[Congressional Record Volume 153, Number 138 (Tuesday, September 18, 2007)]
[House]
[Pages H10440-H10445]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PROVIDING FOR CONSIDERATION OF H.R. 1852, EXPANDING AMERICAN
HOMEOWNERSHIP ACT OF 2007
Ms. MATSUI. Mr. Speaker, by direction of the Committee on Rules, I
call up House Resolution 650 and ask for its immediate consideration.
The Clerk read the resolution, as follows:
H. Res. 650
Resolved, That at any time after the adoption of this
resolution the Speaker may, pursuant to clause 2(b) of rule
XVIII, declare the House resolved into the Committee of the
Whole House on the state of the Union for consideration of
the bill (H.R. 1852) to modernize and update the National
Housing Act and enable the Federal Housing Administration to
use risk-based pricing to more effectively reach underserved
borrowers, and for other purposes. The first reading of the
bill shall be dispensed with. All points of order against
consideration of the bill are waived except those arising
under clause 9 or 10 of rule XXI. General debate shall be
confined to the bill and shall not exceed one hour equally
divided and controlled by the chairman and ranking minority
member of the Committee on Financial Services. After general
debate the bill shall be considered for amendment under the
five-minute rule. The amendment in the nature of a substitute
recommended by the Committee on Financial Services now
printed in the bill, modified by the amendment printed in
part A of the report of the Committee on Rules accompanying
this resolution, shall be considered as adopted in the House
and in the Committee of the Whole. The bill, as amended,
shall be considered as the original bill for the purpose of
further amendment under the five-minute rule and shall be
considered as read. All points of order against provisions in
the bill, as amended, are waived. Notwithstanding clause 11
of rule XVIII, no further amendment to the bill, as amended,
shall be in order except those printed in part B of the
report of the Committee on Rules. Each further amendment may
be offered only in the order printed in the report, may be
offered only by a Member designated in the report, shall be
considered as read, shall be debatable for the time specified
in the report equally divided and controlled by the proponent
and an opponent, shall not be subject to amendment, and shall
not be subject to a demand for division of the question in
the House or in the Committee of the Whole. All points of
order against such further amendments are waived except those
arising under clause 9 or 10 of rule XXI. At the conclusion
of consideration of the bill for amendment the Committee
shall rise and report the bill, as amended, to the House with
such further amendments as may have been adopted. The
previous question shall be considered as ordered on the bill
and amendments thereto to final passage without intervening
motion except one motion to recommit with or without
instructions.
Sec. 2. During consideration in the House of H.R. 1852
pursuant to this resolution, notwithstanding the operation of
the previous question, the Chair may postpone further
consideration of the bill to a time designated by the
Speaker.
The SPEAKER pro tempore. The gentlewoman from California is
recognized for 1 hour.
Ms. MATSUI. Mr. Speaker, for the purpose of debate only, I yield the
customary 30 minutes to the gentleman from Texas (Mr. Sessions),
pending which I yield myself such time as I may consume. During
consideration of this resolution, all time yielded is for the purpose
of debate only.
(Ms. MATSUI asked and was given permission to revise and extend her
remarks.)
Ms. MATSUI. Mr. Speaker, as the Clerk just read, H. Res. 650 provides
for consideration of H.R. 1852, the Expanding American Homeownership
Act, under a structured rule. The rule provides 1 hour of general
debate to be controlled by the Committee on Financial Services. The
rule makes in order seven amendments printed in the Rules Committee
report.
This bill is being considered under a structured rule that will allow
the House to consider amendments to address important issues with
regard to this legislation. I look forward to the debate on the
important issue before us today.
I rise today in support of the rule providing for the consideration
of the Expanding American Homeownership Act and for the underlying
legislation. I thank Subcommittee Chairwoman Waters for offering this
bill. I thank Chairman Frank and Ranking Member Bachus for their hard
work, along with the other members of the Financial
[[Page H10441]]
Services Committee, in bringing this important legislation to the
floor.
The bill underlying this house resolution addresses an issue of
critical importance to our constituents and to our economy, the
subprime mortgage lending crisis. We are here today to consider
reforming the Federal Housing Administration's loan policies as a means
of stemming the tide of foreclosures that have besieged our Nation.
