U.S.C.
1715l(g)(4)(C)) is amended--
(1) in the first sentence of clause (viii), by striking
``September 30, 1996'' and inserting ``December 31, 2005'';
and
(2) by adding at the end the following new clauses:
``(ix) Subject to the limitation in clause (x), the costs
of any multifamily auctions under this subparagraph occurring
during any fiscal year shall be paid from amounts in the
General Insurance Fund established under section 519.
``(x) This authority of the Secretary to conduct
multifamily auctions under this subparagraph shall be
effective for any fiscal year only to the extent or in such
amounts that amounts in the General Insurance Fund are or
have been approved in appropriation Acts for costs of such
auctions occurring during such fiscal year.''.
SEC. 306. INTEREST REDUCTION PAYMENTS IN CONNECTION WITH
SALES OF SECTION 236 MORTGAGES HELD BY HUD.
Section 236 of the National Housing Act (12 U.S.C. 1715z-1)
is amended--
(1) in the first sentence of subsection (b), by inserting
before the colon at the end of the first proviso the
following: ``and when the mortgage is assigned or otherwise
transferred to a subsequent holder or purchaser (including
any successors and assignees)''; and
(2) in subsection (c)--
(A) by inserting ``(1)'' after the subsection designation;
and
(B) by adding at the end the following new paragraphs:
``(2)(A) The Secretary may continue to make interest
reduction payments to the holder or purchaser (including any
successors and assignees) of a mortgage formerly held by the
Secretary upon such terms and conditions as the Secretary may
determine. In exercising the authority under the preceding
sentence, upon cancellation of any contract for such interest
reduction payments as a result of foreclosure or transfer of
a deed in lieu of foreclosure, any amounts of budget
authority which would have been available for such contract,
absent cancellation, shall remain available for the project
for the balance of the term of the original mortgage upon
such terms and conditions as the Secretary may determine.
``(B) The Secretary may exercise the authority to make
payments under this paragraph (i) only with respect to
mortgage loans under this section which, at the time of the
Secretary's assignment or other transfer, have a total amount
of unpaid principal obligation of not more than $92,000,000,
and (ii) only to the extent or in such amounts as are or have
been provided in advance in appropriation Acts.
``(3) Notwithstanding subsection (i)(2) or any other
provision of law, in connection with the sale of mortgages
held by the Secretary, the Secretary may establish
appropriate terms and conditions, based on section 42 of the
Internal Revenue Code of 1986 or another appropriate
standard, for determining eligibility for occupancy in the
project and rental charges.''.
SEC. 307. ASSIGNMENT OF REGULATORY AGREEMENTS IN CONNECTION
WITH SALES OF MORTGAGES HELD BY HUD.
Section 203(k) of the Housing and Community Development
Amendments of 1978 (12 U.S.C. 1701z-11(k)) is amended by
adding at the end the following new paragraph:
``(7) Assignment of regulatory agreement in connection with
sale of mortgages.--Notwithstanding any other provision of
law, and upon such terms and conditions as the Secretary may
prescribe, the Secretary may, in connection with the sale of
mortgages held by the Secretary, provide for the assumption
of all rights and responsibilities under the regulatory
agreement executed by or for the benefit of the Secretary.
Such assumption shall further provide for the regulatory
agreement to be so assumed by any successor or assignee of
the initial assuming entity. Such regulatory agreement shall
continue to be binding upon the mortgagor and its successors
and assignees.''.
[[Page H7304]]
TITLE IV--REAUTHORIZATION OF RURAL HOUSING PROGRAMS
SEC. 401. HOUSING IN UNDERSERVED AREAS PROGRAM.
The first sentence of section 509(f)(4)(A) of the Housing
Act of 1949 (42 U.S.C. 1479(f)(4)(A)) is amended by striking
``fiscal year 1997'' and inserting ``fiscal years 1997, 1998,
and 1999''.
SEC. 402. HOUSING AND RELATED FACILITIES FOR ELDERLY PERSONS
AND FAMILIES AND OTHER LOW-INCOME PERSONS AND
FAMILIES.
(a) Authority To Make Loans.--Section 515(b)(4) of the
Housing Act of 1949 (42 U.S.C. 1485(b)(4)) is amended by
striking ``September 30, 1997'' and inserting ``September 30,
1999''.
(b) Set-Aside for Nonprofit Entities.--The first sentence
of section 515(w)(1) of the Housing Act of 1949 (42 U.S.C.
1485(w)(1)) is amended by striking ``fiscal year 1997'' and
inserting ``fiscal years 1997, 1998, and 1999''.
SEC. 403. LOAN GUARANTEES FOR MULTIFAMILY RENTAL HOUSING IN
RURAL AREAS.
