[Congressional Record Volume 153, Number 177 (Thursday, November 15, 2007)]
[House]
[Pages H14018-H14037]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT OF 2007
The SPEAKER pro tempore. Pursuant to House Resolution 825 and rule
XVIII, the Chair declares the House in the Committee of the Whole House
on the State of the Union for the further consideration of the bill,
H.R. 3915.
{time} 1519
In the Committee of the Whole
Accordingly, the House resolved itself into the Committee of the
Whole House on the State of the Union for the further consideration of
the bill (H.R. 3915) to amend the Truth in Lending Act to reform
consumer mortgage practices and provide accountability for such
practices, to establish licensing and registration requirements for
residential mortgage originators, to provide certain minimum standards
for consumer mortgage loans, and for
[[Page H14019]]
other purposes, with Mrs. Tauscher (Acting Chairman) in the chair.
The Clerk read the title of the bill.
The Acting CHAIRMAN. When the Committee of the Whole rose earlier
today, a request for a recorded vote on amendment No. 16 printed in
House Report 110-450 by the gentleman from Georgia (Mr. Price) had been
postponed.
Amendment No. 5 Offered by Mr. Watt
The Acting CHAIRMAN. It is now in order to consider amendment No. 5
printed in House Report 110-450.
Mr. WATT. Madam Chairman, I offer an amendment.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 5 offered by Mr. Watt:
Page 60, line 3, strike ``or'' and insert ``and''.
The Acting CHAIRMAN. Pursuant to House Resolution 825, the gentleman
from North Carolina (Mr. Watt) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from North Carolina.
Mr. WATT. Madam Chairman, this amendment, on its face, is very, very
simple, although I expect there will be some controversy about it. The
amendment simply changes one word. The word is ``or.'' We change the
word to ``and'' in the bill instead. You would think that would be
noncontroversial, but let me get into the effect of that.
Currently, if an assignee of a mortgage has policies and procedures
not to buy subprime loans that do not meet safe harbor provisions that
are in this bill, or if the assignee is willing to cure such loans, the
assignee has no liability until you get to a foreclosure situation.
That's very complicated, I understand; but that's what the bill
provides.
The effect of the amendment would be to require the assignee to have
policies and procedures in place and do certain things and be willing
to cure the loan to avoid being liable for rescission.
That's important because if you give the option to an assignee of
either curing or having policies and practices that are responsible in
place, an assignee can then just treat the cure as a cost of doing
business, and it becomes an ineffective choice. But if they are
obligated to both have the policies and procedures and protections in
place, and be willing to cure the loan, then they are not going to
exercise the option to do the least onerous one of those things.
It is a simple provision, a simple change, although I understand the
arguments against it.
And I will, having created the framework and explained what we are
trying to do, reserve the balance of my time.
Mr. BACHUS. Madam Chairman, I rise to claim the time in opposition.
The Acting CHAIRMAN. The gentleman from Alabama is recognized for 5
minutes.
Mr. BACHUS. Madam Chairman, as has been discussed both in committee
and on the floor of the House this morning, this legislation is a
result of Democrats joining with Republicans. Not all. I mean, many
Republicans are opposed to this legislation.
But after 2 years of trying to address the subprime lending crisis,
many Members of this body came together to craft legislation. That
legislation is not perfect, nor will it be. I have concerns about it.
My Members, many of them, are particularly concerned about the
liability provisions. And this amendment fundamentally unravels, at
least a consensus that some of us have reached with the other part by
gutting the safe harbor contained in the legislation that is critical
to the functioning of the secondary mortgage market. Without liquidity
provided by the secondary market, the homeownership dreams of millions
of Americans, particularly low- and middle-income Americans, will
simply not be realized.
If this amendment is enacted, the safe harbor for the secondary
market would disappear because notwithstanding the satisfaction of the
statutory elements of the safe harbor, securitizers would be required
to cure any violations of the bill's minimum standards by a creditor.
This would effectively eliminate any benefit from the conduct of due
diligence by secondary market participants that this bill is intended
to promote. Deprived of that safe harbor, securitizers would simply
stop purchasing loans. The effect on the availability of mortgage
credit and on the housing market across the country would be
devastating.
Madam Chairman, I reserve the balance of my time.
Mr. WATT. Madam Chairman, I reserve the balance of my time.
Mr. BACHUS. Madam Chairman, I yield 2 minutes to the gentleman from
Texas (Mr. Hensarling).
Mr. HENSARLING. I thank the gentleman for yielding. I too share great
concern about this amendment. I've had concern about assignee liability
in this legislation to begin with. But I at least recognized the
benefit of having a so-called safe harbor provision.
As I looked at the safe harbor, I was somewhat fearful that there
were still some dangerous reefs that were lurking beneath the waves.
I'm fearful if this amendment is passed not only will those dangerous
reefs be present, but any harbor will have disappeared as well.
Again, we need to step back and decide, on this entire issue of
assignee liability, when we look at all the resets that are due to
happen in the market, will this legislation add liquidity to the
market? Will it subtract liquidity from the market?
For people who are trying to keep their homes, over and above
whatever the market is providing, are the actions of us in this body
going to exacerbate the situation and dry up even more liquidity?
I think this is a major amendment, that whatever balance was struck
in this area completely removes that balance. And I think it will
provide for an explosion of liability exposure that could be very, very
damaging to the secondary market.
I've heard the distinguished chairman of the committee on a couple of
occasions refer to Chairman Bernanke's comments on the subject. And I'm
not sure I've seen where he's actually advocated assignee liability,
although he has acknowledged that, under certain circumstances, in a
very limited situation, it might be helpful.
But I also saw in his testimony before our committee, if I can quote
from the chairman: ``We've seen from different States different
experiences and there have been examples where assignee liability
provisions have driven lenders out of the State.''
Let's not drive them out of the Nation. Let's reject this amendment.
{time} 1530
Mr. WATT. Madam Chairman, I reserve the balance of my time.
Mr. BACHUS. May I inquire as to how much time is remaining?
The Acting CHAIRMAN. The gentleman from Alabama has 1 minute
remaining. The gentleman from North Carolina has 2\1/2\ minutes
remaining.
Mr. BACHUS. Madam Chairman, if this amendment is adopted, it's going
to seriously damage this bill. I urge all of my colleagues to resist
this amendment.
Madam Chairman, I yield the remaining time to the gentleman from
North Carolina.
Mr. McHENRY. I thank the ranking member.
In brief, my colleagues must understand the simplicity of this
amendment. What it would say is the secondary market has to give a road
map for those who are facing foreclosure for them to get out of their
mortgage. In essence, what it says is, if you want out of your
mortgage, here's the road map to do it.
I think this would be a destructive influence on the market. It would
further undermine the secondary market and the liquidity in the
marketplace and would further harm home ownership. I urge my colleagues
to oppose it.
Mr. WATT. I yield myself the balance of the time, and I assure you, I
won't use it.
The arguments that have been made are absolutely correct with respect
to 99 \44/100\ percent of the people operating in the market. These are
not bad people. But this bill was drawn to get at that small percentage
of the market that is out of control. And if you give that small
percentage of the market the option of either doing some paperwork or
curing, as opposed to having to do both of those things, I guarantee
you they will take the option that is most cost beneficial to them. And
[[Page H14020]]
that's what we've been trying to stop, those people in the marketplace
who are out of control. And that's what this amendment is designed to
do.
For the rest of the market, it really won't have any impact at all
because they're going to put procedures in place and they are going to
be willing to cure, if that's the last resort.
So, I think, unfortunately, there are players in this market that
have been out of control. This bill is designed to deal with them, and
this amendment would help disincentivize them being out of control
without harming anybody else. I would encourage my colleagues to
support it.
Madam Chairman, I yield back the balance of my time.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentleman from North Carolina (Mr. Watt).
The amendment was rejected.
Amendment No. 10 offered by Mr. Putnam
The Acting CHAIRMAN. It is now in order to consider amendment No. 10
printed in House Report 110-450.
Mr. PUTNAM. Madam Chairman, I offer an amendment.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 10 offered by Mr. Putnam:
Page 79, after line 20, insert the following new section
(and amend the table of contents accordingly):
SEC. 214. REPORT BY THE GAO.
(a) Report Required.--The Comptroller General shall conduct
a study to determine the effects the enactment of this Act
will have on the availability and affordability of credit for
homebuyers and mortgage lending, including the effect--
(1) on the mortgage market for mortgages that are not
within the safe harbor provided in the amendments made by
this title;
(2) on the ability of prospective homebuyers to obtain
financing;
(3) on the ability of homeowners facing resets or
adjustments to refinance--for example, do they have fewer
refinancing options due to the unavailability of certain loan
products that were available before the enactment of this
Act;
(4) on minorities' ability to access affordable credit
compared with other prospective borrowers;
(5) on home sales and construction;
(6) of extending the rescission right, if any, on
adjustable rate loans and its impact on litigation;
(7) of State foreclosure laws and, if any, an investor's
ability to transfer a property after foreclosure;
(8) of expanding the existing provisions of the Home
Ownership and Equity Protection Act of 1994;
(9) of prohibiting prepayment penalties on high-cost
mortgages; and
(10) of establishing counseling services under the
Department of Housing and Urban Development and offered
through the Office of Housing Counseling.
(b) Report.--Before the end of the 1-year period beginning
on the date of the enactment of this Act, the Comptroller
General shall submit a report to the Congress containing the
findings and conclusions of the Comptroller General with
respect to the study conducted pursuant to subsection (a).
The Acting CHAIRMAN. Pursuant to House Resolution 825, the gentleman
from Florida (Mr. Putnam) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Florida.
Mr. PUTNAM. Madam Chairman, I have an amendment today that would
direct the GAO to conduct a study to determine the effects the
enactment of H.R. 3915 will have on the availability and affordability
of credit for homebuyers and mortgage lending, and then submit a report
to Congress containing the findings and conclusions within 1 year of
enactment.
With that, I would yield to my chairman.
Mr. FRANK of Massachusetts. Madam Chairman, on the question of this
GAO report, I believe it is a reasonable request because I am confident
it will come back in support of our bill. And I think it is entirely
reasonable to ask them to start, without waiting for passage of the
whole bill in both Houses.
Mr. PUTNAM. So the gentleman would agree that we could join together
and request the study even prior to final passage of the bill?
Mr. FRANK of Massachusetts. Yes. Well, actually, final passage of the
bill is going to, I hope, happen in a couple of hours in the House; but
before it gets to the Senate, without waiting for the Senate, yes.
Mr. PUTNAM. I thank the gentleman. And I look forward to joining him
on that request to the GAO.
Madam Chairman, I yield back the balance of my time.
Mr. FRANK of Massachusetts. Madam Chairman, I rise in opposition.
The Acting CHAIRMAN. The gentleman is recognized for 5 minutes.
Mr. FRANK of Massachusetts. And I will yield 2 minutes to the
gentlewoman from California (Ms. Lee).
Ms. LEE. Let me thank Chairman Frank, Chairman Watt, Congresswoman
Waters and all the members of the Financial Services Committee for
their leadership and commitment to help Americans who are struggling.
And we all know, quite frankly, many, many people are struggling to
keep their homes as this mortgage crisis continues to claim victims.
This legislation adds a very important piece of what we're trying to
do in terms of the protections, including limiting prepayment
penalties, requiring that loans be affordable, and that refinancing
provide a net benefit to borrowers. However, I have some concerns about
H.R. 3915 that I hope will be addressed as it moves through the
process, and I would like to just mention a few of those concerns
because I think they're very important to hear. They were forwarded by
ACORN, the Center for Responsible Lending, the Consumer Federation of
America, Leadership Conference on Civil Rights, the NAACP, Ohio
Attorney General Marc Dann, and Opportunity Finance Network. They
raised concerns with regard to these issues:
One, the ability to pay. They believe the standard does not apply to
all loans, it undercuts agency guidelines, and will not change the
markets;
Secondly, the prohibition on steering is weak and upselling of loan
rates still possible. Homeowners cannot prevent foreclosure. Some feel,
and I know that this is being addressed today, that the preemption is
too broad.
So, I know that, as this bill moves through the process, we will look
at it. It is a starting point. I urge our colleagues to make sure that
it does become stronger because this American Dream of home ownership
is, quite frankly, turning to a nightmare for so many people.
I want to thank Chairman Frank for his leadership and for really
trying to put together a bipartisan bill. And also, with regard to the
Putnam amendment, the reporting, I think, makes sense.
November 15, 2007.
Hon. Barney Frank,
Chairman, House Financial Services Committee.
Hon. Spencer Bachus,
Ranking Member,
House Financial Services Committee.
Dear Chairman Frank and Ranking Member Bachus: We, the
undersigned organizations, write to present our views on H.R.
3915, the Mortgage Reform and Anti-Predatory Lending Act of
2007. While we greatly appreciate your efforts to reduce
predatory lending and to restore balance to the mortgage
market, we believe this bill requires improvements in the
areas described below in order for the bill to achieve its
goals.
Subprime lending has been a disaster of monumental
proportions, shattering hopes of economic progress for
millions of families and triggering a devastating chain
reaction of losses for communities and businesses. More than
two million families will likely lose their homes as a
result, and for most families--especially African-Americans
and Latinos--their home equity represents the greatest share
of their family wealth. Wall Street's demand for risky loans
with higher interest rates played a key role in encouraging
reckless lending, and brokers delivered whatever loans they
could sell.
When H.R. 3915 was introduced, we applauded many of its
strongest provisions, such as the originator duty of care and
anti-steering rules, the bans on yield spread premiums,
prepayment penalties, mandatory arbitration, and single
premium credit insurance, and the special protections for
extremely high-cost mortgages and for renters.
It is crucial to retain those strong provisions, to improve
the remedies and market incentives in the bill, and to avoid
preemption of state laws related to these issues.
Unfortunately, as the bill has passed through the legislative
process, several of the strongest provisions (such as the
duty of case and ban on yield-spread premiums) have been
weakened, the remedies have been weakened rather than
strengthened, and a preemption clause has been added that
would eliminate important state claims that help homeowners
protect the homes.
Our concerns about the bill fall into four main areas:
``Ability to Pay'' Standard Does Not Apply to All Loans,
Undercuts Agency Guidance, and Will Not Change Market: The
bill requires no ability to pay standards for approximately
90% of the current mortgage market and creates an
irrebuttable presumption that any loan below 8.25% is
affordable.
[[Page H14021]]
This immunity undercuts the existing joint agency guidance
that currently sets ability to pay standards for risky loans,
especially loans such as payment options ARMs, the majority
of which are ``qualified mortgages.'' Moody's estimates that
monthly payments on $220 billion of POARMs will reset--in
most cases to much higher monthly payments--between 2009 and
2011. Additionally, because there is no requirement that
secondary market purchasers conduct due diligence, we fear
that the secondary market will continue to purchase abusive
loans and choose to absorb the expense of any cures as part
of the cost of doing business.
Prohibition on Steering is Weak and Upselling of Loan Rate
Still Possible: Rather than prohibiting yield spread
premiums, as was originally intended, the bill as amended now
essentially authorizes such practices as long as there is
disclosure to the consumer. Research shows that disclosure
has virtually no effect on preventing abusive lending
practices such as steering. We also fear that incorporating
Title II into the Title I standards significantly weakens the
entire structure, and the permitted damages are insufficient
to change the market. Moreover, the damages for violation of
the steering provision are too low to change broker behavior.
Homeowners Cannot Prevent Foreclosure: As currently
drafted, homeowners have no rights against the actual holder
of the loan (in other words, against the entity that will
foreclose on them) until a foreclosure has already begun. At
that point, not only has the family been traumatized, but the
damage to the homeowner's credit is done, which will likely
prevent the use of the rescission remedy. Moreover, even in
foreclosure, it is not fully clear that homeowners will be
able to reach the holder in the vast majority of situations.
Preemption is Too Broad: Although we appreciate that there
is not preemption for the entire bill, the broad preemption
in the area of assignee liability would wipe out the many
existing state laws, such as UDAP statutes [and UCC
protections?], that provide remedies against assignees. Since
most loans are sold soon after origination, and since so many
originators and creditors are thinly capitalized (assuming
they even are still in business), many homeowners will be
left without any remedy for unaffordable loans.
Ultimately, unless legislation fundamentally changes the
incentive structure both for Wall Street and for mortgage
originators, predatory lending is likely to continue in one
form or another.
We look forward to continuing to work with the Congress as
this bill moves through the legislative process.
Sincerely,
ACORN, CDFI Coalition, Center for Responsible Lending,
Consumer Federation of America, Leadership Conference
on Civil Rights, NAACP, Ohio Attorney General Marc
Dann, Opportunity Finance Network.
Mr. FRANK of Massachusetts. I yield myself 1 minute to comment on
what the gentlewoman has said because we've agreed to the gentleman's
amendment, so we're on some other subjects now.
What I would say is this: I would want to stress with regard, for
instance, to ability to pay and jeopardizing the right of the
homeowner, nothing in this bill in any way diminishes State remedies
regarding ability to pay on prime loans. That's the argument, that we
do not deal with the ability to pay on prime loans, et cetera. But the
effect of that is that any remedy a State wants to pursue against the
originator of the loan or the lender remains unimpeded. So we did want
to make that point.
And just to say also, with regard to the incentive to charge more,
the gentleman from North Carolina (Mr. Miller) and I discussed that. It
will be very clear to anybody by the time this bill becomes law that
there is no possibility of anyone being given higher compensation in
return for getting people into a more expensive loan.
As to preemption, there will be some. There are people who want none
at all. I do not think you could have a secondary market if there were
no preemption. But we have already, in the manager's amendment, defined
it, and I think reassured people that, for instance, fraud, deception,
et cetera, that causes arising out of that will not be preempted.