Owning a home is part of the American Dream, but predatory lenders
have been crushing that dream by taking advantage of home buyers with
damaged credit. Lured by attractive initial terms, vulnerable home
buyers who do not qualify for federally backed loans take on subprime
mortgage loans that they cannot afford. These loans come with
escalating interest rates which start low and encourage overborrowing.
The borrowers learn too late, when their homes are foreclosed upon,
that they will not be able to afford those higher payments.
We are now faced with the unfortunate situation that our residents
are losing their homes in record numbers. The increasing rate of
foreclosure continues to make the news in California and across the
Nation. Data released just last month show the rising foreclosure rates
in cities across the country. The numbers are as high as one
foreclosure in every 27 households. That is not acceptable.
And the housing market continues to suffer. Last week a report from
my Sacramento district cited a more than 13 percent drop in the median
home prices in the past year. That is the largest 1-year drop in 20
years.
{time} 1030
Despite good economic growth in the region, the housing market is in
trouble. Many point to the subprime mortgage crisis to explain this.
Trends like this can be seen across the country, not just in
Sacramento.
The administration wants to allow 80,000 people to refinance their
loans through FHA. That is good but it is not going to address the
scope of this problem. More than 2 million adjustable rate mortgages
are up for reset this fall, at which time their interest rates will
increase. Two million mortgages, that is 2 million more families who
will be at risk at losing their homes if they cannot keep up with the
higher payments. This pattern cannot continue.
The housing market crunch, driven by the subprime mortgage lending
troubles, is making waves throughout our economy. Over the past few
months, we have seen the Federal Reserve cut its discount rate and make
an additional $62 billion available to try to stabilize the real estate
financial market. Last month, Countrywide Financial, the largest home
mortgage lender, was trading at levels comparable to junk bonds. And,
lastly, AIG, the world's largest insurer and one of the biggest
mortgage lenders, stated that delinquencies and foreclosures are
becoming more common among borrowers whose credit rates are just above
subprime. So the problem is getting worse, not better. Congress needs
to act and we need to act now.
The bill we are considering today will overhaul the Federal Housing
Administration to make federally backed loans competitive with subprime
and other nontraditional mortgage loans. We need to make sure that
subprime mortgages are properly regulated to get our home buyers into
good loans and rein in predatory lenders. The bill authorizes FHA to
offer loans with little or no down payment and directs it to approve
loans to borrowers with higher credit risk than is currently allowed.
These measures will enable FHA to compete with the introductory teaser
rates advertised by subprime lenders.
The bill will raise the single-family loan limit, enabling families
who live in more expensive areas, such as California, to qualify for
FHA-backed loans. The FHA has virtually no presence in expensive areas
where the average price of a home already exceeds the FHA loan limit.
Increasing access to FHA-backed loans will give many thousands of our
constituents the stable financing terms that they need to keep up with
their payments and stave off foreclosure.
Furthermore, this bill offers relief to our seniors. Seniors are
often targeted by subprime loans, especially for reverse mortgages.
Seniors who own their homes but who have limited financial resources
might need to mortgage their homes to pay for other expenses. This bill
eliminates the cap on FHA reverse mortgages to meet with growing needs
of our seniors in tight financial times.
Finally, the legislation directs surplus FHA funds to a housing
counseling program as well as to an affordable housing fund. In this
way the legislation will ensure that borrowers have the opportunity to
achieve the dream of owning a home as well as to become educated about
their mortgage options and what it will mean in the long term.
The mortgage lending troubles are getting out of control. This bill
will take an important first step toward reining in a disturbingly high
rate of foreclosure. Later this week Chairman Frank will hold a hearing
with Federal Reserve Chairman Bernanke and other administration
officials to look for additional legislative and regulatory solutions
to this growing problem. Ensuring that FHA lending policies are up to
date and competitive in the current market is a good start.
This bill will ensure that our fellow Americans have better federally
backed choices to buy a home. This bill will curtail the spread of
subprime lending and get more of our homeowners into mortgage loans
with stable interest rates and transparent terms. This is a step in the
right direction.