Section 538 of the Housing Act of 1949 (42 U.S.C. 1490p-2)
is amended--
(1) in subsection (q), by striking paragraph (2) and
inserting the following:
``(2) Annual limitation on amount of loan guarantee.--In
each fiscal year, the Secretary may enter into commitments to
guarantee loans under this section only to the extent that
the costs of the guarantees entered into in such fiscal year
do not exceed such amount as may be provided in appropriation
Acts for such fiscal year.'';
(2) by striking subsection (t) and inserting the following:
``(t) Authorization of Appropriations.--There are
authorized to be appropriated for each of fiscal years 1998
and 1999 for costs (as such term is defined in section 502 of
the Congressional Budget Act of 1974) of loan guarantees made
under this section such sums as may be necessary for such
fiscal year.''; and
(3) in subsection (u), by striking ``1996'' and inserting
``1999''.
TITLE V--REAUTHORIZATION OF NATIONAL FLOOD INSURANCE PROGRAM
SECTION 501. PROGRAM EXPIRATION.
Section 1319 of the National Flood Insurance Act of 1968
(42 U.S.C. 4026) is amended by striking ``September 30,
1997'' and inserting ``September 30, 1999''.
SEC. 502. BORROWING AUTHORITY.
Section 1309(a)(2) of the National Flood Insurance Act of
1968 (42 U.S.C. 4016(a)(2)) is amended by striking
``September 30, 1997'' and inserting ``September 30, 1999''.
SEC. 503. EMERGENCY IMPLEMENTATION OF PROGRAM.
Section 1336(a) of the National Flood Insurance Act of 1968
(42 U.S.C. 4056(a)) is amended by striking ``September 30,
1996'' and inserting ``September 30, 1999''.
SEC. 504. AUTHORIZATION OF APPROPRIATIONS FOR STUDIES.
Subsection (c) of section 1376 of the National Flood
Insurance Act of 1968 (42 U.S.C. 4127(c)) is amended to read
as follows:
``(c) For studies under this title, there are authorized to
be appropriated such sums as may be necessary for each of
fiscal years 1998 and 1999, which shall remain available
until expended.''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New
York [Mr. Lazio] and the gentleman from Massachusetts [Mr. Kennedy]
each will control 20 minutes.
The Chair recognizes the gentleman from New York [Mr. Lazio].
Mr. LAZIO of New York. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, S. 562, the Housing Programs Extension Act of 1997, will
provide security and peace of mind for senior citizens seeking to
obtain an FHA-insured reverse mortgage. In short, this legislation
gives the Department of Housing and Urban Development authority to
issue regulations protecting senior homeowners from being charged
excessive or unnecessary fees in the reverse mortgage application
process.
I should say here, Mr. Speaker, the Department of Housing and Urban
Development supports not just this provision, but, as I understand it,
the entirety of this bill.
According to a HUD investigation earlier this year, seniors applying
for reverse mortgages were being charged up to 10 percent of the total
loan amount for estate-planning services from third-party service
providers. In some cases this amounted to as much as $10,000 for simply
driving homeowners to the bank and sitting with the applicants during
discussions with the lender.
Mr. Speaker, seniors use these funds for assistance with medical
expenses, critical home repairs, groceries and other everyday living
expenses. Charging senior citizens $10,000 for services that are
essentially free is truly an abomination.
In response to these allegations, I, along with members of the
minority, including the gentleman from Massachusetts [Mr. Kennedy],
introduced H.R. 1297, the Senior Homeowner Reverse Mortgage Protection
Act, earlier this year with the support of the administration. H.R.
1297 was included in the manager's amendment to H.R. 2, which passed
the House with strong bipartisan support last May.
Mr. Speaker, last Congress we extended the FHA-insured reverse
mortgage program until the year 2000. The program has helped make the
American dream of home ownership a continued reality for more than
20,000 seniors who might otherwise be forced to sell their homes
because of the rising costs of living associated with aging.
Reverse mortgages allow seniors who are house rich but cash poor to
tap into the equity in their homes for much needed assistance with
everyday living expenses. For many, the program provides seniors with
the opportunity to remain in their own neighborhoods, close to family
and friends instead of being forced to live in nursing homes.
Mr. Speaker, it is profoundly disturbing that such a valuable tool
for our Nation's most vulnerable population has been jeopardized by
such practices. This legislation will prevent these activities and will
ensure that the reverse mortgage proceeds will go toward sustaining the
quality of life of seniors across America.
Mr. Speaker, the committee amendment to S. 562 will also extend
certain noncontroversial public housing reform measures for 12 months.
The committee amendment originally extended these provisions for 6
months, but at the request of the minority, the legislation will extend
these measures for a full year.
During this Congress and the last Congress, these public housing
reform measures have been enacted annually through the appropriations
process. These interim reforms are set to expire in only a few weeks,
on September 30, 1997. A short-term extension measure from the
authorizing committee, therefore, is necessary for the House and Senate
to complete a conference and enact permanent public housing reform.
Mr. Speaker, since the 103d Congress we have been working hard to
systematically and systemically reform our Nation's public housing
programs. In the last Congress both the House and Senate passed
comprehensive public housing reform legislation. Unfortunately, we were
unable to complete a conference on the two bills before recess. In the
105th Congress, this Congress, the House passed comprehensive public
housing reform last May by a vote of 293 to 132. Senate passage of
comparable legislation is anticipated in the next few weeks. A
conference is fully expected with a conference report to be completed
early in the second session.