I now yield the remaining time to the gentlewoman from Texas (Ms.
Jackson-Lee).
Ms. JACKSON-LEE of Texas. Let me thank the distinguished Chair for
yielding the time. And let me acknowledge in this very short time the
importance of this legislation, and particularly, its importance to my
community in Houston.
The most important point that I would like to emphasize is the issue
of the standards being put in place for mortgage brokers. I happen to
be very happy that standards are preempting State standards in this
instance, because Texas needs that kind of regulation.
Let me also take note of the fact that I know Mr. Watt was intending
to bring forward an amendment regarding reverse mortgages, and may
submit it or not. But knowing that I just recently dealt with a
constituent, an elderly constituent who suffered from a reverse
mortgage loan, she utilized the reverse mortgage, and now she can't
find any of those that provided that loan and cannot afford to pay it
back and she is about to lose her house. So, with the numbers of
homeless in our community and with the numbers of homeless across
America, the fact that we are talking about creating a better housing
market and also creating jobs as we go forward, this is a constructive
bill.
I would ask my colleagues to consider the fact that affordable
housing only comes from a regulated and positive market. I like the
underlying amendment, but I think it is important to set standards for
mortgage brokers and to ensure that there is consumer protection in
housing for those most vulnerable.
And I appreciate, in particular, that this bill has created a Office
of Housing Counseling to help new homeowners. And might I, as I close,
Madam Chairman, just indicate that I support the concerns of ACORN and
the NAACP and look forward to those issues being corrected as we make
our way to conference.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentleman from Florida (Mr. Putnam).
The amendment was agreed to.
Amendment No. 6 Offered by Mr. Watt
The Acting CHAIRMAN. It is now in order to consider amendment No. 6
printed in House Report 110-450.
Mr. WATT. Madam Chairman, I offer an amendment.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 6 offered by Mr. Watt:
Page 52, strike lines 13 and 14 and insert the following
new subparagraph:
``(B) if such loan is--
``(i) a qualified safe harbor mortgage; or
``(ii) a nontraditional mortgage.''.
Page 56, after line 3, insert the following new
subparagraph:
``(D) Nontraditional mortgage.--The term `nontraditional
mortgage' means any residential mortgage loan that allows a
borrower to defer payment of principal or interest.''.
The Acting CHAIRMAN. Pursuant to House Resolution 825, the gentleman
from North Carolina (Mr. Watt) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from North Carolina.
Mr. WATT. Madam Chair, you may not have to recognize anybody in
opposition to this amendment because I plan to offer it and then
withdraw it. But I think I would be remiss not to discuss the issue
because of two reasons: Number one, it needs to be discussed because of
the very difficult, delicate balance that the Chair has been able to
walk to get us to this point; and number two, to illustrate once again
that when you allow good things to happen in the marketplace, some
people in the marketplace will abuse them. And trying to get the right
balance to encourage good things to happen in the marketplace and not
discourage that from happening opens up, sometimes, the possibility
that people who are not well intentioned will engage in activities that
need to be prevented. And this is the classic case of that.
Basically, the bill now presumes that we meet the ability to repay a
loan and provide net tangible benefit to a borrower if it is not a
subprime loan. If it is a prime loan in the marketplace right now, that
interest rate is 8.25 percent, so anything below that we presume to be
a good loan.
The market now has done this. They've made available in the market a
loan that defers interest and principal. And that is a good thing for
about 90 percent of the people, maybe even more than that, who have the
ability to do that. I'm the classic example of that. I have a loan in
which I can defer for a period of time both the interest and the
principal on the loan. But if you make that kind of loan available to
somebody who doesn't have the income level that is sufficient
[[Page H14022]]
to pay it, under this bill, they can't even go back and offer proof
that you shouldn't have done that, because we presumed, irrefutably
presumed, that this is a good loan. And so the amendment that I was
trying to craft and offer would have tried to close that. The problem
is, if I close it for the bad people, then I also close it for the good
people.
And so, as an alternative to proceeding with the amendment, I have
convinced the Chair, I hope, that we will continue to work on this
issue and find a way to stop the bad people from making these kinds of
loans or abusing the process without penalizing the people who really
deserve and should have these kinds of loans, which I acknowledged from
the very beginning serve a useful place in the marketplace.
I yield to the chairman of the committee.
Mr. FRANK of Massachusetts. I will say on this, as on a number of
other issues, I will say very sincerely that the gentleman from North
Carolina has persuaded me. I think he has clearly identified an issue
that needs some further work. And as we go forward, ultimately to get
this bill done, I would hope that we can work together on this.
Mr. WATT. And that's all I wish to have acknowledged, and to
demonstrate to everybody who is listening, really, that this has been a
difficult issue, because just about any kind of loan that can be made
in the marketplace, somebody can benefit from.
{time} 1545
But when you have a loan that is particularly subject to being
abused, you have to have rules to constrain it.
Madam Chairman, I ask unanimous consent to withdraw my amendment.
The Acting CHAIRMAN. Without objection, the amendment is withdrawn.
There was no objection.
Amendment No. 7 Offered by Mr. Hensarling
The Acting CHAIRMAN. It is now in order to consider amendment No. 7
printed in House Report 110-450.
Mr. HENSARLING. Madam Chairman, I offer an amendment.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 7 offered by Mr. Hensarling:
Page 73, after line 25, insert the following new section
(and redesignate subsequent sections accordingly):
SEC. 211. LENDER RIGHTS IN THE CONTEXT OF BORROWER DECEPTION.
Section 130 of the Truth in Lending Act is amended by
adding at the end the following new subsection:
``(j) Exemption From Liability and Rescission in Case of
Borrower Fraud or Deception.--In addition to any other remedy
available by law or contract, no creditor, assignee, or
securitizer shall be liable to an obligor under this section,
nor shall it be subject to the right of rescission of any
obligor under 129B, if such obligor, or co-obligor,
knowingly, or willfully furnished material information known
to be false for the purpose of obtaining such residential
mortgage loan.''.
The Acting CHAIRMAN. Pursuant to House Resolution 825, the gentleman
from Texas (Mr. Hensarling) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Texas.
Mr. HENSARLING. Madam Chairman, there are clearly many reasons why
home loans go delinquent. The number one reason, we all know, is the
loss of a job, or other bad luck like long-term illness or disability.
Clearly a phenomenon that has been discussed at quite some length in
committee and on the floor, predatory lending has played a significant
role as well. And many of us have urged very robust antifraud
provisions and increased resources for enforcement.
But I think we also shouldn't underestimate the role of another
phenomenon in home loans becoming delinquent, and I call that predatory
borrowing. People who knowingly take advantage of the system, who game
the system, who give false information in their disclosures and their
verifications. And making the risk-based analyses that lenders use to
determine how much money a person should be responsibly lent makes that
impossible. And there are borrowers, there are borrowers all across
America who have knowingly exaggerated their incomes. They represented
that they used a home for their primary residence, and they didn't.
They acted as straw buyers in property-flipping schemes and used other
scams to qualify for loans that otherwise they would not have qualified
for and loans that they cannot pay back, and to a great extent many
other people are now suffering.
And the result of this predatory borrowing is predictable: higher
foreclosure rates; reduced availability of credit in the market; fewer
homeownership opportunities for those low-income people, those people
who may have a checkered credit past but who are honest, who are
responsible, and who just need a second chance.
So, Madam Chairman, I think this is a very, very modest amendment
today that would simply remove the civil liability of a lender and
cancel the right of rescission for a borrower in instances where the
borrower knowingly lied on their mortgage loan application.
Borrowers who have done this, who have misled lenders into giving
them these loans, should not be able to turn around and then sue the
lender and be able to rescind those loans to compound their deception
with some kind of financial advantage. I hope that most, if not all, of
us would hopefully conclude that that is an absurd and perverse result.
One should not profit from their dishonesty.
I certainly appreciate the chairman's willingness to work with me on
this amendment. I have been led to believe that he supports it. And
although I respect the views of everybody in this committee, I have
clearly said that I do not believe this bill should pass. But if it
does pass, if it does pass, there does need to be some minimal
acknowledgment of the role of personal responsibility and of predatory
borrowing. And I urge the adoption of the amendment.
Madam Chairman, I yield back the balance of my time.
Mr. FRANK of Massachusetts. Madam Chairman, I claim the time in
opposition, not in opposition although there is going to be a secondary
amendment.
The Acting CHAIRMAN. Without objection, the gentleman from
Massachusetts is recognized for 5 minutes.
There was no objection.
Mr. FRANK OF Massachusetts. The gentleman said he had been led to
believe that I would be supportive. I wouldn't want the gentleman to be
in suspense as to whether or not he had been misled.
I know there have been conversations between him and the gentleman
from North Carolina about a secondary amendment. And assuming
everything goes as we have all discussed, he has not been misled. The
gentleman can sleep easily tonight that people told him the truth,
because I am prepared to be supportive of what we have got worked out.
Madam Chairman, I yield back the balance of my time.
Amendment No. 8 Offered by Mr. Watt to Amendment No. 7 Offered by Mr.
Hensarling
Mr. WATT. Madam Chairman, I have a secondary amendment to the
Hensarling amendment at the desk which has been made in order under the
rule.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 8 printed in House Report 110-450 offered by
Mr. Watt to amendment No. 7 printed in House Report 110-450
offered by Mr. Hensarling:
In the amendment, insert ``and with actual knowledge''
after ``willfully''.
The Acting CHAIRMAN. Pursuant to House Resolution 825, the gentleman
from North Carolina (Mr. Watt) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from North Carolina.
Mr. WATT. Madam Chairman, my good friend Mr. Hensarling may be
surprised to know that we actually agree very much with the spirit of
what he is trying to do. And I am not sure that my amendment will
absolutely cure all of the concerns we have with it, but it will
certainly make it better, and we will continue to work on trying to
really address the issue.
We don't want anybody to walk in and give false information on an
application for a loan. One of the reasons we fought so hard to protect
State laws
[[Page H14023]]
and not to preempt all State laws is because that would be fraud and we
think it would be outrageous, it would be shyster. But as everything,
there is another side to this, and I will illustrate it with a loan
that I just recently closed myself, a loan that was made to me.
I submitted the application. I submitted the financial information.
And what happened after that was that because the lender wanted their
own form, they took my information that I had submitted to them and put
it on their own form. They handed it back to me in a stack of forms
that I needed to sign, and I signed them.
Now, what has happened in the marketplace much, much more than the
gentleman would like to know is that when that second block of papers
came back, somebody had put false information on that application
because they knew this borrower was not going to qualify for the loan
if they didn't fudge the borrower's income, if they didn't fudge the
borrower's credit in some way. So it was not the borrower who gave the
false information; it was somebody else in the chain. And that is what
we have got to guard against. And that's what the basic bill is all
about.
Now, we don't have any problem holding people personally accountable
for the information that they knowingly provide; but if somebody just
sticks some documents in front of me after I have given them the right
information and they go back and change the information or put it on
another form and I just happened to sign it because I presumed that the
lender I am dealing with or the broker I am dealing with is honorable,
I shouldn't be held accountable for that. And my second-degree
amendment helps to make that clearer. And I hope by the time this bill
gets passed, we can make it absolutely clear that what Mr. Hensarling
is trying to accomplish and what I am trying to accomplish get taken
into account.
Madam Chairman, I reserve the balance of my time.
Mr. HENSARLING. Madam Chairman, I would like to claim the time in
opposition although I am uncertain at this point whether I am actually
opposed to the gentleman's second degree amendment.
The Acting CHAIRMAN. Without objection, the gentleman from Texas is
recognized for 5 minutes.
There was no objection.
Mr. HENSARLING. Madam Chairman, although it has been many years, I
had a short and unillustrious career as an attorney; so I'm somewhat
familiar with the term ``knowingly'' as a legal term of art. I am less
familiar with the phrase ``with actual knowledge.'' Hearing the
gentleman from North Carolina's explanation, I think we are trying to
get at the very same situation. So the only thing that made me somewhat
nervous is I am unacquainted with the phrase as a legal term of art. I
do believe that the gentleman and myself are trying to achieve the same
thing. Perhaps it's innocuous.
Mr. FRANK of Massachusetts. Madam Chairman, will the gentleman yield?
Mr. HENSARLING. I yield to the gentleman from Massachusetts.
Mr. FRANK of Massachusetts. I would be glad, Madam Chairman, to give
the gentleman my assurance. And we can't all, when we see these things,
know it's exactly right. If as we go forward, assuming the secondary
amendment and the primary amendment are adopted, if the gentleman needs
some further clarification of questions that we can deal with between
now and the time of the final bill, we are open to continue those
discussions.
Mr. WATT. Madam Chairman, will the gentleman yield?
Mr. HENSARLING. I yield to the gentleman from North Carolina.
Mr. WATT. I will give him the same assurance. And I said it in my
statement because I just got the gentleman's amendment yesterday or the
day before, and I confess that my amendment to his amendment may not
accomplish everything that both of us are trying to accomplish either,
which is why I said we are going to have to continue to work on this,
and I am certainly willing to continue to work with him.
I understand exactly what the gentleman is trying to achieve. We
share that objective. But we want to make sure that the concerns I
raise don't get washed up in the ``knowingly'' term that the gentleman
used.
Mr. HENSARLING. I appreciate the gentleman's comments. I certainly
take the distinguished chairman at his word, and I take the gentleman
from North Carolina at his word, and I certainly withdraw any objection
that I might have to the second-degree amendment.
Madam Chairman, I yield back the balance of my time.
Mr. WATT. Madam Chairman, I yield back the balance of my time.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentleman from North Carolina (Mr. Watt) to the amendment offered by
the gentleman from Texas (Mr. Hensarling).
The amendment to the amendment was agreed to.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentleman from Texas (Mr. Hensarling), as amended.
The amendment, as amended, was agreed to.
Amendment No. 9 Offered by Mr. Meeks of New York
The Acting CHAIRMAN. It is now in order to consider amendment No. 9
printed in House Report 110-450.
Mr. MEEKS of New York. Madam Chairman, I offer an amendment.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 9 offered by Mr. Meeks of New York:
Page 15, line 10, strike ``reviewed, approved, and'' and
insert ``reviewed, and''.
Page 15, after line 12, insert the following new paragraph:
(3) Limitation and standards.--
(A) Limitation.--To maintain the independence of the
approval process, the Nationwide Mortgage Licensing System
and Registry shall not directly or indirectly offer pre-
licensure educational courses for loan originators.
(B) Standards.--In approving courses under this section,
the Nationwide Mortgage Licensing System and Registry shall
apply reasonable standards in the review and approval of
courses.
Page 15, line 13, strike ``and administered''.
Page 15, line 14, insert ``and administered by an approved
test provider'' before the period.
Page 17, line 23, strike ``reviewed, approved, and'' and
insert ``reviewed, and''.
Page 18, after line 14, insert the following new paragraph:
(5) Limitation and standards.--
(A) Limitation.--To maintain the independence of the
approval process, the Nationwide Mortgage Licensing System
and Registry shall not directly or indirectly offer any
continuing education courses for loan originators.
(B) Standards.--In approving courses under this section,
the Nationwide Mortgage Licensing System and Registry shall
apply reasonable standards in the review and approval of
courses.
The Acting CHAIRMAN. Pursuant to House Resolution 825, the gentleman
from New York (Mr. Meeks) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from New York.
Mr. MEEKS of New York. Madam Chairman, over the past few years, the
Financial Services Committee has been working to strike the right
balance between protecting home buyers without eliminating the
viability of the subprime mortgage market. Under the leadership of
Chairman Frank, I believe we have struck that balance in a bipartisan
manner. This is why I wholeheartedly agree and wanted to be an original
cosponsor of this legislation.
Madam Chairman, one of the new requirements of this bill is that all
mortgage originators must be licensed to serve the public. The purpose
of this requirement is to have a depository of all mortgage originators
and hopefully eliminate from the system those loan originators that
take advantage of borrowers. I know in my district this has been a real
problem. Along with the fingerprinting and the pulling of a credit
report, mortgage originators must also participate in 20 hours of
education in a program approved by the Nationwide Mortgage Licensing
System and Registry which is to be developed and maintained by the
Conference of State Bank Supervisors and the American Association of
Residential Mortgage Regulators.
Madam Chairman, I am very supportive of this aspect of the
legislation. But I am concerned that it leaves open an opportunity for
a conflict of interest. The conflict would take place if
[[Page H14024]]
the Nationwide Mortgage Licensing System were to decide to offer the
education requirement themselves.
Currently, 34 States have mortgage education requirements for loan
originators licensed in those respective States. This training is
conducted by many small business providers who are approved to offer
mortgage education by each State's regulating bodies. My amendment is
quite simple. It does the following:
A, to maintain the independence of the approval process, the
Nationwide Mortgage Licensing System and Registry shall not directly or
indirectly offer educational courses for prelicensure or continuing
education for mortgage originators.
{time} 1600
And, B, in approving courses under this act, the Nationwide Mortgage
Licensing Systems and Registry shall apply reasonable standards in the
review and approval of courses.
Mr. Chairman, to make it simple, I used to be a judge. A judge cannot
preside over a case in which he is the litigant. This amendment has
been discussed with the Conference of State Bank Supervisors, and they
do not object. I think it is a simple amendment.
I reserve the balance of my time.
Mr. BACHUS. Mr. Chairman, I claim the time in opposition although I
am not opposed to the amendment.
The Acting CHAIRMAN (Mr. Holden). Without objection, the gentleman
from Alabama is recognized for 5 minutes.
There was no objection.
Mr. BACHUS. I want to compliment the gentleman from New York (Mr.