This is a bipartisan issue. The House passed similar legislation in
the 109th Congress. This bill expands upon that legislation, reflective
of the growing crisis. We need to pass this bill. Our constituents need
this bill to keep their homes, and we need to work with our colleagues
in the Senate to get this bill to the President.
I look forward to the debate on the Expanding Homeownership Act and
hope that my colleagues on both sides of the aisle will join me in
supporting this rule and the underlying bill.
Mr. Speaker, I reserve the balance of my time.
Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
I rise in reluctant opposition to this unnecessarily restrictive rule
and to a number of the provisions included in the underlying
legislation in its current form. While I appreciate and support the
committee's effort to provide for the safety and soundness of our
Nation's housing financial system and our broader financial system,
this legislation has a number of avoidable shortcomings, and I hope
that at least some of them would be corrected during the restrictive
amendment process provided for by this rule.
The Federal Housing Administration was created by the National
Housing Act of 1934 to broaden homeownership, protect lending
institutions, and to stimulate the home construction industry. In
addition to providing stability and liquidity to the mortgage market,
the FHA's efforts have led to the creation of the 30-year mortgage
product and mortgage instrument standardization, both of which have
contributed to the growth of our modern housing financial marketplace.
And, as one of the very few Federal Government agencies to operate
entirely on fees derived from the program, the FHA has accomplished all
of this with no taxpayer dollars or subsidy.
The legislation that has been brought to the House floor today
includes a number of important modernization provisions that will help
American families across this country to own their own homes, like:
increasing the FHA loan limit for high-cost areas, providing for
flexible down payment requirements, simplified and improved condo loan
requirements, and an expansion of the ability to utilize home equity
conversion mortgages.
This bill closely mirrors H.R. 5121, Republican legislation that
passed overwhelmingly last Congress, and would also supplement the FHA
Secure Initiative unveiled by President Bush at the end of August. This
program, which is aimed at borrowers who have fallen behind on their
payments after a mortgage rate reset, is projected to help a quarter of
a million families over the next year. By helping first-time, owner-
occupied home buyers refinance into mortgages that they can afford,
this already implemented program will help families and stabilize
communities, while targeting this support to the real families in need
and
[[Page H10442]]
away from speculators who do not need help from the Federal Government.
Unfortunately, despite all the positive elements included in this
legislation, I do believe that this bill could be vastly improved.
Chief among the problems with this legislation is its establishment of
a new line of income for a poorly defined affordable housing grant fund
linked to increased FHA receipts. FHA receipts are already recognized
for future budgeting purposes to help determine subsequent affordable
housing program appropriations at HUD, with any extra revenue from
these programs deposited in the U.S. Treasury as a benefit to
taxpayers. This legislation would divert this revenue to a housing fund
with a poorly defined mission, reducing resources available for other
existing HUD programs that already assist low-income families and
individuals.
I believe it is bad public policy to tie the fate of families that
need housing support to the success or failure of the FHA to bring in
surplus revenue. Even worse, because the affordable housing funds would
come from fees related to conforming loans and reverse mortgages, this
bill levies a new stealth tax on the most modest home buyers and on
seniors without even disclosing to them the costs associated with this
new Federal mandate.
Other problems with H.R. 1852 include its failure to provide the FHA
with the flexibility needed to implement risk-based pricing, which
limits consumer choice as well as the FHA's ability to help additional
home buyers. This bill's proposed 2 percent limit on home equity
conversion mortgage loan origination fees proposed in the legislation,
which attempts to protect senior citizens from potentially abusive
lending practices, may also unnecessarily limit choice and flexibility
in a changing marketplace.
Mr. Speaker, I would like to thank committee ranking Republican
Spencer Bachus; subcommittee ranking Republican Judy Biggert; and the
incoming ranking Republican on the Housing and Community Opportunity
Subcommittee, my former Rules Committee colleague, Shelley Moore
Capito, for all their hard work on this legislation.