Mr. Speaker, the legislation also extends the existing section 8
multifamily housing demonstration program for 1 year to prevent any
disruption to tenants or owners of section 8 developments while we
continue to pursue a permanent solution to the problem of expiring
section 8 contracts.
I will say that even if we could come to an agreement tomorrow, Mr.
Speaker, with the Senate on this provision, it would probably be at
least 1 year to 18 months before regulations were in place. This demo
extension is needed and is supported by the administration as well as
the National Leased Housing Association and other stakeholders. I want
to repeat it is supported by the administration and other stakeholders.
Finally, the legislation includes a number of housekeeping measures,
including a number of multifamily housing reforms at the request of the
administration, a 2-year extension of rural housing programs and a 2-
year extension of the National Flood Insurance Program, both of which
will expire at the end of this fiscal year unless we take action now.
Mr. Speaker, these extensions are critical to avoid a destabilization
of the marketplace and to ensure the continuity of service to needy
Americans. In particular, in regard to the National Flood Insurance
Program, if we fail to extend the program's borrowing authority, we
risk being unable to serve devastated families that are affected by
natural disasters. FEMA Director Witt indicated to me earlier this
month, as a matter of fact only a couple of days ago when he called me
at home, that without the extension of borrowing authority, FEMA would
be forced to turn away families in the
[[Page H7305]]
event of a significant disaster. We do not want that result. Mr.
Speaker, I urge all Members to support this legislation.
Mr. Speaker, I reserve the balance of my time.
Mr. KENNEDY of Massachusetts. Mr. Speaker, I yield myself such time
as I may consume.
Mr. Speaker, reluctantly I rise in opposition to S. 562 and urge my
colleagues to vote against it. I was surprised to learn, although I was
a few minutes late for the beginning of the opening statement of the
gentleman from New York [Mr. Lazio], that he indicated that the
administration supports this.
The fact of the matter is I talked to Secretary Cuomo over the
weekend. He indicated he was very strongly opposed, not to the
provisions that pertain to the Senior Citizen Home Equity Protection
Act, but he as well as the White House have all indicated to me that
they are very much opposed to the addition of the extenders plus the
mark-to-market provisions that are contained in this bill.
I think it is important to recognize that while I do not believe the
White House or that HUD or would we take much issue on the extenders on
various provisions that both the gentleman from New York [Mr. Lazio]
and I have talked about and agree in most of the provisions that we are
talking about here, the real problem comes with the containment of the
mark-to-market provisions.
There are two major problems with the bill. First, I would like to
point out to Members that we should not be deceived by the title, the
Senior Citizen Home Equity Protection Act. I am an original cosponsor
of that legislation in the House which would provide important
protections against scam artists who bilk senior citizens by charging
them excessive fees for reverse mortgage equity loans for services
which HUD provides as a matter of course.
The Senate has already passed the bill, and the right thing to do
would be to take up the Senate bill without modifications or additions.
If the majority party were doing so today, it would pass
overwhelmingly, and we could have it on the President's desk this week
for enactment into law.
Instead the majority party is playing games, adding on provisions
that the Senate will never take up, in effect delaying the final
passage of this important consumer protection bill for senior citizens.
Instead S. 562 has been modified to include many other provisions.
While most of these are reasonable, we in the minority believe that one
provision will undermine efforts to reach final agreement on critically
needed mark-to-market legislation.
This is an issue which we in the minority simply disagree with the
majority party in the House. We Democrats strongly support the Senate
bipartisan mark-to-market proposal which was included in both the
Senate reconciliation and the VA-HUD appropriations bills. We Democrats
want to include that bill in the VA-HUD conference report, but we are
opposed by the same House Republicans who do not support the bill.
In fact, the Senate bipartisan mark-to-market bill is essential to
provide an orderly transition to market-based section 8 rental
payments. This is necessary to preserve affordable housing and to
protect low-income families and seniors from displacement.
Also, the Congressional Budget Office has scored the Senate bill as
saving an additional $500 million. Including this in the VA-HUD
conference report would allow us to spend $500 million more on critical
priority areas like education, health care and housing. But instead,
today we are being called upon to reject the mark-to-market proposal
and instead pass a continuation of the demonstration program. It is
simply the wrong approach.
Finally, I would like to respond to the claim that it is important to
pass this bill to reassert the authority of the authorizing committee,
the Committee on Banking and Financial Services. This is a curious
claim indeed. First, I would like to point out that the Committee on
Banking and Financial Services itself has not even considered the bill
that we are voting on today. Second, I would like to point out that
most of the provisions of the bill are not new authorizing legislation,
but simply a continuation of existing policy or appropriations riders.
Finally, with regard to the mark-to-market approach, we have been
debating this issue in the Congress for years, but we have never held a
committee markup. It is understandable why Senate Republicans and
Democrats alike are frustrated with our lack of progress and have moved
on their own. It is time to send a bill to the President.
In conclusion, I would urge my colleagues to reject this bill. It
will not speed up the final enactment of senior citizens' home equity
protections, simply because the Senate will refuse to take up the
language if it is included with these extenders and the mark-to-market
legislation. All it will do is impede the progress of the critical
mark-to-market approach. It is the wrong bill, the wrong process, and I
urge a ``no'' vote.