Meeks) for offering this amendment. I know it clarifies the role of the
Conference of State Bank Supervisors and the approval process for State
license mortgage practitioners and originators. I compliment the
gentleman. I know that the Conference has worked with the industry in
crafting this amendment. I urge support for it.
Mr. MEEKS of New York. Thank you, Mr. Bachus.
Mr. Chairman, I yield back the balance of my time.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentleman from New York (Mr. Meeks).
The amendment was agreed to.
Amendment No. 11 Offered by Ms. Ginny Brown-Waite of Florida
The Acting CHAIRMAN. It is now in order to consider amendment No. 11
printed in House Report 110-450.
Ms. GINNY BROWN-WAITE of Florida. Mr. Chairman, I have an amendment
at the desk.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 11 offered by Ms. Ginny Brown-Waite of
Florida:
Page 54, line 14, strike ``and''.
Page 54, line 16, strike the period and insert ``; and''.
Page 54, after line 16, insert the following new clause:
``(iv) a mortgage insured under title II of the National
Housing Act (12 U.S.C. 1707 et seq.).''.
The Acting CHAIRMAN. Pursuant to House Resolution 825, the
gentlewoman from Florida (Ms. Ginny Brown-Waite) and a Member opposed
each will control 5 minutes.
The Chair recognizes the gentlewoman from Florida.
Ms. GINNY BROWN-WAITE of Florida. Mr. Chairman, it is no secret that
Americans are facing a growing crisis in the subprime housing market.
Subprime mortgage foreclosures have spiked and crashed for the last 6
years. Rates have ranged as high as 9.25 in 2002 for foreclosures and
as low as roughly 3 percent in mid 2005. In the first quarter of this
year, they crept back up again to 5 percent.
However, foreclosure rates among loans the Federal Housing
Administration insures have stayed somewhat consistent throughout that
time. Since there has been less than 1 percent fluctuation in these
foreclosure rates since 2001, I think it is very imperative that we
have this amendment adopted.
This amendment excludes loans insured by FHA from the provisions of
this bill. The language is actually very similar to an amendment that I
offered and that was accepted in the Financial Services Committee, one
that exempted VA loans.
Mr. Chairman, the provisions in this bill will help Americans in the
pursuit of owning their own home, many believe, but there are still
millions of Americans who without FHA probably would not have had this
opportunity. But if VA and FHA are already writing loans that are
clearly good for their customers, Congress should leave them alone and
let them carry on with their business. Obviously, it is working, and as
the old axiom goes, if it's not broke, don't fix it.
Therefore, I urge Members to support my amendment that exempts FHA-
insured loans from the provisions of this bill.
I reserve the balance of my time.
Mr. FRANK of Massachusetts. Mr. Chairman, I claim the time that is
set aside for someone in opposition since no one is.
The Acting CHAIRMAN. Without objection, the gentleman is recognized
for 5 minutes.
There was no objection.
Mr. FRANK of Massachusetts. I appreciate the gentlewoman coming
forward. She has on this and other occasions played a very constructive
role in helping us work things out. We have already done this for the
Veterans Administration, Department of Veterans Affairs. Yes, in fact,
it is our hope to get more people into the FHA program as an
alternative to subprime. One of the things we've done, and the Senate
is now doing it, is to extend the FHA's reach to people with subprime;
although I do want to remind my friends in the Senate, I feel very
strongly that when we do that, it would be terrible social policy to
make people with weaker credit who are faithfully making their payments
pay more than other people, and we will deal with that as we work out
the two bills.
But for purposes of this bill, the gentlewoman is absolutely correct.
So I intend to support her amendment.
And that leaves me with some extra time, so I would now yield 2
minutes to the gentleman from California, a member of the committee.
(Mr. BACA asked and was given permission to revise and extend his
remarks.)
Mr. BACA. Mr. Chairman, I stand in support of this amendment and also
rise in support of H.R. 3515. I want to thank Chairman Frank for his
leadership.
The headline from yesterday's San Bernardino Sun, my local paper,
read ``Area Number 3 in Nation in Foreclosures.''
Right now, one in 43 houses in San Bernardino and Riverside Counties
are undergoing foreclosure. Our families are being torn apart by this
crisis. The American Dream of homeownership has become a nightmare for
them.
I had a town hall meeting in my district on foreclosures last
weekend. I am glad that I did because we were able to assist a lot of
families. These families are scared and need help. They feel hopeless,
unless Congress addresses this issue.
Our families said that the teaser rate was resetting to a payment
that was more than half of their income. Another said they had to take
a second job just to afford the new payments after the rates were
adjusted. It was clear that these families were steered into loans that
they could not afford.
On the other hand, other constituents told me that the interest rate
they received on the loans was higher than what they were told that
they would receive. Too many consumers are victims of this type of
predatory bait-and-switch practice.
This bill includes an amendment which I offered which requires
additional disclosures to provide consumers information before signing.
This will help put an end to the abusive practice and ensure that
consumers have accurate information about the cost of their loan so
that they know what they are buying.
H.R. 3915 will help put an end to predatory lending once and for all.
And it prohibits prepayment penalties, outlaws discriminatory steering
practices and bans yield spread premiums. It also includes stronger
underwriting standards to help stop predatory lenders in their tracks.
I ask my colleagues to support H.R. 3915 and support this amendment.
[From the Sun, Nov. 13, 2007]
Area No. 3 in Nation in Foreclosures
(By Matt Wrye)
If you know 43 homeowners in the area there's a fair chance
one of them just lost their house to foreclosure.
[[Page H14025]]
In a report to be released today Wednesday, Realty Trac, a
real-estate service, said there is one foreclosure for every
43 households in San Bernardino and Riverside counties,
according to third-quarter 2007 data.
That puts the region at No. 3 nationwide for home
foreclosures. Stockton was at the top of the list, followed
by Detroit.
The two-county area saw more than 31,661 foreclosure
filings on 20,664 between 20,664 properties between July and
September.
That number will drop steadily, but higher-than-normal
foreclosure rates will continue until 2009 or 2010, said Jack
Kyser, chief economist for the Los Angeles County Economic
Development Corp.
``It's catching up to us,'' he said about the subprime
mortgage fallout. ``Unfortunately, the trend will continue.
It's going to be slowing down, but people forget the size of
the Riverside-San Bernardino area.''
John Husing, a regional economist based in Redlands, agrees
with Kyser.
``There's no question that you have a disproportionately
large number of foreclosures and you'll be continuing to have
that in the Inland Empire versus other places in the country
and Southern California,'' Husing said. ``The trend is going
to continue for at least the next year to year and a half
because of mortgages that were reset back in 2005 and 2006.''
The top 10 was rounded out by Fort Lauderdale, Fla.; Las
Vegas; Sacramento; Cleveland; Miami; Bakersfield and Oakland.
Mr. FRANK of Massachusetts. Mr. Chairman, I yield my remaining time
to the gentleman from Oregon.
The Acting CHAIRMAN. The gentleman from Oregon is recognized for 2
minutes.
Mr. BLUMENAUER. I appreciate the gentleman's courtesy, as I
appreciate watching the legislative process work here. Too seldom in
the last 12 years have we watched this unfold in the way that it has,
and I congratulate Mr. Frank, Mr. Watt, Mr. Miller, the Ranking Member
Bachus, this is how the legislative process should work.
I will tell you, this is not a Sarbanes-Oxley moment, where Congress
stalled and stalled and stalled until the problems got so great they
exploded. Then Congress rushed to act; actually didn't know in many
instances what people were voting on.
This bill has been a deliberate process. It has not been rushed. It
has been bipartisan. And I must say that I feel better than at any
point in the last 4 or 5 years, as I have been alarmed as Congress has
been missing in action on this issue where the regulatory structures
have looked the other way.
The big question for me, though, is where we go from here. I am
pleased in the Ways and Means Committee we have been able to make some
tax adjustments so that people will not be taxed on phantom ``profits''
if they end up having a loan foreclosed upon.
I am eager to find out if the gentleman, Mr. Miller from North
Carolina, can move forward dealing with fundamental bankruptcy reform
so that people who are homeowners get the same protection that would be
given to a speculator in an identical home in a subdivision or
identical units in a condominium tower. This is extremely critical.
We are talking now not just about the hundreds of thousands of people
that will be affected by this legislation. Ultimately, there will be
ripple effects throughout the economy, a shaken industry, and millions
of innocent homeowners who are going to have their property values drop
because regulators were asleep at the switch, because Congress was
missing in action, and because abusive practices took place.
H.R. 3915 is a good start. I commend the committee and look forward
to working with you as it works its way through for the refinement of
this legislation and the next step.
Ms. GINNY BROWN-WAITE of Florida. Mr. Chairman, I certainly
appreciate the fact that the gentleman from Massachusetts (Mr. Frank),
the chairman of the Financial Services Committee, has worked with me
both on the VA and the FHA loan exemption. I think it is the right
thing to do, and I would urge my colleagues to support this amendment.
I yield back the balance of my time.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentlewoman from Florida (Ms. Ginny Brown-Waite).
The amendment was agreed to.
Amendment No. 12 Offered by Mr. Garrett of New Jersey
The Acting CHAIRMAN. It is now in order to consider amendment No. 12
printed in House Report 110-450.
Mr. GARRETT of New Jersey. Mr. Chairman, I have an amendment at the
desk.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 12 offered by Mr. Garrett of New Jersey:
Page 52, strike line 9 and all that follows through line 15
(and redesignate subsequent paragraphs accordingly).
The Acting CHAIRMAN. Pursuant to House Resolution 825, the gentleman
from New Jersey (Mr. Garrett) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from New Jersey.
Mr. GARRETT of New Jersey. Before I begin, let me just recognize and
appreciate the work by the ranking member of the committee with regard
to this overall underlying piece of legislation for his work to try to
improve the legislation. I believe his actions have been done in view
of his constituents and their concerns with the primary lending market
as we see it today.
Getting to the amendment that is before us, Mr. Chairman, the
amendment would simply strike the rebuttable presumption paragraph
under section 203 of the manager's amendment text. As currently
drafted, section 203 of the bill specifically lists several criteria
that lenders must meet when they originate a loan and that loan to be
considered a qualified safe harbor mortgage. Qualified safe harbor
mortgages are loans that: one, document consumer income; two, an
underwriting process based on fully indexed rate; three, a debt-to-
income ratio not greater than 50 percent; four, no negative
amortization; and five, six payments for at least 7 years an adjustable
rate loan with an APR that varies less than 3 percent over indexed
rate.
Now after meeting this prescriptive list of requirements, the loan
can be considered a qualified safe harbor mortgage. It is presumed that
the mortgage is an appropriate loan. However, section 203 also contains
a provision that, even when all these provisions are met, would allow a
borrower to rebut this presumption in a court of law and claim that the
creditor has made a loan to them in bad faith anyway.
You see, by allowing lenders to still be held legally liable for a
loan even after all these conditions have been met, we are creating
even more uncertainty for loan originators. This will in turn lead to
further tightening of the credit market and keep more people from
getting loans.
Mr. Chairman, if a creditor goes through all these requirements as
listed, I do not believe that they should still have to worry about
being held legally liable if the borrower cannot make their payments.
Such a provision undermines the very nature of a safe harbor vision. It
undermines the presumption of good faith that the law itself
establishes. How can we on one hand tell the lender that they are
providing them with a safe harbor from suit and then turn right around
and say that safe harbor can be rebutted? I am afraid this will, at the
very least, raise the cost of loans, at the worst, keep the loans from
being made at all.
Mr. Chairman, I ask you to help the providers, lenders make some
sense of the legal clarity and to make this a safe harbor, a true safe
harbor. I would ask every Member to support this important amendment.
I reserve the balance of my time.
Mr. WATT. Mr. Chairman, I claim time in opposition to the amendment.
The Acting CHAIRMAN. The gentleman from North Carolina is recognized
for 5 minutes.
Mr. WATT. Mr. Chairman, once again, Mr. Garrett has focused on an
issue that we talked about earlier in the debate. I offered an
amendment and withdrew it, and it related to this general section.
Basically, what we have done is allowed the lenders to presume, if they
meet certain conditions, that their loan will be considered a safe
harbor loan and go into the secondary market without any complications.
In certain kinds of loans, we have made that presumption rebuttable
because there is still tremendous opportunity for abuse even if they
meet all of the safe harbor requirements. In other instances, we have
made the presumption irrebuttable, and it was on the irrebuttable part
of that that I offered the amendment and withdrew it. This is on the
rebuttable part.
[[Page H14026]]
Now, the problem with Mr. Garrett's amendment is that if you take out
this rebuttable presumption, then the presumption becomes irrebuttable
for all kinds of loans, those that have risks, and those that don't
have risks.
{time} 1615
So what does that mean to the average lay person when you create a
rebuttable or irrebuttable presumption? An irrebuttable presumption
makes it impossible for you ever to rebut it. Because it is
irrebuttable, you can't even raise it anymore. A rebuttable presumption
makes it possible, even though it is presumed, that you can still go
and offer evidence that what is generally a fair loan turned out to be,
in your particular case, an unfair loan.
So the effect of Mr. Garrett's amendment would be to make it
impossible ever for anybody to get into court and contest any of these
loans. Because if you take out the rebuttable presumption, it becomes
an irrebuttable presumption. We don't want that. I mean, that is where
the marketplace is now. It is out of control. It has been out of
control.
While we are setting up a construct to make the market better, we
don't want to pass a law that then sanctions going right back to where
we are now. That is how we got here in the first place, the market was
out of control. And the construct that we have set up allows people to
buy mortgages in the secondary market and presume that they will be
okay.
But we don't want to set up a situation where it is impossible for
anybody to go into the secondary market or against anybody and say
under no circumstances will you be able to get liability. That is what
Mr. Garrett would have you do. I think it would be very, very, very bad
public policy.
With that, I encourage opposition.
Mr. Chairman, I reserve the balance of my time.
Mr. GARRETT of New Jersey. Mr. Chairman, the gentleman misstates the
case when he says you can never get into court. You can get into court
when these five different criteria are not met. But when these five
criteria are met, you have a safe harbor. That is the language of the
bill. What is a safe harbor for, if not for giving protection to those
who are meeting the requirements.
With that, I yield such time as he may consume to the gentleman from
Louisiana (Mr. Baker).
Mr. BAKER. I thank the gentleman for his courtesy. I shall try to be
brief. I had hoped at the outset the bill would present a uniform
national standard so all those engaged in this practice would have
legal certainty as to the behavior that complies with the law, no
matter where one might extend credit. Unfortunately, that is not the
case in the underlying bill.
I had hoped more clarity in the provisions of enforceability. I am
troubled by some of the unclear language, the way in which some
descriptive phrases have been used, as in, for example, the anti-
steering provision, which states that loan products which have
predatory characteristics, one cannot be sure what constitutes a
predatory characteristic. Third, in contract resolution, we had hoped
that we would at least avail ourselves of mandatory arbitration, which
is a common business practice to resolve differences without the court
being involved. Unfortunately, the bill in its current form prohibits
mandatory arbitration, which leads us then to the gentleman's very
well-thought-out amendment relative to the safe harbor provision.
At least we should have the statement that if you engage in lending
practices of a certain type, that there will be legal certainty you
will not be sued at some future point for engaging in the honorable
profession of extending credit to people trying to buy homes.
On that point, let me quickly add that 95 percent or more of the
people engaged in this practice are honorable people, doing a public
service, extending credit to people who pay their obligations on time.
It is a mischaracterization on this floor to represent that all people
engaged in the business of extending credit for this honorable purpose
are up to no good. In fact, when foreclosures occur, it actually costs
the industry business.
This is not a helpful environment. We would be legislating with
certainty, and the bill in the underlying form does not provide that.
The gentleman's amendment is excellent, well-constructed. I hope the
House will favorably consider it.
Mr. WATT. Mr. Chairman, I yield myself such time as I may consume.
Mr. FRANK of Massachusetts. Will the gentleman yield to me?
Mr. WATT. I yield to the chairman.
Mr. FRANK of Massachusetts. As I said to my friend from Louisiana, I
know everybody can't hear everything. He defends against an accusation
that was not made when he said, Don't say they are all up to no good.
Several of us on this side have explicitly said that we believe the
majority are well-intentioned. The problem, I think, is that where
there are people who are not well-intentioned, there are no rules to
stop them. But we did on several occasions quite say the opposite of
what the gentleman said we shouldn't have said.
Mr. WATT. I would just add to that, on the floor today time after
time after time, I have said that the great, great, great majority of
the lenders are abiding by the rules. It's not those lenders who
created this crisis. It is those people who are operating outside the
rules, and that is what we are trying to put a construct around that is
workable to protect those who abide by the rules of the road without
shielding those who will abuse the process. This amendment would allow
that to happen.
Mr. Chairman, I reserve the balance of my time.
Mr. GARRETT of New Jersey. Mr. Chairman, I would like to point out
that this amendment is supported by the Mortgage Bankers Association,
the American Financial Services Association, and Financial Services
Roundtable. I believe they do that because they realize when a bill
sets up the language of presumption of ability to repay and net
tangible benefits, as it has done on line 1, page 52, and then defines
that as a safe harbor, with the one hand, but then immediately takes it
away with the other hand by saying that you can still go into court
after the lender has met all the requirements as we defined as what is
an ability to repay and tangible benefits, we are creating more
uncertainty in the market, as the gentleman from Louisiana indicated,
one that will hurt the overall economy and the ability to secure loans.
I ask for a ``yes'' vote on this amendment.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentleman from New Jersey (Mr. Garrett).
The question was taken; and the Acting Chairman announced that the
noes appeared to have it.
Mr. GARRETT of New Jersey. Mr. Chairman, I demand a recorded vote.
The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from New Jersey
will be postponed.