Mr. Speaker, I will also insert in the Congressional Record the
Statement of Administration Policy regarding this legislation and would
like to take this opportunity to thank two people for their hard work
from the White House, White House aides Chris Frech and Marty
McGuinness, who have provided important information not only on this
but worked with Members to make sure that they understood the White
House's position on this issue.
Executive Office of the President, Office of Management
and Budget,
Washington, DC, September 17, 2007.
Statement of Administration Policy
H.R. 1852--Expanding American Homeownership Act of 2007 (Rep. Waters
(D) CA and 13 cosponsors)
The Administration supports legislation to modernize and
reform the National Housing Act (NHA) and to ensure that the
Federal Housing Administration (FHA) continues to play a key
role in serving low- and moderate-income homebuyers. The
President has called on Congress to expeditiously pass the
Administration's FHA Modernization bill to assist more
homeowners during this period of stress in the mortgage
markets. H.R. 1852, as reported by the House Financial
Services Committee, includes provisions that are essential to
maintaining FHA's core mission of expanding homeownership
opportunities for borrowers who are underserved, or not
served, by the existing conventional mortgage marketplace.
The legislation makes critical improvements to the statutory
scheme of the NHA, and these improvements have also been
proposed by the Administration. Nonetheless, the
Administration has a number of significant concerns with H.R.
1852, which the Administration looks forward to addressing
with Congress as the bill moves through the legislative
process.
As proposed by the Administration, the legislation
authorizes an increase in FHA loan limits from $362,000 to
$417,000 or 100 percent of the Federal Home Loan Mortgage
Corporation (Freddie Mac) conforming loan limit in high-cost
areas, and from $200,000 to $271,000 in lower-cost areas.
These changes are needed to adapt the program to increasing
home prices. The Administration strongly opposes amendments
that would authorize FHA guarantees of loans greater than the
conforming loan limit as the program should remain targeted
to traditionally underserved homebuyers, such as low- and
moderate-income families.
Additionally, the legislation authorizes FHA to utilize
risk-based premium pricing to more appropriately match
premiums to borrower risk, based on measures such as the size
and source of their downpayment and their credit scores.
Consistent with current mortgage lending practices, the
legislation includes the option to extend the maximum
mortgage term from 35 to 40 years. Finally, with respect to
FHA's Home Equity Conversion Mortgage (HECM) Program, the
legislation removes the statutory volume cap on the number of
reverse mortgages that may be insured by FHA, while
permitting HECMs for use in condominium units and purchase
transactions. Each of these improvements enables FHA to serve
a larger number of targeted homebuyers, in more areas of the
nation, than are being served under the present program.
While the Administration strongly supports Federal
assistance to individuals and families that lack the means to
afford adequate housing, the Administration strongly opposes
the establishment of a new Affordable Housing Grant Fund
linked to increased FHA receipts. FHA receipts are already
credited toward HUD appropriations and a new program that
attempts to divert this revenue would reduce resources
available for other HUD programs that assist low income
families and individuals. Furthermore, tying financing for
the fund to FHA receipts would be counter-productive since
FHA receipts annually fluctuate based on housing market
conditions and bear little relation to any potential
program funding needs. Many of the proposal's details are
also undefined and unclear; therefore, the specifics may
raise additional policy concerns.
The Administration strongly supports flexible downpayment
options, but opposes a provision in H.R. 1852 that limits
their benefits to first-time homebuyers. Such a limitation
would hinder the ability of some current homeowners to
refinance into an FHA-insured loan. By removing this
limitation, FHA could help provide existing homeowners with
additional flexibility in managing the mortgage debt.
The Administration also has concerns that H.R. 1852 does
not provide FHA with the necessary flexibility to implement
risk-based pricing, thereby limiting consumer choice as well
as FHA's ability to help additional borrowers. H.R. 1852
fails to raise the statutory cap on annual premiums from 55
to 200 basis points, nor does it permit caps on upfront and
annual premium combinations that would allow FHA to offer
borrowers a variety of premium structures. In addition, the
provision for mandatory refund of ``excess'' premium to
borrowers with FICO credit scores below 560 whose loans
survive more than five years undercuts the insurance
principle on which FHA is based. This provision also hampers
FHA's ability to serve a greater number of the borrowers this
provision is purported to benefit. Because of these
provisions, H.R. 1852 would lower receipts by approximately
$75 million relative to the President's budget.
