[Congressional Record Volume 153, Number 193 (Monday, December 17, 2007)]
[Senate]
[Page S15768]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         FHA MODERNIZATION ACT

  Mr. FEINGOLD. Mr. President, I am pleased to support the FHA 
Modernization Act of 2007, and I hope the House and Senate can quickly 
work together to get this legislation to the President. This bill is a 
good first step to helping address both housing affordability issues 
and problems in the subprime lending industry. I look forward to 
monitoring the legislation's implementation to ensure that the FHA 
reforms truly benefit low-income and middle-income homeowners.
  The rising rate of foreclosures and its broader impact on the 
nation's economy is a serious issue that requires the involvement of 
all levels of government as well as both private and non-profit 
organizations. Subprime lending and rising foreclosure rates are 
complicated issues to unravel and any response, whether legislative or 
regulatory, will bring with it a set of consequences, some intended and 
some unintended. We need to examine a variety of responses to the 
rising foreclosure rates and their consequences, including providing 
more housing counseling for borrowers and more effectively regulating 
lending practices to prevent some of the unscrupulous practices that 
have occurred. Some of the more egregious lending practices include 
high rates of predatory lending in minority communities, steering 
borrowers into subprime mortgage products even if the borrowers 
qualified for more conventional loans, and not ensuring that borrowers 
fully understood the terms of subprime loans.
  I was disappointed that the Senate FHA Modernization Act did not 
contain a provision directing some of the revenue realized by the FHA 
bill into an affordable housing fund as the House FHA reform bill did. 
I hope that conferees will work hard to find a fiscally responsible way 
to direct some of the increased revenue from the FHA bill into a 
national affordable housing trust fund. I also hope that Congress can 
pass stand-alone legislation creating a national affordable housing 
trust fund in the coming year.
  The creation of more affordable housing through a national affordable 
housing trust fund will also help to alleviate the affordable housing 
crisis we are facing throughout the country. Local communities around 
the country are creating such trust funds, including in my state of 
Wisconsin. Congress needs to act promptly so that a national affordable 
housing trust fund can complement the good work going on in states and 
local communities throughout the country.
  Earlier this year, I introduced legislation, the Affordable Housing 
Expansion and Public Safety Act, which contained provisions designed to 
assist low-income Americans in affording safe and adequate housing, 
including authorizing 100,000 new Section 8 vouchers, authorizing new 
targeted funding for the HOME program, reauthorizing the Public and 
Assisted Housing Crime and Drug Elimination Program, and calling on 
Congress to create a national affordable housing trust fund. I hope 
that Congress can take a step toward the creation of such a fund by 
including a provision in the FHA reform bill conference report to 
dedicate a fiscally responsible revenue stream toward such a national 
affordable housing trust fund.
  This Nation faces a severe shortage of affordable housing for our 
most vulnerable citizens. Shelter is one of our most basic needs, and, 
unfortunately, too many Wisconsinites and people around the country are 
struggling to afford a place to live for themselves and their families. 
As Congress continues to take steps to deal with affordability issues, 
rising foreclosure rates, and reform of lending practices by banks and 
mortgage brokers, we need to ensure that any such reforms benefit those 
Americans most in need.

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