Amendment No. 13 Offered by Mr. Frank of Massachusetts
The Acting CHAIRMAN. It is now in order to consider amendment No. 13
printed in House Report 110-450.
Mr. FRANK of Massachusetts. Mr. Chairman, I offer an amendment.
The Acting CHAIRMAN. Is the gentleman the designee of the gentleman
from North Carolina?
Mr. FRANK of Massachusetts. Yes, I am.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 13 offered by Mr. Frank of Massachusetts:
Page 64, line 12, strike the closing quotation marks and
the second period.
Page 64, after line 12, insert the following new
paragraphs:
``(10) Pattern or practice of violations.--
``(A) In general.--In addition to any money penalty that
may be imposed by any agency referred to in subsection (a) or
(c) of section 108 under any provision of law referred to in
such section in connection with such agency or any other
enforcement action taken by such agency under such section,
any creditor, assignee, or securitizer which engages in a
pattern or practice of originating, assigning, or
securitizing residential mortgage loans that violate
subsection (a) or (b) shall forfeit and pay a civil penalty
of--
``(i) not less than $25,000 for each such loan; and
``(ii) $1,000,000 for engaging in such pattern or practice.
``(B) Information.--Any person may submit information to
any agency referred to in
[[Page H14027]]
subparagraph (A) regarding any pattern or practice of
violating subsection (a) or (b) and such agency shall
promptly bring such complaint to the attention of any other
such agency which may have jurisdiction over any person
involved in the alleged violation.
``(11) Trust fund for consumers without remedy.--
``(A) In general.--Any civil money penalty collected under
paragraph (10) shall be transferred to the Secretary of the
Treasury to be held in trust in the Consumers Rescission and
Cure Remedial Fund for the benefit of borrowers with
residential mortgage loans that were originated in violation
of subsection (a) or (b) for which the consumers are eligible
for rescission or cure but have no party against whom to
assert such remedies.
``(B) Regulations.--The Secretary of the Treasury shall
prescribe regulations establishing--
``(i) a claims process for consumers described in
subparagraph (A) to file claims against the Consumers
Rescission and Cure Remedial Fund for rescission or cure of a
residential mortgage loan that was originated in violation of
subsection (a) or (b);
``(ii) a procedure for administrative determination of
claims, and the allowance or disallowance of any such claim,
and a review of such determination; and
``(iii) a process for payment of any claim allowed against
the Fund to effectuate a rescission or cure as part of a
final settlement entered into by the consumer with the
Secretary with respect to such claim.
``(C) Finality.--Any determination by the Secretary under
this paragraph shall be final and not subject to judicial
review.''.
The ACTING Chairman. Pursuant to House Resolution 825, the gentleman
from Massachusetts (Mr. Frank) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Massachusetts.
Mr. FRANK of Massachusetts. Mr. Chairman, I offer this amendment, but
I do not intend to push it today. I will be withdrawing it with the
consent of the body. I was not as careful as I should have been in
supervising or making clear my intentions in what I wanted. I do
believe one of the two most controversial items in this is preemption.
Very few people think we have done preemption just right. Fortunately,
a lot of us are here. A lot of other people think we have done too much
or too little.
The question of preemption is really twofold: one, should you
preempt; and, secondly, having preempted, having prevented the State
from acting, have you put sufficient rules in there to defer bad
behavior. I think we probably didn't, as I read this over. That is, I
think we have preempted, as we have clarified it, the right amount: not
too much and not too little. But we have not put into the preemption
enough in terms of deterrence.
We do have the policies and procedures in the safe harbor exemption.
But what I think we should have and what this amendment was meant to
embody is the ability of aggrieved parties or representatives,
Attorneys General of the States, others, to go to the regulator of the
entity in question and say, Look, there's been this pattern of abuse.
When we have a pattern of abuse, you act.
We did not want to make the liability for any one violation too
heavy. We didn't want to overkill. But we then would run into the
problem the gentleman from North Carolina talked about, where
violations at a moderate level of penalty could be simply a cost of
doing business. So having a pattern and practice approach in here
prevents people from treating a moderate penalty from simply being a
cost of doing business.
It was drafted more than I had intended. That is my fault. I should
have been paying more attention. I do not think originators ought to be
covered in this, certainly not with a $1 million limitation.
So for that reason I am going to offer this and say that I hope to
withdraw it now and work on it further.
I would yield to my friend from Colorado who is one of those who
brought some of the problems here to my attention.
Mr. PERLMUTTER. Mr. Chairman, I thank the chairman for yielding to
me, and I thank the chairman for being willing to work on this
particular amendment to zero in on the major players who, in a repeated
fashion, time after time, show by pattern and practice an abuse of this
predatory lending policy.
I do want to reiterate something that Mr. Blumenauer said. I want to
congratulate the ranking member and Mrs. Biggert and Mrs. Capito and a
number of the others on the Republican side of the aisle, along with
the sponsors of this bill, for working and refining and developing a
bill that will deal with the problems that we have seen of predatory
lending and subprime loans that have hurt a lot of the people in this
country and our financial system.
I also intend to work with the chairman on the eviction piece, the
rental piece of this, so we don't harm the single-family, owner-
occupied system of FHA and VA-type loans.
Mr. FRANK of Massachusetts. Let me take back my time. The gentleman
raised that issue.
The gentleman from Texas (Mr. Marchant) raised an issue on renter
protection. So you cannot be the homeowner being foreclosed upon and
then get the rights of a tenant. The gentleman from Colorado had a
further point, which is in those cases where there was a very specific
prohibition in the loan against rental, that should not be overcome by
what we do.
I would yield the remainder of my time to the gentleman from North
Carolina.
The Acting CHAIRMAN. The gentleman from North Carolina is recognized
for 2 minutes.
Mr. MILLER of North Carolina. Mr. Chairman, one of my concerns about
this bill is the weakness, the inadequacy of the remedies available to
the consumer. I have said that earlier today in the debate on this bill
that I am very concerned that if industry is looking at one consumer in
50, or one in 100, or one in 200 who has actually been the victim of
illegal practices, brings a claim for very modest remedies, many
industries or some in industry may simply view that as a minor cost of
doing business, a minor nuisance, and just keep doing what they are
doing.
This amendment, while I agree it does need to be tinkered with some,
would raise the stakes substantially. It does provide a more
substantial penalty, $1 million plus $25,000 for each loan. That
actually is not that much. Ameriquest, one of the biggest subprime
lenders, paid $425 million in a settlement and just kept doing it. Just
kept going. It was the cost of doing business. And their CEO is now the
ambassador to one of those small, pleasant countries in Europe that big
campaign contributors get appointed to be ambassadors to. It hasn't
affected them in the slightest.
This amendment would call the attention of the regulatory agencies,
the SEC to pay attention to the securitizers, the Goldman Sachses of
the world, the big banks; Bank of America would have to answer to the
OCC, their regulatory body, and on and on. Mr. Chairman, those industry
groups do not want the attention of their regulator that way. They do
not want to be under that kind of scrutiny; they do not want to pay
those penalties. And this would substantially raise the stakes for them
and encourage them to abide by the law.
Mr. FRANK of Massachusetts. Let me take back the time. The gentleman
has underlined an important point. We are going to see this back again
in somewhat buffed-up form. It goes to the regulators, so this isn't
going to lead to court. It is not an explosion of litigation. It would
allow a range of people to bring it, including State Attorneys General,
but it would be brought to the regulator, someone familiar with that
business model and an entity able to discriminate between good and bad
practices.
I ask unanimous consent to withdraw the amendment.
The Acting CHAIRMAN. Without objection, the amendment is withdrawn.
There was no objection.
Amendment No. 14 Offered by Mr. Al Green of Texas
The Acting CHAIRMAN. It is now in order to consider amendment No. 14
printed in House Report 110-450.
Mr. AL GREEN of Texas. Mr. Chairman, I offer an amendment.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 14 offered by Mr. Al Green of Texas:
Page 15, line 7, insert ``which shall include instruction
on fraud, consumer protection and fair lending issues''
before the period.
Page 16, line 6, strike ``and'' after the semicolon.
Page 16, line 8, strike the period and insert ``; and''.
[[Page H14028]]
Page 16, after line 8, insert the following new clause:
(iv) Federal and State law and regulation, including
instruction on fraud, consumer protection, and fair lending
issues.
Page 17, line 20, insert ``, including education on fraud,
consumer protection, and fair lending issues.''.
The Acting CHAIRMAN. Pursuant to House Resolution 825, the gentleman
from Texas (Mr. Al Green) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Texas.
Mr. AL GREEN of Texas. Mr. Chairman, I also would like to thank the
chairman of the full committee, Chairman Frank, Ranking Member Bachus,
the subcommittee Chair and ranking member as well.
Mr. Chairman, this is a very simple and straightforward amendment.
This amendment deals with minimum standards for mortgage originators,
and it requires that mortgage originators receive a certain amount of
training.
{time} 1630
The bill itself right now requires at least 20 hours of education, of
which at least 3 hours of Federal law shall be included in the
regulations as well, along with 3 hours of ethics. What this amendment
does is include in the ethics training instructions on fraud, consumer
protection and fair lending issues. It is very straightforward. It is
not complicated.
Mr. Chairman, I reserve the balance of my time.
Mr. BACHUS. Mr. Chairman, I claim the time in opposition, although I
am not opposed to the amendment.
The Acting CHAIRMAN. Without objection, the gentleman from Alabama is
recognized for 5 minutes.
There was no objection.
Mr. BACHUS. Mr. Chairman, I compliment the author, Mr. Green, for
this amendment. I would anticipate and hope that with the passage of
this amendment that mortgage originators would receive instructions on
these subjects. So I very much am in support of the amendment.
Mr. Chairman, I yield back the balance of my time.
Mr. AL GREEN of Texas. Mr. Chairman, I yield 1\1/2\ minutes to the
gentlewoman from Ohio (Ms. Kaptur).
Ms. KAPTUR. Mr. Chairman, I thank Congressman Green and express
gratitude to Chairman Frank, Ranking Member Bachus, Subcommittee Chair
Watt and Congressman Miller for their extraordinary efforts to restore
confidence in our Nation's housing markets and address the housing
mortgage crisis facing our Nation, this crisis has been felt no more
harshly than in the State of Ohio, one of the hardest hit States in our
Union, where our foreclosure filing rates have gone up 300 percent
since just last year, thousands upon thousands of Ohioans having for
sale and foreclosure signs in front of their homes. In Ohio, $20
billion and growing is the gap, the financing gap.
I rise in support of the gentleman's amendment, but want to clarify
that under the bill, any legal case that has been filed can proceed
forward, indeed until the regulations for implementation of the bill
are completed after it is signed by the President. States are not
limited in their ability to prosecute in cases of fraud, collusion,
misrepresentation, deception, false advertising or civil rights.
Importantly, any mortgage made in the future will have to assure the
borrower's ability to repay and that the borrower be yielded a net
tangible benefit.
As this bill moves forward, I believe it can be perfected even more
to restore confidence, discipline and provide accountability in our
troubled, very troubled, housing markets, which are helping to drive
our Nation into recession.
I just want to say to Chairman Frank, you are the right man in the
right place at the right time. I just hope that the other body and the
President of the United States follow your leadership on this really
critical issue, take it not just to Ohio, but to our country.
Stockton, Detroit, Riverside-San Bernardino Post Top Metro Foreclosure
Rates in Q3
(By RealtyTrac Staff)
IRVINE, Calif.--Nov. 14, 2007--RealtyTrac'
(realtytrac.com), the leading online marketplace for
foreclosure properties, today released its Q3 2007
Metropolitan Foreclosure Market Report, which shows Stockton,
Calif., Detroit and Riverside-San Bernardino, Calif.,
documented the three highest foreclosure rates among the
nation's 100 largest metropolitan areas during the third
quarter.
RealtyTrac publishes the largest and most comprehensive
national database of foreclosure and bank-owned properties,
with over 1 million properties from nearly 2,500 counties
across the country, and is the foreclosure data provider to
MSN Real Estate, Yahoo! Real Estate and The Wall Street
Journal's Real Estate Journal.
``Although cities in just three states--California, Ohio
and Florida--accounted for more than two-thirds of the top 25
metro foreclosure rates, increasing foreclosure activity was
not limited to just a few hot spots,'' said James J.
Saccacio, chief executive officer of RealtyTrac. ``In fact,
77 out of the top 100 metro areas reported more foreclosure
filings in the third quarter than they had in the previous
quarter. Still, there continue to be pockets of the country--
most noticeably metro areas in the Carolinas, Virginia and
Texas--that have thus far dodged the foreclosure bullet.''
california, ohio, florida cities dominate top metro foreclosure rates
Stockton, Calif., documented one foreclosure filing for
every 31 households during the quarter, the highest
foreclosure rate along the nation's 100 largest metro areas.
A total of 7,116 foreclosure filings on 4,409 properties were
reported in the metro area during the quarter, up more than
30 percent from the previous quarter.
Detroit's third-quarter foreclosure rate of one foreclosure
filing for every 33 households ranked second highest among
the nation's 100 largest metro areas. A total of 25,708
foreclosure filings on 16,079 properties were reported in the
metro area during the quarter, more than twice the number of
filings in the previous quarter.
The Riverside-San Bernardino, Calif., metropolitan area in
Southern California documented the nation's third highest
metro foreclosure rate, one foreclosure filing for every 43
households. A total of 31,661 foreclosure filings 20,664
properties were reported in the metro area during the
quarter, up more than 30 percent from the previous month.
Other cities in the top 10 metro foreclosure rates: Fort
Lauderdale, Fla.; Las Vegas; Sacramento, Calif.; Cleveland;
Miami; Bakersfield, Calif.; and Oakland, Calif. California
cities accounted for seven of the top 25 metro foreclosure
rates, while Florida and Ohio each accounted for five of the
top 25 spots.
riverside-san bernardino, los angeles, detroit report most foreclosure
filings
The Riverside-San Bernardino metropolitan area reported the
most foreclosure filings during the quarter, followed by Los
Angeles, with 29,501 filings on 18,043 properties. The Los
Angeles foreclosure rate of one foreclosure filing for every
113 households ranked No. 26 among the nation's 100 largest
metro areas. Detroit reported the third highest number of
foreclosure filings during the quarter.
Atlanta's foreclosure filing total of 21,695 on 18,940
properties was the fourth highest foreclosure filing total,
and the metro area's foreclosure rate of one foreclosure
filing for every 92 households ranked No. 18 among the top
100 metro areas.
Other cities with foreclosure filing totals among the 10
highest were Phoenix, Fort Lauderdale, Fla., Cleveland,
Chicago, Miami and Sacramento, Calif.
report methodology
The RealtyTrac Metro Foreclosure Market Report provides the
total number of foreclosure filings by metropolitan area,
along with the number of households per foreclosure filing.
The household numbers are based on the U.S. Census Bureau's
2005 estimates of total housing units.
Beginning with the Midyear 2007 report, the report also
includes counts of properties with at least one foreclosure
filing reported against them. This new metric only counts a
property once, even if there were multiple foreclosure
actions filed against the property during the time period
covered by the report.