Mr. Speaker, I reserve the balance of my time.
Mr. LAZIO of New York. Mr. Speaker, I yield such time as he may
consume to the gentleman from Iowa [Mr. Leach], the distinguished
chairman of the Committee on Banking and Financial Services.
Mr. LEACH. I thank the gentleman for yielding me this time.
Mr. Speaker, let me say there are several aspects of this bill before
us. One is an issue of sheer compassion, the whole precept of whether
senior citizens should be preyed upon and whether profiteering should
occur with regard to a very responsible Federal program which is
applicable in a limited number of circumstances, the so-called reverse
mortgage. The second relates to a series of issues of extenders that
are part of this bill and what is perceived to be a delaying tactic on
the minority side.
I think it fair to ask the gentleman from Massachusetts, what
extender does he object to? I say this because all of these provisions
were dealt with in a bill that came out of the Committee on Banking and
Financial Services called H.R. 2, or they are in current law. And so my
concern is what precise extenders does the gentleman object to?
Mr. KENNEDY of Massachusetts. Mr. Speaker, will the gentleman yield?
Mr. LEACH. I yield to the gentleman from Massachusetts.
Mr. KENNEDY of Massachusetts. For the sake of the record, I would
just like to point out to the gentleman that neither title III, title
IV nor title V were included in the legislation the gentleman is
referring to, No. 1.
No. 2, I do not really have a problem with a lot of the extenders. I
tried to pass a message along to the office of the gentleman from New
York [Mr. Lazio] saying that if he wanted to include the extenders but
exclude the mark-to-market approach, that I would be happy to support
this bill today.
What we are trying to get at here is the gentleman knows because he
was, I believe, at a meeting last week where he understands that
Senator Mack simply is not going to allow this legislation to be taken
up. Why do we not just mark up the mark-to-market legislation, separate
that out and go ahead and pass these protections on for the senior
citizens?
{time} 1400
Mr. LEACH. Mr. Speaker, reclaiming my time, I would simply say the
gentleman gave an opening introduction in which he objected to the
extenders. So there is no misunderstanding, the minority has no
objection to the extenders. They only object to the mark-to-market
provisions. The mark-to-market approach, which is a fairly subtle thing
in terms of the public perspective, is simply an extension of an
ongoing program.
Now, the question then becomes, what are we doing with the larger
issue for which there are certain differences with the other body? The
gentleman from New York [Mr. Lazio] has very thoughtfully introduced a
very comprehensive bill. It is in the public record. We have modest
differences with the other body on two large issues, both of which,
however, are in the context of which there is 95 percent agreement on
approach. It is the intent of the House side to be very forthcoming in
negotiations with the Senate on these issues. What we are attempting to
pass today is by no means intended to be delaying. It is intended to
take care of extenders that must occur this
[[Page H7306]]
month, and also to take care of a very compassionate issue.
So I would only say to the gentleman from Massachusetts [Mr. Kennedy]
that we have some very minor concerns about a given Senate approach in
the mark to market. We will negotiate with them very straightforwardly,
very reasonably, with the intent of protecting the U.S. taxpayer and
the public interest, and no other intent or any other motivation
whatsoever.
In so doing, we hope to come out with a better protective taxpayer
approach than has simply been endorsed by the other side today. But
there is nothing in this proposal that is designed to do anything
except advance what must be done this month under law and to take care
of an approach, if there is no agreement that can be reached with the
Senate. But we have total desire to reach agreement with the Senate.
The chairman of the subcommittee and the chairman of the full committee
are very committed to resolving this issue in this Congress and if at
all possible, in this session.
Mr. KENNEDY of Massachusetts. Mr. Speaker, I yield myself 1 minute to
respond to the statement by the chairman of the full committee, the
gentleman from Iowa [Mr. Leach]. I would like to point out while he
suggests that the mark to market issue is some minor issue that is not
out there in the public purview, that does not mean that it is not by
far and away the most important issue that we are talking about here.
It is fully half of the housing programs of this country.
What we are talking about is whether or not we are going to cost the
taxpayers of this country an additional $500 million this year. I would
suggest to the chairman of the full committee that there is in fact a
substantive reason for doing this, and that is that it will take away
from the impetus to get this bill passed.
You have a bipartisan approach that has passed in the U.S. Senate.
All it requires is for us to move this bill in the Committee on
Appropriations and get this thing done. While we sit and dawdle and
dither, we end up costing the taxpayer millions and millions of
dollars.
This is simply a tactic to throw in what is not an issue that is in
the public view, it is out of the public view, but if you shove this
into this bill, what will end up occurring is we will cost the taxpayer
money. We will do it without ever showing them the light of day as to
what has happened, and it will give a great deal more credence to the
ability of the chairman of the Subcommittee on Housing and Community
Opportunity to then gut the protections for the poor that will be
contained in the bill. That is the ultimate objective of what is
occurring here today.
Mr. Speaker, I reserve the balance of my time.