Generally, the Administration supports the provision in
H.R. 1852 that permits an increase in mortgage insurance
premiums if HUD determines that, absent such an increase, the
insurance of additional mortgages would require the
appropriation of new budget authority to cover the costs of
such insurance. However, the requirement to do so by
rulemaking is process-laden and onerous and would
significantly delay and hamper HUD's ability to respond to a
changing market. The Administration will work with Congress
to establish a process that efficiently and effectively
allows HUD to increase mortgage insurance premiums as needed.
The Administration also has concerns with the two percent
limitation on HECM loan origination fees proposed in the
legislation. Although the Administration applauds the attempt
to protect senior citizens from potentially abusive and
predatory lending practices, any such limitations should be
flexible enough to respond to a changing market. Accordingly
the Administration believes that such limitations should be
set by the FHA through Federal Register notice or other
appropriate vehicle.
In addition, the Administration is concerned that the Act
revises certain recently enacted asset disposition reforms
for FHA multifamily programs. This would reduce receipts by
nearly $40 million. The Administration is also concerned
about a provision that would make it possible for
correspondent lenders to use FHA without meeting audit and
net worth requirements, which could allow participation by
brokers who are inadequately capitalized or have internal
control difficulties.
The Administration remains committed to modernizing and
reforming FHA, and looks forward to continuing to work with
Congress to ensure that concerns are addressed and that the
necessary reforms are part of any final legislation.
Mr. Speaker, I reserve the balance of my time.
Ms. MATSUI. Mr. Speaker, I yield myself such time as I may consume.
Before yielding to my next speaker, I would like to point out that
the bill directs surplus funds to an affordable housing fund. This is
an appropriate
[[Page H10443]]
use of any net FHA funds. The surplus funds are directed to a source
that is consistent with the mission of this legislation: to help
Americans buy homes through federally backed means.
However, for those Members who do not support this fund, I want to
point out that there is an amendment made in order to strike the fund.
All Members of this House will have an opportunity to vote on this
important issue.
With that, Mr. Speaker, I yield 4 minutes to the gentlewoman from
Ohio (Ms. Sutton), a member of the Rules Committee.
Ms. SUTTON. Mr. Speaker, I thank the gentlewoman for her leadership
on this issue and on this rule.
Mr. Speaker, I rise in favor of this rule and in strong support of
the underlying legislation, the Expanding American Homeownership Act.
Owning a home in this country is called the American Dream for many
reasons: the pride of ownership, a sense of responsibility, the feeling
of settling down and belonging to a community and a neighborhood. But
the American Dream is in peril for many families in this country as
foreclosures rise and dreams shatter.
I am sorry to report, Mr. Speaker, that in my home State of Ohio, we
have the Nation's highest rate of mortgages that are seriously
delinquent or in the foreclosure process. In April of this year, Ohio
had nearly 12,000 default notices, auction sale notifications, and bank
repositions. Sadly, one in ten Ohio homeowners with a mortgage is at
least a month behind in payments and one in four with a subprime loan
is delinquent or in foreclosure.
These staggering statistics are not just numbers. They are families
and individuals whose American Dream is quickly becoming a nightmare. I
have talked with many hardworking, proud families who are struggling to
pay their mortgages and afford health insurance, struggling to put food
on the table and pay for their children's college education. They are
working hard and they are playing by the rules, but nonetheless the
American Dream has moved out of their reach.
The homeownership crisis is part of a larger problem for our Nation
where policies and laws have not worked for our low- and middle-class
families the way that they should. This is unacceptable for my
constituents, and it should be unacceptable for a Nation built by
working men and women that prides itself on ownership, responsibility
and fairness.
Mr. Speaker, the problems in the housing market are not new, but they
have become what they are because of a lack of action and leadership
from prior Congresses and this administration. The lack of oversight
has led to the abuse of a mortgage system by unscrupulous lenders and
others looking for easy profit by preying upon those who are most
vulnerable. And it is wholly unacceptable that a system that should be
an avenue to homeownership has instead become a path to heartache for
far too many families.