FORECLOSURE ACTIVITY FOR THE NATION'S 100 LARGEST MSAS--Q3 2007
------------------------------------------------------------------------
Foreclosure
filings
Rate rank ---------------
Total filings
------------------------------------------------------------------------
1. Stockton, CA....................................... 7,116
2. Detroit/Livonia/Dearborn, MI....................... 25,708
3. Riverside/San Bernardino, CA....................... 31,661
4. Fort Lauderdale, FL................................ 16,595
5. Las Vegas/Paradise, NV............................. 14,948
6. Sacramento, CA..................................... 15,479
7. Cleveland/Lorain/Elyria/Mentor, OH................. 16,332
8. Miami, FL.......................................... 15,484
9. Bakersfield, CA.................................... 3,947
10. Oakland, CA........................................ 13,245
11. Akron, OH.......................................... 3,992
12. Denver/Aurora, CO.................................. 13,179
13. Fresno, CA......................................... 3,687
14. Memphis, TN........................................ 6,239
15. Phoenix/Mesa, AZ................................... 18,328
16. San Diego, CA...................................... 12,274
17. Dayton, OH......................................... 4,147
18. Atlanta/Sandy Springs/Marietta, GA................. 21,695
19. Tampa/St. Petersburgh/Clearwater, FL............... 13,562
20. Toledo, OH......................................... 3,119
21. Palm Beach, FL..................................... 6,387
22. Dallas, TX......................................... 14,717
23. Columbus, OH....................................... 7,265
24. Indianapolis, IN................................... 6,604
25. Sarasota/Bradenton/Venice, FL...................... 3,308
26. Los Angeles/Long Beach, CA......................... 29,501
27. Orlando, FL........................................ 7,189
28. Warren/Farmington Hills/Troy, MI................... 9,025
29. Fort Worth/Arlington, TX........................... 6,328
[[Page H14029]]
30. Cincinnati, OH..................................... 6,144
31. Orange, CA......................................... 6,899
32. Worchester, MA..................................... 2,069
33. Jacksonville, FL................................... 3,501
34. Tucson, AZ......................................... 2,514
35. San Antonio, TX.................................... 4,300
36. Houston/Baytown/Sugarland, TX...................... 11,960
37. Springfield, MA.................................... 1,637
38. Washington/Arlington/Alexandria, DC-VA-MD.......... 9,099
39. Essex, MA.......................................... 1,605
40. Newhaven/Milford, CT............................... 1,850
41. Chicago, IL........................................ 16,314
42. Ventura, CA........................................ 1,400
43. San Jose/Sunnyvale/Santa Clara, CA................. 3,245
44. Austin/Round Rock, TX.............................. 3,063
45. Gary, IN........................................... 1,408
46. Charlotte/Gastonia, NC............................. 3,148
47. Newark, NJ......................................... 3,970
48. Boston/Quincy, MA.................................. 3,386
49. Tacoma, WA......................................... 1,369
50. Lake/Kenosha, IL-WI................................ 1,110
51. Milwaukee/Waukesha/West Allis, WI.................. 2,870
52. Camden, NJ......................................... 1,225
53. Little Rock/North Little Rock, AR.................. 1,250
54. Kansas City, MO-KS................................. 3,659
55. Edison, NJ......................................... 3,787
56. St Louis, MO-IL.................................... 4,820
57. Cambridge/Newton/Framingham, MA.................... 2,278
58. Tulsa, OK.......................................... 1,497
59. Nashville/Davidson, TN............................. 2,224
60. Scranton/Wilkes-Barre/Hazleton, PA................. 898
61. Hartford, CT....................................... 1,674
62. Bridgeport/Stamford/Norwalk, CT.................... 1,171
63. Salt Lake City, UT................................. 1,253
64. Oklahoma City, OK.................................. 1,639
65. Baltimore/Towson, MD............................... 3,516
66. Louisville, KY-IN.................................. 1,696
67. Raleigh/Cary, NC................................... 1,242
68. Bethesda/Frederick/Gaithersburg, MD................ 1,362
69. Minneapolis/St Paul/Bloomington, MN-WI............. 3,699
70. Philadelphia, PA................................... 4,456
71. Omaha/Council Bluffs, NE-IA........................ 846
72. Knoxville, TN...................................... 701
73. Suffolk/Nassau, NY................................. 2,321
74. Pittsburgh, PA..................................... 2,548
75. Seattle/Bellevue/Everett, WA....................... 2,318
76. El Paso, TX........................................ 527
77. New York/Wayne/White Plains, NY-NJ................. 9,240
78. New Orleans, LA.................................... 1,212
79. Wilmington, DE-NJ.................................. 543
80. Buffalo/Cheektowaga/Tonawanda, NY.................. 960
81. Poughkeepsie/Newburgh/Middletown, NY............... 446
82. Providence/New Bedford, RI......................... 816
83. Portland/Vancouver/Beaverton, OR-WA................ 1,474
84. Rochester, NY...................................... 695
85. Wichita, KS........................................ 343
86. Greensboro/Highpoint, NC........................... 405
87. San Francisco, CA.................................. 940
88. Albany/Schenectady/Troy, NY........................ 449
89. Albuquerque, NM.................................... 387
90. Birmingham/Hoover, AL.............................. 451
91. Norfolk/Virginia Beach/Newport News, VA............ 580
92. Charleston, SC..................................... 254
93. Columbia, SC....................................... 279
94. Richmond, VA....................................... 448
95. Syracuse, NY....................................... 249
96. Allentown/Bethlehem/Easton, PA..................... 204
97. Honolulu, HI....................................... 197
98. Baton Rouge, LA.................................... 147
99. McAllen/Edinburg/Pharr, TX......................... 106
100. Greenville, SC..................................... 79
------------------------------------------------------------------------
Mr. AL GREEN of Texas. Mr. Chairman, I yield 1 minute to the
gentleman from North Carolina (Mr. Miller).
Mr. MILLER of North Carolina. Mr. Chairman, I simply want to correct
something I said earlier today. Earlier today I said the Mortgage
Bankers Association was opposed to this bill. That is not correct. They
do not support the bill. In a letter dated today, they outlined four
areas of major concern with the bill, but they did not oppose the bill.
They did not support the bill, but they did not oppose it. So what I
said earlier today, it was incorrect.
Mr. AL GREEN of Texas. Mr. Chairman, I would like to yield 1 minute
to Mrs. Stephanie Tubbs Jones, please.
(Mrs. JONES of Ohio asked and was given permission to revise and
extend her remarks.)
Mrs. JONES of Ohio. Mr. Chairman, there is a God. For the past 8
years I have introduced legislation called the Predatory Lending
Reduction Act, saying to the community and the world that there is a
problem happening out here. And here we are in 2007, some 8 years
later, and there is a wake-up call going on.
Across the country, people are having problems with their mortgages
and communities are losing tax underwriting as a result thereof. I am
pleased that H.R. 3915 incorporates language from the Predatory Lending
Reduction Act that I introduced 8 years ago and that it requires a
licensing and registration for mortgage brokers.
We all know that all subprime lenders are not predatory lenders, but
we also know that all predatory lenders are subprime lenders, and we
have to get on top of this.
Thank God we are saving the people of America.
Mr. AL GREEN of Texas. Mr. Chairman, I would simply close by
indicating I am very pleased to see the bipartisan effort that has been
generated by this bill. This is a good bill, and I ask all of my
colleagues to please support it.
Mr. Chairman, I yield back the balance of my time.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentleman from Texas (Mr. Al Green).
The amendment was agreed to.
Amendment No. 15 Offered by Mr. McHenry
The Acting CHAIRMAN. It is now in order to consider amendment No. 15
printed in House Report 110-450.
Mr. McHENRY. Mr. Chairman, I offer an amendment.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 15 offered by Mr. McHenry:
Page 80, strike line 1 and all that follows through page
102, line 26 (all of title III) (and redesignate the
subsequent title and sections and conform the table of
contents accordingly).
The Acting CHAIRMAN. Pursuant to House Resolution 825, the gentleman
from North Carolina (Mr. McHenry) and a Member opposed each will
control 5 minutes.
The Chair recognizes the gentleman from North Carolina.
Mr. McHENRY. Mr. Chairman, the amendment I offer today is really the
crux of this debate that we are having here on the House floor on how
to best take on the mortgage crisis that we are facing as a country.
This is a very substantive debate. I think it is a very legitimate
debate for the House to have, about how we approach the mortgage
marketplace and ensure that individuals, families, can still access
credit so they can actually get a home for themselves and their
children.
Now, the issue at hand is title III of the bill, the so-called North
Carolina standard, put forward by my colleagues from North Carolina,
Mr. Watt and Mr. Miller. What, in essence, they do is make all subprime
loans HOEPA loans. These are really high-cost loans, so-called
innovative loans.
What this does is make all subprime loans HOEPA loans, and, as the
Comptroller of the Currency said in a recent hearing before the
Financial Services Committee, ``It is fair to say that in the past
HOEPA loans were viewed as so extreme that few institutions provided
HOEPA loans because it was such a rigorous and, what is the word, a
scarlet letter of sorts that people wouldn't make the loans. So when
you look at our home loan registry, for example, you don't find many
HOEPA loans anymore.''
Well, there were 10 million mortgages let in 2006. Only 15,200 were
HOEPA loans. A very small percentage.
In essence, what title III of this bill does is it, in essence,
eliminates the subprime marketplace in America. What it does in North
Carolina, it has curtailed refinancing and initial financing in the
subprime marketplace. This is very harmful to individuals and families.
With that, I encourage my colleagues to vote for this amendment.
Mr. Chairman, I reserve the balance of my time.
Mr. MILLER of North Carolina. Mr. Chairman, I claim the time in
opposition.
The Acting CHAIRMAN. The gentleman is recognized for 5 minutes.
Mr. MILLER of North Carolina. Mr. Chairman, title III hardly turns
all subprime loans into HOEPA loans. HOEPA loans are very high-cost
loans, loans with a very high interest rate. For first loans, it is 8
percent above the Treasury rate, which works out to about 13 percent.
Or for subordinate loans, second or third mortgages, it is 10 percent
above, which is more like a 15 percent interest rate.
In contrast, this legislation before us, the other provisions of the
legislation, the other titles, treats the subprime loans as loans with
an interest rate of about 8.5. So there is plenty of room between 8.5
or 13 or 15.
Mr. Chairman, it is simply not true that this legislation in North
Carolina has created a problem with lending in North Carolina. We have
heard it again and again in the Financial Services Committee for 4 or 5
years. We have heard repeatedly testimony by the North Carolina
Commissioner of Banks, Joe Smith, who has said there is a ready
availability of credit in the subprime market in North Carolina, and
that it is no more expensive than it is anywhere else that he knows of.
We have heard from witnesses from industry who have said repeatedly
they have been able to lend in North Carolina on the same terms and at
the same rates as everywhere else, and they have been able to do so
profitably.
There was a business school study at the University of North Carolina
that said there has been no difference in the
[[Page H14030]]
availability or the cost of credit in the subprime market in North
Carolina because of the protections of the North Carolina law. A Morgan
Stanley survey of 280 subprime branch managers said there had been no
reduction in subprime lending in North Carolina as a result of these
consumer protections. And it just goes on.
In the time between 1998 before the North Carolina law was enacted
and went into effect in 2003, there was a 366 percent growth in
subprime lending in North Carolina. It is sort of hard to see from that
that the North Carolina law killed off subprime lending.
What it did do is it protects consumers from equity stripping, from
having huge chunks of their equity in their home, their life savings,
taken from them at closing by outrageous up-front costs and fees, many
of which were poorly disclosed.
This lowers the trigger for a HOEPA loan from 8 points at closing to
5 points at closing and closes some of the loopholes so that consumers,
when they have to borrow money against their home, are not going to
have their equity stripped, are not going to have their life savings,
the equity in their home, taken from them.
Mr. Chairman, I reserve the balance of my time.
Mr. McHENRY. Mr. Chairman, let me quote Congressman Miller from our
recent subprime markup in Financial Services. ``Yes, there are fewer
loans being made in North Carolina,'' is the reference. ``That is also
an intended consequence of reform. This is the heart of the bill.''
The statistics for North Carolina, amongst subprime lenders there is
a decline of 8.1 percent in the last 5 years. In comparison States,
there was a growth of 1 percent of prime lending. In comparison States,
loans by subprime lenders increased by 4.6 percent, and loans made in
North Carolina decreased, subprime loans, by 8.1 percent. There is a
significant disparity there.
Furthermore, in refinancing in subprime loans in North Carolina,
there was a decline of 11.4 percent. In comparable States, there was an
increase of 4 percent.
It shows that there are fewer loans being made and less availability
of credit in North Carolina because of the so-called North Carolina
standard.
Mr. Chairman, I reserve the balance of my time.
Mr. MILLER of North Carolina. Mr. Chairman, I have the right to
close, so I think I will wait until Mr. McHenry is done.
The Acting CHAIRMAN. The gentleman reserves the balance of his time.
Mr. McHENRY. Mr. Chairman, I would inform my colleague I have the
right to close.
Mr. MILLER of North Carolina. Only one of us is right.
The Acting CHAIRMAN. The gentleman from North Carolina (Mr. Miller)
has the right to close.
Mr. McHENRY. Two additional points on my amendment here. It strikes
title III, which bans rolling closing costs, points and fees into the
financing of subprime mortgages, as well as eliminating prepayment
penalties. So if someone currently has a prepayment penalty and they
want to get out of this high-cost mortgage they currently have, and
they seek to refinance their way into a more affordable mortgage, they
would be prevented from rolling that prepayment penalty into the next
loan.
So my contention is title III of this bill eliminates people's
options and opportunities to refinance their way out of foreclosure and
default.
So I would encourage my colleagues to vote for my amendment to strike
I think the most egregious title within this bill.
Mr. Chairman, I reserve the balance of my time.
Mr. MILLER of North Carolina. Mr. Chairman, I reserve the balance of
my time.
Parliamentary Inquiry
Mr. McHENRY. Mr. Chairman, I have a parliamentary inquiry.
The Acting CHAIRMAN. The gentleman will state it.
Mr. McHENRY. Who has the right to close on an amendment? Is it those
opposed to it or those who are offering the amendment?
The Acting CHAIRMAN. When the Member claiming time in opposition
hails from the committee of jurisdiction, he has the right to close.
The gentleman from North Carolina has 1 minute remaining.
Mr. McHENRY. Thank you, Mr. Chairman.
Let me tell you one story in North Carolina. Ben Ingle is a mortgage
broker at NBI Mortgage in Shelby, North Carolina. Ben was able to
secure a loan for a woman who was a victim of domestic violence and a
victim of her ex-husband's bad credit. Her ex-husband ruined her
credit. In this process, she got out of an abusive relationship and
wanted to have a home for her son and herself, but she had a tough time
because of her credit situation.
Well, Ben was able to work with her over an extended period of time.
In fact, when it was all said and done, under this legislation before
us today, Ben would have been only able to make $4.16 an hour for the
work that he did for this lady to qualify her for a loan.
{time} 1645
Now, she is very happy to be in a loan today and have a mortgage
today and have a home for her son. But what this bill does is harm our
communities and I think our mortgage brokers that are doing the right
thing.
At the end of the day, mortgage originators are a part of our
community. They are community leaders oftentimes, and what we are
trying to do is battle unscrupulous actors and have good protections
for homeownership in America.
Title III of this bill would prevent this young lady from having the
option to get the lending she needed for a home. This is about
homeownership. I urge Members to vote for my amendment and vote against
the bill.
Mr. MILLER of North Carolina. Mr. Chairman, the woman from Shelby
would be able to borrow under this bill, it just would be a highly
regulated loan, only if she is paying more than 13 percent interest or
paying more than 5 percent in closing costs, which is a lot in closing
costs.
Mr. McHenry really got at what is wrong with predatory lending when
he said that people need to be able to refinance to pay off the loans
they are in now.
That is not the kind of mortgage system we want. We don't want people
refinancing to pay off the loan they are in now and pay the prepayment
penalties on this loan and pay points and fees for the next loan, and
then 2 years later doing it all over again. We don't want people in a
cycle of borrowing and borrowing again. We want people to get into
loans that they can pay off. They can pay month after month, and at
some point have a ceremony, a little party, that people in another
generation had of burning the mortgage because it is paid off. So for
the rest of their lives, they will own their home free and clear.
Predatory lending traps people in a cycle of borrowing and borrowing
again. That is something that North Carolina law successfully dealt
with. If there was some slight dip in overall loans, it is because
people weren't caught in a cycle of borrowing to pay off the last
mortgage and then having to borrow 2 years from now to pay off the
mortgage they are entering today.
It ends flipping of loans to generate fees for everybody else in the
system who is getting rich off the middle class, off the middle-class
homeowners. The North Carolina law is working fine for North Carolina.
It will work fine for the rest of us. It has been the model for most of
the States that have had their own predatory lending legislation,
consumer protection legislation in the last few years. Keep title III
in this bill.
Mr. Chairman, I yield back the balance of my time.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentleman from North Carolina (Mr. McHenry).
The question was taken; and the Acting Chairman announced that the
noes appeared to have it.
Mr. McHENRY. Mr. Chairman, I demand a recorded vote.
The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from North
Carolina will be postponed.
Amendment No. 17 Offered by Mr. Van Hollen
The Acting CHAIRMAN. It is now in order to consider amendment No. 17
printed in House Report 110-450.
[[Page H14031]]
Mr. VAN HOLLEN. Mr. Chairman, I offer an amendment.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 17 offered by Mr. Van Hollen:
Page 71, line 5, strike the closing quotation marks and the
second period.
Page 71, after line 5, insert the following new subsection:
``(m) Closing Costs.--In the case of a residential mortgage
loan, any costs incurred in connection with the consummation
of the loan may not exceed by more than 10 percent the
estimate of the amount of such costs disclosed to the
consumer in advance of the consummation of the loan.''.
The Acting CHAIRMAN. Pursuant to House Resolution 825, the gentleman
from Maryland (Mr. Van Hollen) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Maryland.
Mr. VAN HOLLEN. Mr. Chairman, let me begin by commending the chairman
of the Financial Services Committee, Mr. Frank, and the ranking member,
Mr. Bachus, for crafting a bill that is before us today to help protect
homeowners across the country and to stop predatory lending.
The amendment I am proposing is designed to protect consumers from
bait-and-switch schemes perpetrated by a small number of unscrupulous
lenders who have learned to exploit flaws in the existing system. Under
the existing law we have today, lenders are required to provide
homeowners with a good-faith estimate of their settlement costs, the
costs they will have when they settle on a transaction.
However, under current law there is absolutely no penalty for lenders
who are widely off in providing those estimates. We have many cases
where you have a few bad actors who lure consumers to borrow by low-
balling their estimate of closing costs only to jack-up those costs
when it comes to the last minute at the settlement table.
This amendment would address this problem by saying that in the case
of residential mortgage loans, the amount of closing costs may not
exceed by more than 10 percent any estimate of the closing cost
provided to the consumer in advance of closing. By setting that kind of
ceiling, we reduce the chance that borrowers will be blind-sided by
unexpected fees at closing.
The intent of this amendment is to protect consumers from negligent
or fraudulent lenders and introduce greater confidence and certainty
into the process.
Mr. Chairman, as currently drafted, I believe this amendment is too
broad. We need to make sure we hold lenders accountable for estimates
that are within their control, not those estimates that may be outside
of their control. In a moment I am going to move to withdraw the
amendment.
But before that, I would like to yield to the chairman of the
committee.
Mr. FRANK of Massachusetts. I thank the gentleman from Maryland.
This is a very complicated subject. It involves a number of moving
parts.
At every stage, and we said this from the beginning, at every stage
in this bill, from the bill's introduction to the hearing to the markup
to now, it has been improved. No one really knew enough. We are in a
somewhat unknown area.
I would also say ultimately, I think, if we're going to get any
legislation here, as I said before, we are going to get a bill that no
single Member of this House likes in every particular because we are
going to have to work together.
The gentleman from Maryland has identified one more area where we
believe improvement can go forward. It is a subject that has to be
refined some. This is the end of the session. We are getting
legislation drafted. It can't always be done as carefully as we would
like.
I appreciate the gentleman calling this to our attention; and in the
bipartisanship spirit we have had, I believe we can continue to work on
this, and by the time this bill is finally ready to be signed, we can
include the thrust of what the gentleman is trying to accomplish.
