[Congressional Record Volume 153, Number 111 (Thursday, July 12, 2007)]
[Extensions of Remarks]
[Page E1501]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           SUPPORTING HOME OWNERSHIP AND RESPONSIBLE LENDING

                                 ______
                                 

                               speech of

                        HON. SHEILA JACKSON-LEE

                                of texas

                    in the house of representatives

                         Tuesday, July 10, 2007

  Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise today in proud support 
of H. Res. 526, as offered by my distinguished colleague from Maryland 
and fellow member of the U.S. House Committee on Transportation and 
Infrastructure, Congressman Elijah Cummings. This resolution seeks to 
recognize and support home ownership and responsible lending.
  Ownership of property is an exciting prospect, especially when 
individuals acquire property that they can truly call ``their'' own. As 
once stated in Essence magazine, ``ownership gives a sense of power and 
permanence; you are the ruler of your castle and not the pawn of a 
landlord.'' For many Americans, home ownership is an important 
attribute to realizing the American dream. Whether it means buying a 
home for the first time or refinancing, home ownership is a powerful 
economic stimulus, both for the individual homeowners, as well as the 
national economy. It benefits neighborhoods by raising property values 
and providing economic and social capital in previously distressed 
communities.
  Mr. Speaker, our Nation recently experienced a housing boom from 2001 
to 2006, due to historically low mortgage rates, rising home prices, 
and increased liquidity in the secondary mortgage market--factors that 
led to the growth of the sub-prime mortgage industry. In the year 2006 
alone, more than 75,000,000 Americans owned homes, and the home 
ownership rate reached a near record high of nearly 69 percent. For 
non-Hispanic whites in 2006, the home ownership rate was 76 percent, 
while the rate for African Americans fell at only 48.2 percent. 
Hispanic home ownership rate was at 49.5 percent, and that of Asians, 
Native Americans, and Pacific Islanders were at 60 percent.
  The buying of a home is usually the largest purchase that most people 
will ever make in their lifetime. To many individuals, this is known as 
a ``huge responsibility with great benefits.'' Sub-prime market has 
created home ownership opportunities for lower-income people, families 
without access to down payments and people with little or no credit 
histories. On the other hand, it has also created opportunities for 
``predatory'' lending, where unscrupulous lenders hide the true cost of 
sub-prime loans from unsophisticated borrowers.
  Higher cost sub-prime mortgage loans are most prevalent in lower 
income neighborhoods with high concentration of minorities. This is 
simply unacceptable. In the past few months, it has become increasingly 
clear to the American people that irresponsible sub-prime lending 
practices have contributed to a wave of foreclosures, which are in 
essence, harming our communities and disrupting housing markets. In 
2005, 53 percent of African Americans and 37.8 percent of Hispanics 
took out sub-prime loans.
  Home ownership is critical in building wealth because it signifies 
the accumulation of appreciable assets. It has been proven consistently 
that property usually constitutes one's greatest financial asset 
because ownership of property is one of the single largest investments 
that an individual can make. On the other hand, foreclosures can be 
detrimental to an individual, legally and administratively. The average 
foreclosure causes lenders to loose thousands of dollars and costs the 
borrower an average $7,200 in administrative charges. For the local 
government, abandoned homes cost districts tax revenues.
  As a public servant and a representative of the people, I strongly 
urge my colleagues to vote in favor of H. Res. 526. The time has come 
for us to raise awareness about the dangers of risky loans and to 
protect homeowners from unscrupulous lending practices from mortgage 
brokers and lenders. We must demand the enforcement of rules 
eliminating unfair and deceptive practices in sub-prime mortgage 
lending, as well as the establishment of clear minimum standards for 
mortgage originators. Among many things, H. Res. 526 would help in the 
reduction and elimination of abuses in prepayment penalties, as well as 
increase opportunities for loan counseling.
  Knowledge is the remedy for fear, however knowledge is not enough. We 
must apply that knowledge to achieve change.