Today by passing the Expanding America Homeownership Act, we take a
bold step forward on what is going to be a long road to fix this broken
system.
{time} 1045
H.R. 1852 raises loan limits, helps reduce the burden for high-risk
borrowers, expands counseling for home buyers, and provides new
ownership incentives for low-income families. And these are very
important and positive measures.
This is a demonstration of our commitment to restore the American
Dream, but we also understand that there is no easy fix for this issue.
In coming days, I plan to introduce legislation that will bring
together many interests and groups involved in foreclosure and mortgage
lending crisis so that we can continue to act to improve this
situation. I hope that, working together, we will be able to quickly
offer comprehensive and meaningful solutions to move forward.
A similar effort has been made in Ohio spurred by our new Governor,
Ted Strickland. And just recently, they came back with some very
important recommendations that will hopefully make a meaningful impact
in the State. But we here in Congress at the Federal level need to do
our part.
Mr. Speaker, never again do I want to have to hear that a family has
lost their home simply because our laws and regulations have worked
against them.
I urge passage of this rule and the underlying legislation.
Mr. SESSIONS. Mr. Speaker, at this time, I would like to yield 5
minutes to the gentlewoman from Illinois (Mrs. Biggert).
Mrs. BIGGERT. I thank the gentleman for yielding.
Mr. Speaker, today I rise in opposition to this rule governing the
consideration of H.R. 1852, the Expanding American Homeownership Act of
2007.
I had hoped that the committee would see the wisdom in providing an
open rule to this important legislation; and in the absence of an open
rule, that it would at least make in order those amendments that the
Members took the time and effort to draft, including one of my own
amendments. Unfortunately, only some of the amendments filed with the
Rules Committee were made in order.
While I'm pleased that some of these amendments made in order are
Republican amendments, other amendments which were offered and debated
during our committee markup of this bill were not made in order. These
amendments deserve to be debated and given a fair hearing.
Mr. Speaker, last year FHA's modernization bill, which passed the
House by a vote of 415-7, garnered broad bipartisan support. This
year's bill does not have that kind of support. I am pleased that the
majority has edged closer to last year's bipartisan bill since the
introduction of the new bill under consideration today.
As I pointed out during our committee hearing and markup on this
bill, the bill originally excluded homeowners seeking to refinance from
benefiting from a modernized FHA. The bill will now assist more
homeowners, perhaps some seeking to refinance a bad subprime loan, but
still not as many as last year's bill.
I continue to object to provisions that do not fully allow for risk-
based pricing. Again, witnesses during our committee hearings said this
would result in FHA serving fewer, not more, American borrowers. I also
remain opposed to the provision that siphons money away from FHA to
fund a brand-new government program, another trust fund, to build more
affordable housing. While this is a very important issue, affordable
housing, what we need here is to have FHA money to help those that are
in trouble, facing foreclosure, or those first-time borrowers who would
not be able to find a good mechanism to find a mortgage.
During committee deliberations, we were given the opportunity to
debate and consider a variety of issues pertaining to this bill.
Members on our side of the aisle had hoped that all Members, not just
those on the Financial Services Committee, would be given the same
opportunity to debate important issues on the House floor.
Republicans support many aspects of this bill, H.R. 1852; but I think
we all deserve the right to participate in the amendment process,
whether as a member of the committee of jurisdiction, or as a Member of
the U.S. House of Representatives. Only through an open rule is that
possible. For this reason, I rise in opposition to the rule being
considered today and urge my colleagues to vote ``no'' on this rule.
Ms. MATSUI. Mr. Speaker, I yield myself such time as I may consume to
make a comment before yielding to my next speaker.
I would like to point out that seven amendments were made in order.
Two of the minority amendments offered were redundant changes, so one
of those was made in order. And, finally, an amendment in the nature of
a substitute offered by Mrs. Biggert was made in order. We are
providing ample opportunity for debate and for Members to vote on the
provisions of the bill.
With that, Mr. Speaker, I yield 3 minutes to the gentleman from
Oregon (Mr. Blumenauer).