Mr. BACHUS. Mr. Chairman, will the gentleman yield?
Mr. VAN HOLLEN. I yield to the gentleman from Alabama.
Mr. BACHUS. Mr. Chairman, we have discussed this amendment, and I
acknowledge that the gentleman brings up a valid point. It is something
that we will continue to adjust as the process goes forward.
Mr. VAN HOLLEN. Mr. Chairman, I thank Mr. Bachus and the chairman of
the committee as well. I appreciate your willingness to work on this
issue as we go forward.
Mr. Chairman, I ask unanimous consent that the amendment be
withdrawn.
The Acting CHAIRMAN. Without objection, the amendment is withdrawn.
There was no objection.
Amendment No. 18 Offered by Ms. Sutton
The Acting CHAIRMAN. It is now in order to consider amendment No. 18
printed in House Report 110-450.
Ms. SUTTON. Mr. Chairman, I offer an amendment.
The Acting CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 18 offered by Ms. Sutton:
After section 211, insert the following new section (and
redesignate the subsequent sections accordingly):
SEC. 212. 6-MONTH NOTICE REQUIRED BEFORE RESET OF HYBRID
ADJUSTABLE RATE MORTGAGES.
(a) In General.--Chapter 2 of the Truth in Lending Act (15
U.S.C. 1631 et seq.) is amended by inserting after section
128 the following new section:
``Sec. 128A. Reset of hybrid adjustable rate mortgages
``(a) Hybrid Adjustable Rate Mortgages Defined.--For
purposes of this section, the term `hybrid adjustable rate
mortgage' means a consumer credit transaction secured by the
consumer's principal residence with a fixed interest rate for
an introductory period that adjusts or resets to a variable
interest rate after such period.
``(b) Notice of Reset and Alternatives.--During the 1-month
period that ends 6 months before the date on which the
interest rate in effect during the introductory period of a
hybrid adjustable rate mortgage adjusts or resets to a
variable interest rate, the creditor or servicer of such loan
shall provide a written notice, separate and distinct from
all other correspondence to the consumer, that includes the
following:
``(1) Any index or formula used in making adjustments to or
resetting the interest rate and a source of information about
the index or formula.
``(2) An explanation of how the new interest rate and
payment would be determined, including an explanation of how
the index was adjusted, such as by the addition of a margin.
``(3) A good faith estimate, based on accepted industry
standards, of the creditor or servicer of the amount of the
monthly payment that will apply after the date of the
adjustment or reset, and the assumptions on which this
estimate is based.
``(4) A list of alternatives consumers may pursue before
the date of adjustment or reset, and descriptions of the
actions consumers must take to pursue these alternatives,
including--
``(A) refinancing;
``(B) renegotiation of loan terms;
``(C) payment forbearances; and
``(D) pre-foreclosure sales.
``(5) The names, addresses, telephone numbers, and Internet
addresses of counseling agencies or programs reasonably
available to the consumer that have been certified or
approved and made publicly available by the Secretary of
Housing and Urban Development or a State housing finance
authority (as defined in section 1301 of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989).
``(6) The address, telephone number, and Internet address
for the State housing finance authority (as so defined) for
the State in which the consumer resides.''.
(b) Clerical Amendment.--The table of sections for chapter
2 of the Truth in Lending Act is amended by inserting after
the item relating to section 128 the following new item:
``128A. Reset of hybrid adjustable rate mortgages.''.
The Acting CHAIRMAN. Pursuant to House Resolution 825, the
gentlewoman from Ohio (Ms. Sutton) and a Member opposed each will
control 5 minutes.
The Chair recognizes the gentlewoman from Ohio.
Ms. SUTTON. Mr. Chairman, first of all I would like to commend the
chairman of the Financial Services Committee for his extraordinary
leadership and hard work on this legislation. I also want to thank the
ranking member, Mr. Bachus, along with Mr. Frank for their
extraordinary hard work. I also extend my thanks to Mr. Miller, the
sponsor of this bill, as well.
Today I rise to offer an amendment to H.R. 3915 that I believe will
take an important step in preventing avoidable foreclosures. The news
stories we see every day remind us that this subprime mortgage crisis
is not going away immediately. In fact, it is getting worse.
[[Page H14032]]
RealtyTrac just released its third quarter foreclosure numbers, and
the numbers are staggering. Foreclosure filings increased 30 percent
nationally from the second quarter, which translates to one foreclosure
filing for every 196 American households.
Two of the largest metro areas in my district are among the 15 with
the highest foreclosure rates nationally. Foreclosures in the
Cleveland, Lorain, Elyria area are up 179 percent from last year. One
in every 57 homes in that area is in foreclosure. In Akron, it is one
of every 76. These are families in my district who are suffering.
Many of the loans involved in the current subprime mortgage crisis
are hybrid adjustable rate mortgages. Though these loans typically
begin with a low fixed ``teaser'' rate, it resets after 2 or 3 years,
often to as much as two or three times the original payment.
According to a recently conducted survey, one in four homeowners with
adjustable rate mortgages were not aware how soon their rates could
spike, and three-quarters did not know how much their payments might
increase.
A homeowner who does not know what is coming may not be able to ask
for help until it is too late. The amendment I am offering today would
take a simple step to help ensure homeowners have the opportunity to
pursue all of the options available to them before the foreclosure
becomes inevitable.
My amendment, which is based on a recommendation of the Ohio
Foreclosure Prevention Task Force, will require lenders to send a
notice to homeowners holding hybrid adjustable rate mortgages 6 months
before their interest rates are due to reset. The notice will contain
four key pieces of information:
It will include the new interest rate and an explanation of how it
will be determined;
Second, it will require the lender to include a good-faith estimate
of the monthly payment that will apply after the loan resets;
Third, it contains a list of alternatives the consumer may pursue
before the date of the adjustment or reset if they feel they will have
difficulty in meeting the payment obligations;
Finally, it will include the contact information of the local HUD-
approved housing counseling agencies, as well as the State housing
finance authority for the State in which the consumer resides.
Enhanced disclosures will help prevent avoidable foreclosures and
ensure our families are not caught by surprise and trapped in a
position that may ultimately force them out of their homes. I believe
this disclosure is a vital tool for our families, and I urge a ``yes''
vote on this amendment.
Mr. FRANK of Massachusetts. Mr. Chairman, will the gentlewoman yield?
Ms. SUTTON. I yield to the gentleman from Massachusetts.
Mr. FRANK of Massachusetts. I want to thank the gentlewoman. She has
been very diligent and called to the attention of the committee some of
the concerns of the Attorney General of Ohio, with whom she has been
working, as have her other Ohio colleagues. I appreciate this
particular amendment and also the willingness of the gentlewoman to
work with us as we continue to make this a better bill. I hope her
amendment is adopted.
Ms. SUTTON. Mr. Chairman, I reserve the balance of my time.
Mr. BACHUS. Mr. Chairman, I would like to claim the time in
opposition.
The Acting CHAIRMAN. The gentleman from Alabama is recognized for 5
minutes.
Mr. BACHUS. Mr. Chairman, the gentlewoman from Ohio obviously points
out a significant problem with foreclosures in Cleveland. It is
actually a heart-breaking experience that the people of Cleveland are
going through when one out of every five or six houses are undergoing
foreclosures. You hear some pretty devastating figures. I know, I used
to be an attorney for the FOP, Fraternal Order of Police, in
Birmingham; and there is absolutely nothing more problematic in a
community than a vacant house from a crime standpoint as well as from a
property value standpoint.
The notice she requires, I think some of that is addressed by Mr.
Green and Mr. McHenry, but it is at an earlier time. I would say this,
I personally am not going to ask for a roll call on this.
Going forward, I think parts of this amendment are very good. I think
stating what the new interest rate will be, giving somebody a notice.
The Federal Reserve said some folks sort of, you know, this is
something that they don't always see or focus on. But explaining what
the new interest rate is going to be and how it is going to be
determined, that could be somewhat problematic, but it could be worked
in a range as long as the regulators are given some discretion.
Offering the borrower the best estimate of what the new monthly payment
will be could also, as long as there was some range or discretion in
there.
The last two things I think are very good, offering alternatives that
the consumer could pursue. That might be very valuable, as would
providing information on HUD-approved house counseling. I think that
would be very valuable. I personally am not going to ask for a roll
call on this. Other Members might.
Mr. Chairman, at this time I yield the balance of my time to the
gentleman from Florida because, as you know, on this side, as with this
whole body, we come with different perspectives.
Mr. FEENEY. Mr. Chairman, I appreciate the ranking member yielding on
this.
Everybody deserves as much notice as possible when their obligations
in life are going to change. Every mortgage describes the terms of how
the note and the loan will change.
One of the problems I see with this bill is when you are required to
give a borrower 6-months' notice on what their interest rate is going
to be, my understanding is that some mortgages are triggered off dates
that may be only 3 or 4 months in advance of the reset date. For
example, does a lender have to guess high? Does a lender have to
estimate 3 or 4 months out rates are going to go up so they are going
to basically send the borrower notice 6 or 7 or 8 months ahead of time
so they comply with this very burdensome notice regulation, and they
are basically going to stick a borrower, perhaps, with a higher
interest rate if the market actually lets interest rates come down than
they would have otherwise been able to do.
{time} 1700
I don't know whether you have to send a new notice or an adjusted
notice also in terms of the alternatives that we have to describe.
There are lots of alternatives if you are going to have trouble making
your mortgage payment. You could hit the lottery, I suppose. You could
hope that a rich uncle passes away and endows you. There are all sorts
of potential alternatives.
Now, if we had a form list of three or four potential things that a
borrower could do, that might make sense. But I think this is very
subjective.
And speaking of the subjectivity, something I wanted to get to
earlier, one of the big problems with this bill is that it has all
sorts of subjective requirements, for example, that lenders cannot make
loans that are not the most appropriate loans. Who knows, other than
20/20 hindsight, whether a loan was appropriate in specific
circumstances? Supposing that a family gets divorced? A loan that might
have been appropriate one day may be inappropriate. Suppose somebody
loses their job or gets sick?
And the other huge subjective part of this entire bill is the net
tangible benefits test. Supposing I go take out a loan for $100,000. I
decide to go down and decide to play the ponies and I win a 10:1
payment, I become a millionaire. Well, that loan after the fact turned
out to have huge net tangible benefits to me.
On the other hand, supposing I take out a $100,000 loan and put it in
investments in the stock market and the market gets jittery because
Congress is talking about all sorts of tax hikes. Supposing my stocks
decrease from $100,000 to $50,000. Well, it turns out after the fact
that my taking out that loan to put the money in the stock market did
not have much net tangible benefit.
These subjective tests are a nightmare for people trying to provide
credit in America.
Ms. SUTTON. I would inquire how much time I have remaining.
The Acting CHAIRMAN (Mr. Holden). The gentlewoman from Ohio has 1\1/
2\ minutes remaining.
[[Page H14033]]
Ms. SUTTON. Mr. Chairman, requiring lenders and servicers to include
their best estimate of the amount that will be incurred when the loan
resets is a commonsense way to deal with providing these borrowers with
information that is essential if they are in a position to avoid
foreclosure, and all we are asking under this amendment is for a good-
faith estimate based on accepted industry standards.
The estimate need not be exact. A lender or servicer simply needs to
make a good-faith effort to estimate the payment that will apply after
reset.
It is important to keep consumers informed about the date of reset,
but if they are not sure what they will face when the loan resets, it
will be much more difficult for them to prepare what is coming. This is
a simple requirement to insure that not only will homeowners know when
this will happen, but also what will happen.
I appreciate greatly the remarks of the ranking member, Mr. Bachus,
and of course the support of the chairman of the Financial Services
Committee.
I yield back the balance of my time.
The Acting CHAIRMAN. The question is on the amendment offered by the
gentlewoman from Ohio (Ms. Sutton).
The amendment was agreed to.
Announcement by the Acting Chairman
The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, proceedings
will now resume on those amendments printed in House Report 110-450 on
which further proceedings were postponed, in the following order:
Amendment No. 16 by Mr. Price of Georgia.
Amendment No. 12 by Mr. Garrett of New Jersey.
Amendment No. 15 by Mr. McHenry of North Carolina.
The Chair will reduce to 2 minutes the time for any electronic vote
after the first vote in this series.
Amendment No. 16 Offered by Mr. Price of Georgia
The Acting CHAIRMAN. The unfinished business is the demand for a
recorded vote on the amendment offered by the gentleman from Georgia
(Mr. Price) on which further proceedings were postponed and on which
the noes prevailed by voice vote.
The Clerk will redesignate the amendment.
The Clerk redesignated the amendment.
Recorded Vote
The Acting CHAIRMAN. A recorded vote has been demanded.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 172,
noes 249, not voting 16, as follows:
[Roll No. 1114]
AYES--172
Aderholt
Alexander
Bachmann
Bachus
Baker
Barrett (SC)
Bartlett (MD)
Barton (TX)
Biggert
Bilbray
Bilirakis
Bishop (UT)
Blackburn
Boehner
Bonner
Boozman
Boustany
Brady (TX)
Broun (GA)
Brown (SC)
Brown-Waite, Ginny
Buchanan
Burgess
Burton (IN)
Buyer
Camp (MI)
Campbell (CA)
Cannon
Cantor
Carter
Castle
Chabot
Coble
Cole (OK)
Conaway
Crenshaw
Culberson
Davis, David
Davis, Tom
Deal (GA)
Dent
Diaz-Balart, L.
Diaz-Balart, M.
Doolittle
Drake
Dreier
Duncan
Emerson
Fallin
Feeney
Ferguson
Flake
Forbes
Fortenberry
Fossella
Foxx
Franks (AZ)
Frelinghuysen
Garrett (NJ)
Gerlach
Gilchrest
Gingrey
Gohmert
Goode
Goodlatte
Granger
Graves
Hall (TX)
Hastert
Hastings (WA)
Hayes
Heller
Hensarling
Herger
Hobson
Hoekstra
Hunter
Inglis (SC)
Issa
Johnson (IL)
Johnson, Sam
Jordan
Keller
King (IA)
King (NY)
Kingston
Kirk
Kline (MN)
Knollenberg
Kuhl (NY)
LaHood
Lamborn
Latham
Lewis (KY)
Linder
Lucas
Lungren, Daniel E.
Manzullo
Marchant
McCarthy (CA)
McCaul (TX)
McCotter
McCrery
McHenry
McKeon
McMorris Rodgers
Mica
Miller (FL)
Miller (MI)
Moran (KS)
Murphy, Tim
Musgrave
Myrick
Neugebauer
Nunes
Pearce
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Poe
Porter
Price (GA)
Pryce (OH)
Putnam
Radanovich
Ramstad
Regula
Rehberg
Reichert
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Roskam
Royce
Ryan (WI)
Sali
Schmidt
Sensenbrenner
Sessions
Shadegg
Shimkus
Shuster
Simpson
Smith (NE)
Smith (TX)
Souder
Stearns
Sullivan
Tancredo
Terry
Thornberry
Tiahrt
Tiberi
Upton
Walberg
Walden (OR)
Walsh (NY)
Wamp
Weldon (FL)
Westmoreland
Whitfield
Wicker
Wilson (SC)
Young (AK)
Young (FL)
NOES--249
Abercrombie
Ackerman
Allen
Altmire
Andrews
Arcuri
Baca
Baird
Baldwin
Barrow
Bean
Becerra
Berkley
Berman
Berry
Bishop (GA)
Bishop (NY)
Blumenauer
Bordallo
Boren
Boswell
Boucher
Boyd (FL)
Boyda (KS)
Brady (PA)
Braley (IA)
Brown, Corrine
Butterfield
Calvert
Capito
Capps
Capuano
Cardoza
Carnahan
Carney
Castor
Chandler
Christensen
Clarke
Clay
Cleaver
Clyburn
Cohen
Conyers
Cooper
Costa
Costello
Courtney
Cramer
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (IL)
Davis, Lincoln
DeFazio
DeGette
Delahunt
DeLauro
Dicks
Dingell
Doggett
Donnelly
Edwards
Ehlers
Ellison
Ellsworth
Emanuel
Engel
English (PA)
Eshoo
Etheridge
Faleomavaega
Farr
Fattah
Filner
Frank (MA)
Gallegly
Giffords
Gillibrand
Gonzalez
Gordon
Green, Al
Green, Gene
Grijalva
Gutierrez
Hall (NY)
Hare
Harman
Hastings (FL)
Herseth Sandlin
Higgins
Hill
Hinchey
Hinojosa
Hirono
Hodes
Holden
Holt
Honda
Hooley
Hoyer
Hulshof
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson (GA)
Johnson, E. B.