Mr. LAZIO of New York. Mr. Speaker, I yield myself two minutes for
the purpose of entering into a dialog with the gentleman from
Massachusetts [Mr. Kennedy].
Let me begin by saying that I believe deeply that this demonstration
program needs to be extended. I think even if we were to come to an
agreement tomorrow with the Senate, and I think the chairman of the
full panel has explained what our position is, we would still need,
because of regulations and rules, there would be a time between 12 and
18 months before we would get an actual program in effect, in which we
would need this extension.
I hear the gentleman from Massachusetts has no intention of going
along with that, and these other reforms and extensions are so
important at this point. We cannot allow the flood insurance program to
lapse, we cannot allow these extenders to lapse, and we need to protect
seniors to the point where I am wondering if I made a unanimous consent
request to delete the sections that are offensive to the gentleman from
Massachusetts, if that would win his support of the rest of the
provisions of this measure?
Mr. KENNEDY of Massachusetts. Mr. Speaker, will the gentleman yield?
Mr. LAZIO of New York. I yield to the gentleman from Massachusetts.
Mr. KENNEDY of Massachusetts. Mr. Speaker, it would indeed. I very
much appreciate the chairman's willingness to provide that kind of
compromise and I look forward to working with the gentleman on the mark
to market issue. I think there are a number of extenders, and I just
wanted to let the gentlemen know as well as the chairman of the full
committee, the gentleman from Iowa [Mr. Leach], know that I know the
gentleman from Nebraska [Mr. Bereuter] and others have had concerns
about rural housing programs and a number of other extenders.
I did try to communicate to the chairman's office that we would be
happy to work with the gentleman on those noncontroversial extenders,
and I appreciate the offer that the gentleman has made here on the
floor.
Mr. FRANK of Massachusetts. Mr. Speaker, will the gentleman yield?
Mr. LAZIO of New York. I yield to the gentleman from Massachusetts.
Mr. FRANK of Massachusetts. Mr. Speaker, I want to express my
appreciation to the gentleman for doing this. I would urge the next
time, to the gentleman, work this out before the gentleman ruins my
afternoon.
Mr. LAZIO of New York. Mr. Speaker, reclaiming my time, let me hold
my tongue.
Modification to Motion Offered by Mr. Lazio of New York
Mr. LAZIO of New York. Mr. Speaker, I ask unanimous consent that S.
562 be amended to strike sections 301 and 302 from title III.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from New York?
There was no objection.
The text of the modification is as follows:
Modification offered by Mr. Lazio of New York.
Beginning on page 6, line 5 strike out sections 301 and 302
and renumber succeeding sections accordingly.
Mr. LAZIO of New York. Mr. Speaker, I yield such time as he may
consume to the distinguished gentleman from Nebraska [Mr. Bereuter], my
friend and colleague on the Committee on Banking and Financial Services
and the Subcommittee on Housing and Community Opportunity.
Mr. BEREUTER. Mr. Speaker, I rise in strong support of S. 562, as
amended, and urge my colleagues to vote for this important measure. I
thank the gentleman for his work on the legislation, his initiative,
and this Member also felt that the comments of the gentleman from Iowa,
the chairman, should have been compelling when he discussed the
motivations and objectives of the legislation. But I am glad to see we
seem to have arrived at an arrangement here which while it will not
satisfy everybody, nevertheless permits, for example, the extenders to
go ahead.
Mr. Speaker, as the title of the bill implies, this measure protects
senior citizens, one of the Nation's most exploited populations, from
unscrupulous financial service providers.
Recent years have seen the development of truly innovative financial
tools to assist our aging population. Among these is the reverse
mortgage. This product rewards seniors for exercising financial
prudence by allowing them to have access to the equity they have built
up in their homes without taking out a new first trust mortgage.
Unfortunately, as mentioned a few moments ago, unscrupulous financial
planners sometimes have been gouging seniors with inappropriate fees
for information which is otherwise available free of charge.
This measure authorizes the Secretary of Housing and Urban
Development to take appropriate actions to restrict unnecessary and
excessive costs associated with reverse mortgages. The authority should
enable HUD to maintain the reverse mortgage as a valued tool in
financial planning for seniors, and protect them from being exploited
unwittingly.
In addition to the important protections provided to seniors, this
measure also contains two other important provisions, among others,
which this Member supports.
First, the bill extends for two years section 538, the rural rental
multifamily housing loan guarantee program. Legislation permanently
authorizing the section 538 loan guarantee program passed the House on
April 8, 1997, by an overwhelming bipartisan vote. Unfortunately, the
other body has failed to consider this legislation for other extraneous
reasons, I gather, and, thus, a more modest authorization is included
in this measure.
[[Page H7307]]
The section 538 loan guarantee program, which this Member authored
with lots of help from his colleagues on both sides of the aisle,
guarantees repayment of loans made by private lenders to either State
housing agencies, nonprofit organizations, or for-profit investors, who
build or rehabilitate affordable multifamily rental problems in
nonmetropolitan areas. This innovative program is a prudent and cost-
effective supplementary program to the traditional expensive Federal
direct lending program.