Mr. BLUMENAUER. I appreciate the gentlewoman's courtesy in permitting
me to speak on this bill and appreciate her leadership, and
particularly emphasizing the fact that the minority has the opportunity
for a substitute to be offered up. So the House will have an
opportunity to weigh the different approaches to determine what is
truly in the best interests of American homeowners.
[[Page H10444]]
I welcome this legislation today. I support the rule, and I support
the underlying legislation. But I hope that this will be just the start
of on-going progress for dealing with what is truly a housing crisis
that is enveloping this country.
While it's pleasant to read now that Alan Greenspan, as he's
attempting to protect his role in history, now agrees that there were
probably some mistakes that were made, not yet acknowledging the
failure on the part of the Fed to step forward and deal meaningfully,
using the powers that they had in the housing market. Today we see the
consequences of that failure, of this Congress, a failure of being able
to meaningfully deal with the protection of American homeowners.
Foreclosures are mounting by the day, but we're only seeing the tip
of the iceberg, because literally tens of thousands of people every
week are going to be facing a situation where adjustable rate mortgages
in the months ahead are going to be exploding in much higher rates,
where people are going to be paying $200, $300, $400, $500 a month, or
more, higher and be trapped into these unfair subprime loans. Where
there is a clear pattern of abuse of lower income, less sophisticated
buyers, it's time for us to put on the table more comprehensive
approaches.
Isn't it time to reconsider the draconian bankruptcy legislation that
this House passed a few years ago? Maybe it is time to treat the
homeowner, dealing with the most valuable asset most families have,
their home, the same way that a business person who speculated in
purchasing homes for investment purposes would be treated in
bankruptcy. The speculative business person can readjust mortgage
terms; they can negotiate interest rates in the amount of the loan.
That is denied to homeowners.
Maybe it's time to consider some consumer protections. If you buy a
$40 toaster that explodes, there is a Federal agency that will protect
you. But if you buy a financial instrument that has a one-in-four
chance of exploding in the face of the buyer, putting at risk their
number one asset, there isn't any similar protections.
While I appreciate the legislation that's coming forward, I am
hopeful that it is just the beginning of dealing with this ongoing
problem.
Mr. SESSIONS. Mr. Speaker, I was waiting for one additional speaker,
and that gentleman has not showed up at this time. I would like to
inquire of the gentlewoman if she has additional speakers, or where we
may stand. If I could quickly engage the gentlewoman.
Ms. MATSUI. Mr. Speaker, I am waiting for an additional speaker.
Mr. SESSIONS. The gentlewoman is waiting for an additional speaker,
and I appreciate that very, very much.
Mr. Speaker, you know, we are here this morning, almost 11 o'clock in
Washington, D.C. I don't know of much else we've got going here on the
floor today. I think we're going to have four suspensions in addition
to this bill, and yet last night the Rules Committee, our friends in
the new Democrat majority, decided that they would shut down debate by
having this rule without it being an open rule, shut out a number of
amendments and Members who would choose to come down and debate things
today. And so I'm disappointed that, in a day where really not much
else is going on, that we could not include the full discussion and
take this day to talk about affordable housing and where the ideas are
that each and every Member might have on how we're going to increase
homeownership and protect these homeowners.
I find it interesting, however, with some of the speakers that we've
had today, that just a few years ago we were, with full knowledge of
this United States Congress, very pleased that homeownership was
increasing all across America and that credit was being extended to a
number of people, including lots of families who would have an
opportunity to finally own their own home. And now we find out today
that, in fact, it's a lot of people who are to blame, who are these
greedy people who were the lenders, who were trying to get people and
bring them in to buy houses when, in fact, it was the national will. It
was a good thing that they would have, virtually at no cost down, an
opportunity to come and be in a house. We heard testimony where people
really could get in houses for cheaper than they could living in an
apartment. So millions of Americans went and did that. And they
willingly signed on the line, yes, I will take this low-cost loan right
now, and in 5 years I will have to go to a market-based rate to borrow
the money.