Jones (NC)
Jones (OH)
Kagen
Kanjorski
Kaptur
Kennedy
Kildee
Kilpatrick
Kind
Klein (FL)
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
LaTourette
Lee
Levin
Lewis (CA)
Lewis (GA)
Lipinski
LoBiondo
Loebsack
Lofgren, Zoe
Lowey
Lynch
Mahoney (FL)
Maloney (NY)
Markey
Marshall
Matheson
Matsui
McCarthy (NY)
McCollum (MN)
McDermott
McGovern
McHugh
McIntyre
McNerney
McNulty
Meek (FL)
Meeks (NY)
Melancon
Michaud
Miller (NC)
Miller, Gary
Miller, George
Mitchell
Mollohan
Moore (KS)
Moore (WI)
Moran (VA)
Murphy (CT)
Murphy, Patrick
Murtha
Nadler
Napolitano
Neal (MA)
Norton
Obey
Olver
Ortiz
Pallone
Pascrell
Pastor
Payne
Perlmutter
Peterson (MN)
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Richardson
Rodriguez
Ross
Rothman
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Saxton
Schakowsky
Schiff
Schwartz
Scott (GA)
Scott (VA)
Serrano
Sestak
Shays
Shea-Porter
Sherman
Shuler
Sires
Skelton
Slaughter
Smith (NJ)
Smith (WA)
Snyder
Solis
Space
Spratt
Stark
Stupak
Sutton
Tanner
Tauscher
Taylor
Thompson (CA)
Thompson (MS)
Tierney
Towns
Tsongas
Turner
Udall (CO)
Udall (NM)
Van Hollen
Visclosky
Walz (MN)
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Welch (VT)
Wexler
Wilson (NM)
Wilson (OH)
Wolf
Woolsey
Wu
Wynn
Yarmuth
NOT VOTING--16
Akin
Blunt
Bono
Carson
Cubin
Davis (KY)
Doyle
Everett
Fortuno
Jindal
Kucinich
Mack
Oberstar
Paul
Velazquez
Weller
{time} 1724
Mrs. McCARTHY of New York and Messrs. CLEAVER, MORAN of Virginia and
TURNER changed their vote from ``aye'' to ``no.''
Messrs. BAKER and BROWN of South Carolina changed their vote from
``no'' to ``aye.''
So the amendment was rejected.
The result of the vote was announced as above recorded.
Amendment No. 12 Offered by Mr. Garrett of New Jersey
The Acting CHAIRMAN. The unfinished business is the demand for a
recorded vote on the amendment offered by the gentleman from New Jersey
(Mr. Garrett) on which further proceedings were postponed and on which
the noes prevailed by voice vote.
The Clerk will redesignate the amendment.
The Clerk redesignated the amendment.
Recorded Vote
The Acting CHAIRMAN. A recorded vote has been demanded.
A recorded vote was ordered.
The Acting CHAIRMAN. This will be a 2-minute vote.
The vote was taken by electronic device, and there were--ayes 188,
noes 229, not voting 20, as follows:
[Roll No. 1115]
AYES--188
Aderholt
Alexander
Bachmann
Bachus
Baker
Barrett (SC)
[[Page H14034]]
Bartlett (MD)
Barton (TX)
Biggert
Bilbray
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehner
Bonner
Boozman
Boustany
Brady (TX)
Broun (GA)
Brown (SC)
Brown-Waite, Ginny
Buchanan
Burgess
Burton (IN)
Buyer
Calvert
Camp (MI)
Campbell (CA)
Cannon
Cantor
Capito
Carney
Carter
Castle
Chabot
Coble
Cole (OK)
Conaway
Crenshaw
Culberson
Davis (KY)
Davis, David
Davis, Tom
Deal (GA)
Dent
Diaz-Balart, L.
Diaz-Balart, M.
Doolittle
Drake
Dreier
Duncan
Ehlers
Emerson
English (PA)
Fallin
Feeney
Ferguson
Flake
Forbes
Fortenberry
Fossella
Foxx
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gerlach
Gingrey
Gohmert
Goode
Goodlatte
Granger
Graves
Hall (TX)
Hastert
Hastings (WA)
Hayes
Heller
Hensarling
Herger
Hobson
Hoekstra
Hulshof
Hunter
Inglis (SC)
Issa
Johnson (IL)
Johnson, Sam
Jones (NC)
Jordan
Keller
King (IA)
King (NY)
Kingston
Kirk
Kline (MN)
Knollenberg
Kuhl (NY)
LaHood
Lamborn
Latham
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas
Lungren, Daniel E.
Manzullo
Marchant
McCarthy (CA)
McCaul (TX)
McCotter
McCrery
McHenry
McKeon
McMorris Rodgers
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Moran (KS)
Murphy, Tim
Musgrave
Myrick
Neugebauer
Nunes
Pearce
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Poe
Porter
Price (GA)
Pryce (OH)
Putnam
Ramstad
Regula
Rehberg
Reichert
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Roskam
Royce
Ryan (WI)
Sali
Saxton
Schmidt
Sensenbrenner
Sessions
Shadegg
Shays
Shimkus
Shuster
Simpson
Smith (NE)
Smith (TX)
Souder
Stearns
Sullivan
Tancredo
Terry
Thornberry
Tiahrt
Tiberi
Turner
Upton
Walberg
Walden (OR)
Walsh (NY)
Wamp
Weldon (FL)
Westmoreland
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Young (AK)
Young (FL)
NOES--229
Abercrombie
Ackerman
Altmire
Andrews
Arcuri
Baca
Baird
Baldwin
Barrow
Bean
Becerra
Berkley
Berman
Berry
Bishop (GA)
Bishop (NY)
Blumenauer
Bordallo
Boren
Boswell
Boucher
Boyd (FL)
Boyda (KS)
Brady (PA)
Braley (IA)
Brown, Corrine
Butterfield
Capps
Capuano
Cardoza
Carnahan
Castor
Chandler
Christensen
Clarke
Clay
Cleaver
Clyburn
Cohen
Conyers
Cooper
Costa
Costello
Courtney
Cramer
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (IL)
Davis, Lincoln
DeFazio
DeGette
Delahunt
DeLauro
Dicks
Dingell
Doggett
Donnelly
Edwards
Ellison
Ellsworth
Emanuel
Engel
Eshoo
Etheridge
Faleomavaega
Farr
Fattah
Filner
Frank (MA)
Giffords
Gillibrand
Gonzalez
Gordon
Green, Al
Green, Gene
Grijalva
Gutierrez
Hall (NY)
Hare
Harman
Hastings (FL)
Herseth Sandlin
Higgins
Hill
Hinchey
Hinojosa
Hirono
Hodes
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson (GA)
Johnson, E. B.
Jones (OH)
Kagen
Kanjorski
Kaptur
Kennedy
Kildee
Kilpatrick
Kind
Klein (FL)
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
LaTourette
Lee
Levin
Lewis (GA)
Lipinski
Loebsack
Lofgren, Zoe
Lowey
Lynch
Maloney (NY)
Markey
Marshall
Matheson
Matsui
McCarthy (NY)
McCollum (MN)
McDermott
McGovern
McHugh
McIntyre
McNerney
McNulty
Meek (FL)
Meeks (NY)
Melancon
Michaud
Miller (NC)
Miller, George
Mitchell
Mollohan
Moore (KS)
Moran (VA)
Murphy (CT)
Murphy, Patrick
Murtha
Nadler
Napolitano
Obey
Olver
Ortiz
Pallone
Pascrell
Pastor
Payne
Perlmutter
Peterson (MN)
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Richardson
Rodriguez
Ross
Rothman
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Schakowsky
Schiff
Schwartz
Scott (GA)
Scott (VA)
Serrano
Sestak
Shea-Porter
Sherman
Shuler
Sires
Skelton
Slaughter
Smith (NJ)
Smith (WA)
Snyder
Solis
Space
Spratt
Stark
Stupak
Sutton
Tanner
Tauscher
Taylor
Thompson (CA)
Thompson (MS)
Tierney
Towns
Tsongas
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Walz (MN)
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Welch (VT)
Wexler
Wilson (OH)
Woolsey
Wu
Wynn
Yarmuth
NOT VOTING--20
Akin
Allen
Bono
Carson
Cubin
Doyle
Everett
Fortuno
Gilchrest
Jindal
Kucinich
Mack
Mahoney (FL)
Moore (WI)
Neal (MA)
Norton
Oberstar
Paul
Radanovich
Weller
Announcement by the Acting Chairman
The Acting CHAIRMAN (during the vote). Members are advised there is 1
minute remaining in this vote.
{time} 1729
So the amendment was rejected.
The result of the vote was announced as above recorded.
Amendment No. 15 Offered by Mr. McHenry
The Acting CHAIRMAN. The unfinished business is the demand for a
recorded vote on the amendment offered by the gentleman from North
Carolina (Mr. McHenry) on which further proceedings were postponed and
on which the noes prevailed by voice vote.
The Clerk will redesignate the amendment.
The Clerk redesignated the amendment.
Recorded Vote
The Acting CHAIRMAN. A recorded vote has been demanded.
A recorded vote was ordered.
The Acting CHAIRMAN. This will be a 2-minute vote.
The vote was taken by electronic device, and there were--ayes 168,
noes 245, not voting 24, as follows:
[Roll No. 1116]
AYES--168
Aderholt
Alexander
Bachmann
Bachus
Baker
Barrett (SC)
Bartlett (MD)
Barton (TX)
Biggert
Bilbray
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehner
Bonner
Boozman
Boustany
Boyda (KS)
Brady (TX)
Broun (GA)
Brown (SC)
Brown-Waite, Ginny
Buchanan
Burgess
Burton (IN)
Buyer
Calvert
Camp (MI)
Campbell (CA)
Cannon
Cantor
Capito
Carter
Castle
Coble
Cole (OK)
Conaway
Crenshaw
Culberson
Davis (KY)
Davis, David
Davis, Tom
Diaz-Balart, L.
Diaz-Balart, M.
Doolittle
Drake
Dreier
Ehlers
Emerson
English (PA)
Fallin
Feeney
Flake
Forbes
Fortenberry
Fossella
Foxx
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gilchrest
Gingrey
Gohmert
Goode
Goodlatte
Granger
Graves
Hall (TX)
Hastert
Hastings (WA)
Hayes
Hensarling
Herger
Hobson
Hoekstra
Hulshof
Hunter
Inglis (SC)
Issa
Johnson (IL)
Johnson, Sam
Jordan
Keller
King (IA)
King (NY)
Kingston
Kirk
Kline (MN)
Knollenberg
Kuhl (NY)
LaHood
Lamborn
Latham
Lewis (CA)
Lewis (KY)
Linder
Lucas
Lungren, Daniel E.
Manzullo
McCarthy (CA)
McCaul (TX)
McCotter
McCrery
McHenry
McKeon
McMorris Rodgers
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Moran (KS)
Murphy, Tim
Musgrave
Myrick
Neugebauer
Nunes
Pearce
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Poe
Price (GA)
Pryce (OH)
Putnam
Ramstad
Regula
Rehberg
Reichert
Renzi
Reynolds
Rogers (AL)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Roskam
Royce
Sali
Schmidt
Sessions
Shadegg
Shays
Shimkus
Shuster
Simpson
Smith (NE)
Smith (TX)
Souder
Tancredo
Terry
Thornberry
Tiahrt
Tiberi
Upton
Walberg
Walden (OR)
Walsh (NY)
Wamp
Weldon (FL)
Westmoreland
Whitfield
Wicker
Wilson (SC)
Young (AK)
NOES--245
Abercrombie
Ackerman
Allen
Altmire
Andrews
Arcuri
Baca
Baird
Baldwin
Barrow
Bean
Becerra
Berkley
Berman
Berry
Bishop (GA)
Bishop (NY)
Blumenauer
Bordallo
Boren
Boswell
Boucher
Boyd (FL)
Brady (PA)
Braley (IA)
Brown, Corrine
Butterfield
Capps
Cardoza
Carnahan
Carney
Castor
Chabot
Chandler
Christensen
Clarke
Clay
Cleaver
Clyburn
Cohen
Conyers
Cooper
Costa
Costello
Courtney
Cramer
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (IL)
Davis, Lincoln
DeFazio
DeGette
Delahunt
DeLauro
Dent
Dicks
Dingell
Doggett
Donnelly
Duncan
Edwards
Ellison
Ellsworth
Emanuel
Engel
Eshoo
Faleomavaega
Farr
Fattah
Ferguson
Filner
Frank (MA)
Gerlach
Giffords
Gillibrand
Gonzalez
Gordon
Green, Al
Green, Gene
Grijalva
Gutierrez
Hall (NY)
Hare
Harman
Hastings (FL)
Herseth Sandlin
Higgins
Hill
Hinchey
Hinojosa
Hirono
Hodes
Holden
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson (GA)
Johnson, E. B.
Jones (NC)
Kagen
Kanjorski
Kaptur
Kennedy
Kildee
Kilpatrick
Kind
Klein (FL)
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
LaTourette
Lee
Levin
Lewis (GA)
Lipinski
LoBiondo
Loebsack
Lofgren, Zoe
Lowey
Lynch
Mahoney (FL)
[[Page H14035]]
Maloney (NY)
Marchant
Markey
Marshall
Matheson
Matsui
McCarthy (NY)
McCollum (MN)
McDermott
McGovern
McHugh
McIntyre
McNerney
McNulty
Meek (FL)
Meeks (NY)
Melancon
Michaud
Miller (NC)
Miller, George
Mitchell
Mollohan
Moore (KS)
Moore (WI)
Moran (VA)
Murphy (CT)
Murphy, Patrick
Murtha
Nadler
Napolitano
Neal (MA)
Obey
Olver
Ortiz
Pallone
Pascrell
Pastor
Payne
Perlmutter
Peterson (MN)
Pomeroy
Porter
Price (NC)
Rahall
Rangel
Reyes
Richardson
Rodriguez
Rogers (KY)
Ross
Rothman
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Ryan (WI)
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Saxton
Schakowsky
Schiff
Schwartz
Scott (GA)
Scott (VA)
Sensenbrenner
Serrano
Sestak
Shea-Porter
Sherman
Shuler
Sires
Skelton
Slaughter
Smith (NJ)
Smith (WA)
Snyder
Solis
Space
Stark
Stearns
Stupak
Sutton
Tanner
Tauscher
Taylor
Thompson (CA)
Thompson (MS)
Tierney
Towns
Tsongas
Turner
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Walz (MN)
Wasserman Schultz
Waters
Watson
Watt
Waxman
Welch (VT)
Wexler
Wilson (NM)
Wilson (OH)
Wolf
Woolsey
Wu
Wynn
Yarmuth
Young (FL)
NOT VOTING--24
Akin
Bono
Capuano
Carson
Cubin
Deal (GA)
Doyle
Etheridge
Everett
Fortuno
Heller
Holt
Jindal
Jones (OH)
Kucinich
Mack
Norton
Oberstar
Paul
Radanovich
Spratt
Sullivan
Weiner
Weller
Announcement by the Acting Chairman
The Acting CHAIRMAN (during the vote). Members are advised there is 1
minute remaining on this vote.
{time} 1733
So the amendment was rejected.
The result of the vote was announced as above recorded.
PERSONAL EXPLANATION
Mr. AKIN. Mr. Chairman, on rollcall Nos. 1114, 1115 and 1116, had I
been present, I would have voted ``aye'' on all 3 votes.
The Acting CHAIRMAN. The question is on the committee amendment in
the nature of a substitute, as amended.
The committee amendment in the nature of a substitute, as amended,
was agreed to.
The Acting CHAIRMAN. Under the rule, the Committee rises.
Accordingly, the Committee rose; and the Speaker pro tempore (Mr.
Ross) having assumed the chair, Mr. Holden, Acting Chairman of the
Committee of the Whole House on the State of the Union, reported that
the Committee, having had under consideration the bill (H.R. 3915) to
amend the Truth in Lending Act to reform consumer mortgage practices
and provide accountability for such practices, to establish licensing
and registration requirements for residential mortgage originators, to
provide certain minimum standards for consumer mortgage loans, and for
other purposes, pursuant to House Resolution 825, reported the bill
back to the House with an amendment adopted by the Committee of the
Whole.
The SPEAKER pro tempore. Under the rule, the previous question is
ordered.
Is a separate vote demanded on any amendment to the amendment
reported from the Committee of the Whole? If not, the question is on
the amendment.
The amendment was agreed to.
The SPEAKER pro tempore. The question is on the engrossment and third
reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
Motion to Recommit Offered by Mrs. Blackburn
Mrs. BLACKBURN. Mr. Speaker, I offer a motion to recommit.
The SPEAKER pro tempore. Is the gentlewoman opposed to the bill?
Mrs. BLACKBURN. Yes, in its current form.
The SPEAKER pro tempore. The Clerk will report the motion to
recommit.
The Clerk read as follows:
Mrs. Blackburn moves to recommit the bill H.R. 3915 to the
Committee on Financial Services with instructions to report
the same back to the House forthwith with the following
amendments:
Page 71, line 5, strike the closing quotation marks and the
second period.
Page 71, after line 5, insert the following new subsection:
``(m) Approved Identification to Obtain a Residential
Mortgage Loan.--
``(1) Verification required.--A creditor may not extend any
credit in connection with a residential mortgage loan unless
the creditor verifies the identity of an individual seeking
to obtain any such loan.
``(2) Form of identity.--A creditor may not accept, for the
purpose of verifying the identity of an individual seeking to
obtain a residential mortgage loan, any form of
identification of the individual other than the following:
``(A) Social security card with photo identification
card.--A social security card accompanied by a photo
identification card issued by the Federal Government or a
State Government.
``(B) REAL id act identification.-- A driver's license or
identification card issued by a State in the case of a State
that is in compliance with title II of the REAL ID Act of
2005 (title II of division B of Public Law 109-13; 49 U.S.C.
30301 note) other than an identification card issued under
section 202(d)(11) of such Act.
``(C) Passport.--A passport issued by the United States or
a foreign government.
``(D) USCIS photo identification card.--A photo
identification card issued by the Secretary of Homeland
Security (acting through the Director of the United States
Citizenship and Immigration Services).''.
The SPEAKER pro tempore. The gentlewoman from Tennessee is recognized
for 5 minutes.
Mrs. BLACKBURN. Mr. Speaker, we've heard a lot today about H.R. 3915
and how it is a dramatic departure from current law that I believe will
have an unintended negative impact on banks and creditworthy home
buyers.
I think it's the opinion of many in this Chamber, certainly it's my
opinion, that in an attempt to improve conditions in the housing
market, this bill instead will likely prevent more hardworking
Americans from obtaining a mortgage in a market that is already feeling
the pinch. They need more help; they do not need roadblocks.