Another provision which this Member supports is a 2-year
reauthorization of the National Flood Insurance Program, which the
subcommittee chairman has mentioned, or NFIP. As a member of the
Committee on Banking and Financial Services, this Member was actively
involved in writing parts of the recently enacted NFIP reform
legislation under the leadership of the gentleman from New York,
Chairman Lazio.
Therefore, this Member is pleased that the program will continue to
operate at least somewhat more effectively for 2 more years until this
Congress or some future Congress finally enacts the more fundamental
reforms which are certainly needed. Note should be made that a
problematic provision included in recent disaster assistance
legislation has expired and is not extended by this bill. Specifically,
a provision lowering the waiting period on new flood policies from 30
to 15 days has expired, and for the benefit of the American taxpayer it
should not be resurrected.
In closing, Mr. Speaker, this Member strongly supports this
legislation and urges his colleagues and the Members of the other body
to approve this measure as soon as possible.
Mr. KENNEDY of Massachusetts. Mr. Speaker, if the chairman of
committee has no further speakers, I yield back the balance of my time.
Mr. LAZIO of New York. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I would just once again urge all Members to support
these important extensions, protection for senior citizens from being
ripped off, antifraud provisions, protections for public housing in
general. This is an important vote for rural housing, for people in
flood-prone areas to ensure they have proper protection, and I would
urge an aye vote.
Mr. Speaker, I include a section-by-section analysis of S. 562 for
the Record.
S. 562--Section-by-Section
Section 1. Short title
Provides that the name of the Act may be cited as the
``Housing Programs Extension Act of 1997''.
TITLE I--SENIOR CITIZEN HOME EQUITY PROTECTION
Section 102. Disclosure requirements, prohibition of funding
of unnecessary or excessive costs
Amends Section 235(d) of the National Housing Act involving
Home Equity Conversion Mortgages insured under FHA, and (1)
requires a full disclosure of all costs related to
originating the mortgage and (2) clarifies the HUD
Secretary's authority to appropriately restrict unnecessary
or excessive costs related to the origination of the reverse
mortgage.
Section 103. Implementation
Requires the HUD Secretary to issue expeditiously an
interim notice to implement the provisions of the Act.
Further provides that the Secretary shall, within ninety days
of the date of enactment, issue final regulations, after
notice and opportunity for comment.
TITLE II--TEMPORARY EXTENSION OF PUBLIC HOUSING AND SECTION 8 RENTAL
ASSISTANCE PROVISIONS
Section 201. Public housing ceiling rents and income
adjustments and preferences for assisted housing
Extends the public housing ceiling rents authority and the
definition of adjusted income under the public housing
program, and the suspension of Federal preferences, through
September 30, 1998.
Section 202. Public housing demolition and disposition
Extends the suspension of the one-for-one replacement
requirement through September 30, 1998.
Section 203. Public housing funding flexibility and mixed-
finance developments
Extends the public housing flexible funding and mixed-
finance development authorities through September 30, 1998.
The flexible funding authority enables public housing
authorities to use their modernization assistance under
section 14 and their development assistance under section 5
of the 1937 Act for any eligible activity authorized under
sections 14, 5, or applicable Appropriations Acts (HOPE VI),
and for up to 10% of such assistance, any operating subsidy
purpose authorized by section 9 of the 1937 Act.
Section 204. Minimum rents
Extends the minimum rent requirement (requiring minimum
rents of up to $50) through September 30, 1998.
Section 205. Provisions relating to section 8 rental
assistance program
(a) Take-One, Take-All, Notice Requirements, and Endless
Lease Provisions. Extends suspension of three requirements of
the Section 8 program (``take-one, take-all''; 90-day notice
requirement; and ``endless lease'') through September 30,
1998.
The ``take-one, take-all'' provision of the 1937 Act
requires owners who have entered into a housing assistance
payments contract on behalf of any tenant in a multifamily
housing project to lease any available unit in the project to
an otherwise qualified holder of a certificate or voucher.
The 90-day notice provision for the Certificate and Voucher
programs require that owners notify tenants 90 days prior to
termination of a contract.
The ``endless lease'' provision requires that owners not
terminate tenancy except for serious or repeated violations
of the lease, the law, or for other good cause. This section
would limit this requirement to the lease term.
(b) Fair Market Rentals. Extends through September 30,
1998, the requirement that the Secretary establish fair
market rents for an area, for purposes of the Section 8
program, at a level equal to the 40th percentile rent of
rental distributions of standard quality rental units for the
area.
TITLE III--REAUTHORIZATION OF FEDERALLY ASSISTED MULTIFAMILY RENTAL
HOUSING PROVISIONS
Section 303. Multifamily housing finance pilot programs
Extends through September 30, 1998, two multifamily risk-
sharing demonstration programs, with a 15,000 additional unit
limitation for each. Multifamily risksharing with qualified
financial entities was authorized by the Housing and
Community Development Act of 1992 (Section 542). The program
enables HUD to enter into risk-sharing partnerships to
provide rental housing through two pilot programs for
qualified financial entities and for qualified housing
finance agencies, and allows FHA to support the multifamily
housing market through traditional and new products.