This wasn't a mistake. This wasn't somebody being greedy. This was
someone who was out offering an opportunity. And as all of us would
have to predict the future, we don't know what the future would be, but
it got people in homes, and now we do have some problems. And dealing
effectively with the problem is, I think, what we should be remembered
for, not looking back and saying what a bad idea it was to make sure
that millions of families could get in their own homes.
So I respectfully disagree with those that come to the floor here
today to argue about greed and all these people who took advantage of
these poor and low-income homeowners. I think it was a good thing. I'm
sorry it has not worked out in every single case. But guessing what
something is going to be like in 5 years means that you have a chance
to plan and be prepared for it. And so now we will be judged on how
well we do to make sure that we lessen the activity of the number of
people who have to bail out of their houses because they can't afford
them.
Mr. Speaker, I reserve the balance of my time.
Ms. MATSUI. Mr. Speaker, my remaining speakers are not here, so I am
prepared to close if the gentleman from Texas is prepared to close.
Mr. SESSIONS. Mr. Speaker, I had anticipated and hoped that the
gentleman from Georgia (Mr. Price) might be here. I have been notified
that he is in a meeting with constituents at this time.
One of the amendments which Dr. Price brought to the Rules Committee
yesterday, which the Rules Committee rejected on a party-line basis,
was part of really the debate and discussion that I think needs to take
place as we talk about taxpayer money being involved with housing in
this country. And the amendment which was rejected by the new Democrat
majority universally across the line, every single Democrat said, no,
they did not want to hear the debate on this, and it is as follows: the
amendment said that it would require that any individual or household
receiving money from the affordable housing fund must present
verification of legal residency by a secure identification document.
Mr. Speaker, let's be forthright about this. We have had discussion
after discussion, debate after debate about health care, about public
housing, about housing funds, of virtually every single topic that we
get into here on the floor of the House of Representatives where we
believe, the Republican Party believes, that people who are seeking
assistance and help from funds, whether it be taxpayers or public
systems like this that do utilize the attributes of the government,
that there should be a verification that somebody is in this country
legally and has legal status.
Mr. Speaker, repeatedly this new Democrat majority, whether it's for
health care or whether it's now for this new housing fund, they do not
want to require that someone even has to present verification of who
they are. And we disagree with that. And I am sorry that the Rules
Committee made a determination and the Democratic Party decided that
they do not want to have to have anyone present verification of who
they are or that they are in this country legally.
{time} 1100
We disagree with that. I am sorry that the Rules Committee did not
allow that in order for the gentleman, Mr. Price, to be able to argue
that as part of the debate today.
So, Mr. Speaker, I will be voting ``no.'' I will be voting ``no'' on
this rule because I believe that what this new Democrat majority did
was to shut down debate even in a day when we have lots of time to get
the best ideas on the floor and to make sure that every single Member
can be heard from.
Mr. Speaker, I yield back the balance of my time.
Ms. MATSUI. Mr. Speaker, before I close, I just want to make a
comment that H.R. 1852 already has strong identification requirements
for those applying for FHA-backed mortgage insurance.
[[Page H10445]]
With that, Mr. Speaker, we know that our housing market is in severe
distress. We must ensure that subprime mortgage lending is not putting
our residents at risk. Subprime mortgages can be a very useful tool
enabling those with imperfect credit to qualify to buy a home. Reining
in predatory lending practices will help our families keep those homes
that they have worked so hard to buy. The Expanding American
Homeownership Act will ensure that FHA has the tools it needs to get
more home buyers into good loans.
This bill will bring the FHA regulations up to date. It will provide
the agency with the ability and resources to offer a broader diversity
of loans to meet the needs of the current market. This is an important
bill that will give more of our constituents access to solid federally
backed loans. That is a kind of stable financing that homeowners need
to get through the rocky times our real estate market is weathering.
The Financial Services Committee has worked very hard to get this
bill to the floor. I hope that we can keep it moving forward. I hope
that my colleagues will join me and show strong bipartisan support for
the rule before us and the underlying bill.
Mr. Speaker, I yield back the balance of my time, and I move the
previous question on the resolution.
The SPEAKER pro tempore (Mr. Holden). The question is on ordering the
previous question.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. SESSIONS. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this question will be postponed.
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