The legislation before the House today may do more harm than good.
Yet reasonable people, which we are in this Chamber, can choose to
disagree on issues, and this is one of those where we are in
disagreement. I respect my colleagues on both sides of the aisle for
their varying positions on this legislation, but there is disagreement.
I believe most of my colleagues cannot disagree with the following
proposition, and it is this: American creditors should not be able to
extend any credit in connection with a residential mortgage loan unless
they verify the identity and legal immigration status of a potential
debtor and verify the status with only a secure ID.
Mr. Speaker, this recommittal makes good, solid common sense. The
American people do not believe that illegal immigrants and other
individuals without proper identification are entitled to the same
benefits, privileges and services as U.S. citizens and legal aliens. To
extend such benefits only reinforces their notion that the laws of this
land exist only on paper.
This motion to recommit will help preserve the faith the American
people have left with this government and show that we are serious
about denying services to those who are not entitled.
It is quite simple. The motion, number one, requires creditors to
verify the identity of an individual seeking to obtain a loan for a
residential mortgage; and, number two, prevents a creditor from
accepting, for the purpose of verification, any form of identification
other than a Social Security card with photo ID, a REAL ID
identification card, a passport, or a USCIS-issued photo ID card.
Mr. Speaker, the American people have spoken out loud and clear on
this issue. They do not believe that illegal immigrants, international
criminals, and those who may wish this Nation harm should have access
to American financial markets. That is why I had previously introduced
H.R. 1314, the Photo ID Security Act. The legislation responded to
plans and actions by firms in the financial services sector to
affirmatively target this population by accepting insecure
identification. My office was flooded with phone calls, e-mails,
letters from across the country; many included credit cards that people
had cut up in protest to their bank's decisions.
The motion to recommit adopts much of the language that was found and
cosponsored in a bipartisan basis in H.R. 1314 and will provide
American citizens the reassurance they need that the American financial
services sector is, indeed, secure. It doesn't solve all the problems
of the underlying legislation, but it is certainly a start.
[[Page H14036]]
Let's take one step forward for the security of the financial
services market, Mr. Speaker, and let's all support this motion to
recommit.
Mr. Speaker, I yield back the balance of my time.
Mr. FRANK of Massachusetts. Mr. Speaker, I rise in opposition to the
motion to recommit.
The SPEAKER pro tempore. The gentleman is recognized for 5 minutes.
Mr. FRANK of Massachusetts. We have, from time to time, debated the
issue as to whether or not we could make sure that no one who is not a
legal resident or a citizen could qualify, but that's not what we're
debating today. Let me read from page 2.
There are four kinds of identification that you must show. By the
way, the mortgage industry and the real estate industry will not like
the further paperwork here, but listen to this, lines 14 and 15, ``You
must show a passport issued by the United States or a foreign
government.'' Now, what makes anyone think that people who are in the
United States with a foreign passport are here legally? They have
foreign passports from other countries.
I think the problem is some on the other side have taken the word
``alien'' too literally, that is, they think an alien is someone who's
not from the Earth. Because someone who is in America illegally who is
from the Earth might have an Iranian passport or a Venezuelan passport
or a Burmese passport.
So understand, what I think is happening is this. I've been seeing
these a lot. I do a lot of recommits; it's a heck of a way to spend
your life, but that's my job. This foreign government passport is new.
I think what happened was this. I think the real estate industry, this
is literally my speculation, the real estate industry said to the
Republicans, Hey, wait a minute, we make a lot of money selling houses
to foreigners. Don't cut out the foreigners.
{time} 1745
But you forgot to say legal foreigners. This is what this bill says.
So you may have some Americans who don't have all this ID, who don't
have a passport, who don't live in a REAL ID State. They may not have
this. They may have a driver's license that they can use and it's not a
REAL ID State.
An American in a REAL ID State who doesn't have a passport can't make
it. But an Iranian with an Iranian passport, Welcome to my home. Here's
your mortgage.
Now, I understand the impulse to prevent illegal aliens from getting
predatory mortgages. That's a very kind thing that the Republicans want
to do for them. But they don't do it competently. Read the bill. It
says if you have a foreign passport, you qualify. You vote for this and
you will be favoring people from other countries who are here illegally
over Americans who don't have a passport and don't live in a REAL ID
State. Now, that's irrefutable.
In your desire to further the profitability of the real estate
industry, and a lot of them are my friends and I have nothing against
their profitability, but why would we want to vote for a recommit that
elevates a foreigner who has no legal right to be in the United States
and say they can qualify under this recommit, but an American who
doesn't have a passport and doesn't live in a REAL ID State, has a
driver's license and therefore didn't think they needed something, they
wouldn't qualify. So we say to Americans, if you happen to be American,
you had better get a passport and, now, it could be a Venezuelan
passport, could be a Canadian passport, we don't care where it's from,
just get a passport. I am baffled by this and I just think somebody
didn't think this one through.
The point is that this recommit says nothing about restricting the
mortgage process to people who are here only legally, because if you
really think that people who are here illegally don't have a foreign
passport, then you don't understand the situation.
So I say let's reject this effort to elevate foreign passports from
people who may be here illegally over Americans who happen to not live
in a REAL ID State and reject this recommit.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. Without objection, the previous question is
ordered on the motion to recommit.
There was no objection.
The SPEAKER pro tempore. The question is on the motion to recommit.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Recorded Vote
Mrs. BLACKBURN. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, the Chair
will reduce to 5 minutes the minimum time for any electronic vote on
the question of passage.
The vote was taken by electronic device, and there were--ayes 188,
noes 231, not voting 13, as follows:
[Roll No. 1117]
AYES--188
Aderholt
Akin
Alexander
Altmire
Bachmann
Bachus
Baker
Barrett (SC)
Barrow
Bartlett (MD)
Barton (TX)
Biggert
Bilbray
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehner
Bonner
Boozman
Boustany
Brady (TX)
Broun (GA)
Brown (SC)
Brown-Waite, Ginny
Buchanan
Burgess
Burton (IN)
Buyer
Calvert
Camp (MI)
Campbell (CA)
Cannon
Cantor
Capito
Carter
Castle
Chabot
Coble
Cole (OK)
Conaway
Crenshaw
Culberson
Davis (KY)
Davis, David
Deal (GA)
Dent
Donnelly
Doolittle
Drake
Dreier
Duncan
Ehlers
Emerson
English (PA)
Fallin
Feeney
Ferguson
Forbes
Fossella
Foxx
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gerlach
Giffords
Gilchrest
Gingrey
Gohmert
Goode
Goodlatte
Granger
Graves
Hall (TX)
Hastert
Hastings (WA)
Hayes
Heller
Hensarling
Herger
Hobson
Hoekstra
Hulshof
Hunter
Inglis (SC)
Issa
Johnson (IL)
Johnson, Sam
Jones (NC)
Jordan
Kanjorski
Keller
King (IA)
King (NY)
Kingston
Kirk
Kline (MN)
Knollenberg
Kuhl (NY)
Lamborn
Lampson
Latham
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas
Lungren, Daniel E.
Marchant
McCarthy (CA)
McCaul (TX)
McCotter
McCrery
McHenry
McHugh
McIntyre
McKeon
McMorris Rodgers
McNerney
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Moran (KS)
Murphy, Patrick
Murphy, Tim
Musgrave
Myrick
Neugebauer
Nunes
Pearce
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Poe
Porter
Price (GA)
Pryce (OH)
Putnam
Radanovich
Ramstad
Regula
Reichert
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Roskam
Ryan (WI)
Saxton
Schmidt
Sensenbrenner
Sessions
Shadegg
Shays
Shimkus
Shuster
Simpson
Smith (NE)
Smith (NJ)
Smith (TX)
Souder
Space
Stearns
Sullivan
Tancredo
Thornberry
Tiahrt
Tiberi
Turner
Upton
Walberg
Walden (OR)
Walsh (NY)
Wamp
Weldon (FL)
Westmoreland
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Young (FL)
NOES--231
Abercrombie
Ackerman
Allen
Andrews
Arcuri
Baca
Baird
Baldwin
Bean
Becerra
Berkley
Berman
Berry
Bishop (GA)
Bishop (NY)
Blumenauer
Boren
Boswell
Boucher
Boyd (FL)
Boyda (KS)
Brady (PA)
Braley (IA)
Brown, Corrine
Butterfield
Capps
Capuano
Cardoza
Carnahan
Carney
Castor
Chandler
Clarke
Clay
Cleaver
Clyburn
Cohen
Conyers
Cooper
Costa
Costello
Courtney
Cramer
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (IL)
Davis, Lincoln
Davis, Tom
DeFazio
DeGette
Delahunt
DeLauro
Diaz-Balart, L.
Diaz-Balart, M.
Dicks
Dingell
Doggett
Edwards
Ellison
Ellsworth
Emanuel
Engel
Eshoo
Etheridge
Farr
Fattah
Filner
Flake
Fortenberry
Frank (MA)
Gillibrand
Gonzalez
Gordon
Green, Al
Green, Gene
Grijalva
Gutierrez
Hall (NY)
Hare
Harman
Hastings (FL)
Herseth Sandlin
Higgins
Hill
Hinchey
Hinojosa
Hirono
Hodes
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson (GA)
Johnson, E. B.
Jones (OH)
Kagen
Kaptur
Kennedy
Kildee
Kilpatrick
Kind
Klein (FL)
LaHood
Langevin
Lantos
Larsen (WA)
Larson (CT)
LaTourette
Lee
Levin
Lewis (GA)
Lipinski
Loebsack
Lofgren, Zoe
Lowey
Lynch
Mahoney (FL)
Maloney (NY)
Manzullo
Markey
Matheson
Matsui
McCarthy (NY)
McCollum (MN)
McDermott
McGovern
McNulty
Meek (FL)
Meeks (NY)
Melancon
Michaud
Miller (NC)
Miller, George
Mitchell
Mollohan
Moore (KS)
Moore (WI)
Moran (VA)
Murphy (CT)
Murtha
Nadler
Napolitano
Neal (MA)
Obey
Olver
Ortiz
Pallone
Pascrell
Pastor
Payne
Perlmutter
Peterson (MN)
[[Page H14037]]
Pomeroy
Price (NC)
Rahall
Rangel
Rehberg
Renzi
Reyes
Richardson
Rodriguez
Ros-Lehtinen
Ross
Rothman
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Salazar
Sali
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Schakowsky
Schiff
Schwartz
Scott (GA)
Scott (VA)
Serrano
Sestak
Shea-Porter
Sherman
Shuler
Sires
Skelton
Slaughter
Smith (WA)
Snyder
Solis
Spratt
Stark
Stupak
Sutton
Tanner
Tauscher
Taylor
Terry
Thompson (CA)
Thompson (MS)
Tierney
Towns
Tsongas
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Visclosky
Walz (MN)
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Welch (VT)
Wexler
Wilson (OH)
Woolsey
Wu
Wynn
Yarmuth
Young (AK)
NOT VOTING--13
Bono
Carson
Cubin
Doyle
Everett
Jindal
Kucinich
Mack
Marshall
Oberstar
Paul
Royce
Weller
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (during the vote). Members are advised there
are 2 minutes remaining on this vote.
{time} 1804
Mr. ALTMIRE changed his vote from ``no'' to ``aye.''
So the motion to recommit was rejected.
The result of the vote was announced as above stated.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. SCOTT of Georgia. Mr. Speaker, on that I demand the yeas and
nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. This will be a 5-minute vote.
The vote was taken by electronic device, and there were--yeas 291,
nays 127, not voting 14, as follows:
[Roll No. 1118]
YEAS--291
Abercrombie
Ackerman
Allen
Altmire
Andrews
Arcuri
Baca
Bachus
Baird
Baldwin
Barrow
Bartlett (MD)
Bean
Becerra
Berkley
Berman
Berry
Biggert
Bishop (GA)
Bishop (NY)
Blumenauer
Bonner
Boren
Boswell
Boucher
Boyd (FL)
Boyda (KS)
Brady (PA)
Braley (IA)
Brown, Corrine
Buchanan
Butterfield
Calvert
Capito
Capps
Capuano
Cardoza
Carnahan
Carney
Castle
Castor
Chabot
Chandler
Clarke
Clay
Cleaver
Clyburn
Cohen
Conyers
Cooper
Costa
Costello
Courtney
Cramer
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (IL)
Davis, Lincoln
DeFazio
DeGette
Delahunt
DeLauro
Dent
Diaz-Balart, L.
Diaz-Balart, M.
Dicks
Dingell
Doggett
Donnelly
Dreier
Edwards
Ehlers
Ellison
Ellsworth
Emanuel
Emerson
Engel
English (PA)
Eshoo
Etheridge
Farr
Fattah
Ferguson
Filner
Fortenberry
Frank (MA)
Gallegly
Gerlach
Giffords
Gilchrest
Gillibrand
Gonzalez
Gordon
Graves
Green, Al
Green, Gene
Grijalva
Gutierrez
Hall (NY)
Hare
Harman
Hastings (FL)
Hayes
Heller
Herseth Sandlin
Higgins
Hill
Hinchey
Hinojosa
Hirono
Hobson
Hodes
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson (GA)
Johnson (IL)
Johnson, E. B.
Jones (NC)
Jones (OH)
Kagen
Kanjorski
Kaptur
Kennedy
Kildee
Kilpatrick
Kind
King (NY)
Klein (FL)
Kline (MN)
Knollenberg
LaHood
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Latham
LaTourette
Lee
Levin
Lewis (CA)
Lewis (GA)
Lipinski
LoBiondo
Loebsack
Lofgren, Zoe
Lowey
Lungren, Daniel E.
Lynch
Mahoney (FL)
Maloney (NY)
Markey
Marshall
Matheson
Matsui
McCarthy (NY)
McCollum (MN)
McCotter
McDermott
McGovern
McHugh
McIntyre
McKeon
McNerney
McNulty
Meek (FL)
Meeks (NY)
Melancon
Michaud
Miller (FL)
Miller (MI)
Miller (NC)
Miller, Gary
Miller, George
Mitchell
Mollohan
Moore (KS)
Moore (WI)
Moran (VA)
Murphy (CT)
Murphy, Patrick
Murphy, Tim
Murtha
Nadler
Napolitano
Neal (MA)
Obey
Olver
Ortiz
Pallone
Pascrell
Pastor
Payne
Perlmutter
Peterson (MN)
Pomeroy
Porter
Price (NC)
Pryce (OH)
Rahall
Rangel
Regula
Reichert
Renzi
Reyes
Richardson
Rodriguez
Rogers (AL)
Rogers (MI)
Ros-Lehtinen
Ross
Rothman
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Schakowsky
Schiff
Schwartz
Scott (GA)
Scott (VA)
Serrano
Sestak
Shays
Shea-Porter
Sherman
Shuler
Simpson
Sires
Skelton
Slaughter
Smith (NJ)
Smith (WA)
Snyder
Solis
Souder
Space
Spratt
Stark
Stearns
Stupak
Sutton
Tanner
Tauscher
Taylor
Thompson (CA)
Thompson (MS)
Tiberi
Tierney
Towns
Tsongas
Turner
Udall (CO)
Udall (NM)
Upton
Van Hollen
Velazquez
Visclosky
Walz (MN)
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Welch (VT)
Weldon (FL)
Wexler
Whitfield
Wilson (NM)
Wilson (OH)
Wolf
Woolsey
Wu
Wynn
Yarmuth
Young (FL)
NAYS--127
Aderholt
Akin
Alexander
Bachmann
Baker
Barrett (SC)
Barton (TX)
Bilbray
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehner
Boozman
Boustany
Brady (TX)
Broun (GA)
Brown (SC)
Brown-Waite, Ginny
Burgess
Camp (MI)
Campbell (CA)
Cannon
Cantor
Carter
Coble
Cole (OK)
Conaway
Crenshaw
Culberson
Davis (KY)
Davis, David
Davis, Tom
Deal (GA)
Doolittle
Drake
Duncan
Fallin
Feeney
Flake
Forbes
Fossella
Foxx
Franks (AZ)
Frelinghuysen
Garrett (NJ)
Gingrey
Gohmert
Goode
Goodlatte
Granger
Hall (TX)
Hastert
Hastings (WA)
Hensarling
Herger
Hoekstra
Hulshof
Hunter
Inglis (SC)
Issa
Johnson, Sam
Jordan
Keller
King (IA)
Kingston
Kirk
Kuhl (NY)
Lamborn
Lewis (KY)
Linder
Lucas
Manzullo
Marchant
McCarthy (CA)
McCaul (TX)
McCrery
McHenry
McMorris Rodgers
Mica
Moran (KS)
Musgrave
Myrick
Neugebauer
Nunes
Pearce
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Poe
Price (GA)
Putnam
Radanovich
Ramstad
Rehberg
Reynolds
Rogers (KY)
Rohrabacher
Roskam
Royce
Ryan (WI)
Sali
Saxton
Schmidt
Sensenbrenner
Sessions
Shadegg
Shimkus
Shuster
Smith (NE)
Smith (TX)
Sullivan
Tancredo
Terry
Thornberry
Tiahrt
Walberg
Walden (OR)
Walsh (NY)
Wamp
Westmoreland
Wicker
Wilson (SC)
Young (AK)
NOT VOTING--14
Bono
Burton (IN)
Buyer
Carson
Cubin
Doyle
Everett
Jindal
Kucinich
Mack
Oberstar
Paul
Salazar
Weller
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (during the vote). Members are advised less
than 2 minutes are remaining on this vote.
{time} 1812
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
Stated against:
Mr. BURTON of Indiana. Mr. Speaker, on rollcall No. 1118, had I been
present, I would have voted ``nay.''
____________________