Section 304. HUD disposition of multifamily housing
Enhanced Authority for HUD Disposition of Multifamily
Housing. Section 204 of HUD's FY 1997 appropriations Act gave
HUD permanent authority to manage and dispose of HUD-owned
multifamily properties and mortgages held by the Secretary on
such terms and conditions as HUD determines, notwithstanding
any other provision of law. Clarifies that the authority to
manage and dispose of HUD-owned properties includes the
provision of grants and loans from the General Insurance Fund
for the necessary costs of rehabilitation or demolition.
Section 305. Multifamily mortgage auctions
Extends the authority to auction mortgages insured under
Section 221 of the National Housing Act through December 31,
2005. The current authority expired at the end of FY 1996,
and unless extended, HUD will be forced to take assignment of
any mortgage where the mortgagee elects to assign such
mortgage to HUD. As a result, HUD will incur the financial
costs of servicing these mortgages until they are sold in a
competitive sale. In addition, extending HUD's ability to
auction mortgages prior to assignment allows the mortgage to
remain in private hands and avoids payment of a claim against
the FHA fund. Costs of the auction activity would be paid
from multifamily credit subsidy.
Section 306. Interest reduction payments in connection with
sales of section 236 mortgages held by HUD
Provides HUD with limited authority to sell a certain
percentage of section 236 mortgages under the National
Housing Act with the interest reduction payments contract
intact. In this way, the payments would remain available to
the project to assist with affordability of the units,
support rehabilitation (if any), and increase the selling
price of the mortgage. The authority under this provision is
limited to an amount of loans which in the aggregate shall
not have an unpaid principal balance in excess of
$92,000,000, and exercise of the authority shall be subject
to prior approval in an appropriations Act.
Section 307. Assignment of regulatory agreements in
connection with sales of mortgages held by HUD
Permits HUD to provide for the assumption of all rights and
responsibilities under the regulatory agreement when it sells
a HUD-held mortgage. The provision would enable HUD to reduce
staff time associated with assets which have already been
sold.
TITLE IV--REAUTHORIZATION OF RURAL HOUSING PROGRAM ACT OF 1997
Section 401. Housing in underserved areas program
Amends Section 509(f)(4)(A) of the Housing Act of 1949 to
extend its authorization for
[[Page H7308]]
two additional fiscal years, from fiscal year 1997 to fiscal
year 1999. This program provides a set-aside out of Sections
502 (single-family), 504 (Repair Loans and Grants), 514 (Farm
Labor), 515 (Multifamily Housing) and 524 (site loans) for
projects in underserved counties as defined by the Housing
Act of 1949.
Section 402. Housing and related facilities for elderly
persons and families and other low-income persons and
families
(a) Authority to Make Loans. Extends Section 515(b)(4) of
the Housing Act of 1949, the authority of the Secretary of
Agriculture to make loans, for two additional fiscal years
until September 30, 1999. Section 515 provides for
multifamily housing loans.
(b) Set-Aside for Non-Profit Entities. Extends Section
515(w)(1) of the Housing Act of 1949, providing for a certain
level of funding to be set-aside for non-profit entities, for
an additional two fiscal years until September 30, 1999.
Section 403. Loan guarantees. For multifamily rental housing
in rural areas
Amends Section 538(q) of the Housing Act of 1949 by
inserting a new provision establishing that the Secretary may
enter into loan guarantee commitments under this section only
to the extent that the costs of the guarantees entered into
in a fiscal year do not exceed the amounts provided for that
fiscal year in appropriations Acts.
Amends Section 538(t) to extend authorization for loan
guarantees made under this title until fiscal year 1999.
TITLE V--REAUTHORIZATION OF NATIONAL FLOOD INSURANCE PROGRAM
Section 501. Program expiration
Amends Section 1319 of the National Flood Insurance Act of
1968 to extend the Act for two additional years until
September 30, 1999.
Section 502. Authorization of borrowing authority
Amends Section 1309 of the National Flood Insurance Act of
1968 to extend the borrowing authority until September 30,
1999.
Section 503. Emergency implementation of program
Amends Section 1336(a) of the National Flood Insurance of
1968 to extend the expiration date until September 30, 1999.
Section 504. Authorization of appropriations for studies
Amends Section 1376(c) of the National Flood Insurance Act
of 1968 to extend funding authorization for appropriations,
in such sums as may be necessary, for studies conducted under
the relevant title of the Act, for each of fiscal years 1998
and 1999.
Mr. GILMAN. Mr. Speaker, I rise in support of the Senior Citizen Home
Equity Protection Act. Senior citizens are one of our Nation's greatest
assets. The guidelines set by this bill will help protect seniors from
losing the financial independence they have worked all their lives to
achieve.
The Senior Citizen Home Equity Protection Act gives the U.S.
Department on Housing and Urban Development authority to issue rules to
protect seniors from being overcharged while trying to obtain reverse
mortgages. This act also requires that the mortgagor receives a full
disclosure of all the costs acquired while attempting to attain this
type of mortgage.
A reverse mortgage allows senior citizens age 62 or older to borrow
money against the equity of their homes and does not require them to
make monthly or principal payments. The purpose of a reverse mortgage
is to allow seniors who are ``house rich,'' but ``cash poor'' to access
the equity they have invested in their homes so they may have the money
they need to live comfortably on a day to day basis.
If it were not for reverse mortgages, a senior citizen homeowner
might have to put their home on the market to cash in on its equity
just so they can survive. This would also result in their having no
other option but to move into a retirement home, ultimately making them
lose the peace of mind and security they had built up in the
neighborhoods they used to live in.
Some senior citizens may need our help in protecting the equity which
they spent most of their lives in building. That is why I urge my
colleagues to join in unanimously supporting the Senior Citizen Home
Equity Act.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise in support of S. 562,
the Senior Citizen Home Equity Protection Act.
This bill would authorize the Housing and Urban Development [HUD]
Department to issue rules to protect senior citizens from being charged
unreasonable fees for obtaining reverse mortgages; it reauthorizes for
2 years Federal rural multifamily rental housing development programs
and the National Flood Insurance program; it extends for 6 months
certain public housing reforms that have been included in
appropriations acts the past 2 fiscal years; and it extends for 1 year
a section 8 portfolio reengineering demonstration program included in
last year's VA-HUD appropriations act.
Maintaining a secure, fair and reliable source of credit for home
purchases by senior citizens is very important to me. The service that
past generations provided this country is invaluable. Through two World
Wars and economic downturns, they stayed the course and kept this
country on track to become the economic, social and political success
that it is today.
This bill will provide security for seniors who for whatever reason
want to purchase a home.
On the behalf of the residents of the 18th Congressional District I
am in full support of this bill and would like to urge my colleagues to
join me in voting for this measure.
Mr. PAUL. Mr. Speaker, today we are asked to support a bill which has
the Federal Government engaged in the unconstitutional business of
further regulating mortgage brokers, extending Federal housing
programs--some of which would be extended permanently by this bill--and
offering flood insurance programs.
This bill will add new regulations by Government and impose new
restrictions on the private sector which provides most of the safe and
affordable housing in this country. Such regulations and restrictions
raise costs and limit availability of housing for our citizens insofar
as such additional costs may ultimately be passed along to the
consumer. This bill will further add to the Federal Government's
intrusion in the housing market by limiting private sector initiatives
to help consumers obtain mortgage loans, and eventually, their own
homes.
Second, this bill would make authorization of some programs permanent
so that future representatives of the people will not be able to judge
the wisdom of these specific programs. To the extent Congress has any
constitutional right to legislate in this sphere at all, certainly,
Representatives must have the legal ability to weigh the specific needs
of their constituents and make appropriate decisions. Some of these
multi-housing programs are mere demonstration projects which have not
proved their worthiness. They have, however, proved their cost to the
taxpayer with ever-rising tax bills without the corresponding benefits.
Government-run housing schemes are less efficient, more costly and
limit the private sector's ability to provide the services that the
public wants at a price that properly takes into account true economic
costs. Even such misnamed ``good government'' housekeeping provisions
merely perpetuate and extend the Government's reach into the private
sector and, ultimately, into the wallets of taxpaying Americans.
With respect to Federal flood insurance programs, the constitutional
separation of powers strictly limited the role of the Federal
Government and, at the same time, anticipated that maintaining the
balance between cost, risk, and the benefits of insuring one's property
was best reserved--via the ninth and tenth amendments--to State and
local governments, or individuals respectively. One can insure oneself
against virtually every natural disaster at some policy premium.
Determination of whether the peace of mind and other benefits of
insurance outweigh the premium for any particular property is not
amongst the constitutionally enumerated Federal powers. The private
market provision and resulting cost internalization of such insurance
premiums will accomplish much toward enhancing macroeconomic efficiency
and, at the same time, eliminate the necessity for the national
government to overstep its constitutional bounds with governmental
``pseudo-insurance.''
In addition, this bill did not go through the proper committee
process. I am a member of the House Committee on Banking and Financial
Services and have not had the opportunity to vote on, amend, improve,
or block this piece of legislation. It is in the committee process,
where respective Members make it their responsibility to be better
versed in that committee's respective issues, amend and hopefully
improve bills as they move through the legislative process. Members of
the Banking Committee should have had the opportunity to review
relevant legislation before it is voted on by the entire House of
Representatives.
As a U.S. Congressman, I remain committed to the Constitution which
I, only months ago, swore to uphold. This country's founders recognized
the genius of separating power amongst Federal, State and local
governments as a means to maximize individual liberty and make
Government most responsive to those persons who might most responsibly
influence it. For each of these reasons, I must rise in opposition to
S. 562, the Senior Citizen Home Equity Protection Act.
Mr. LAZIO of New York. Mr. Speaker, I have no further requests for
time, and I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from New York [Mr. Lazio] that the House suspend the rules
and pass the Senate bill, S. 562, as amended.
The question was taken.
Mr. CONDIT. Mr. Speaker, I object to the vote on the ground that a
quorum
[[Page H7309]]
is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Pursuant to clause 5, rule I, and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
The point of no quorum is considered withdrawn.
____________________