[Congressional Record Volume 154, Number 32 (Wednesday, February 27, 2008)]
[Senate]
[Pages S1217-S1219]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SCHEDULE
Mr. REID. Mr. President, following my remarks and those of the
Republican leader, there will be a period of morning business for an
hour, with the Republicans controlling the first half, the majority
controlling the final half. Following morning business, we will resume
the motion to proceed to S. 2633, a bill that calls for the safe
redeployment of the troops in Iraq. Today, the Senate will stand in
recess from 12:30 until 2:15 p.m.
iraq
Mr. President, another day in Iraq. As we see from the morning
papers--the Washington Post is a good example--headline: ``Suicide
Bomber Hits Bus in Iraq's North.'' Among other things, the article goes
on to state:
A suicide bomber detonated his explosives belt outside a
bus in northern Iraq on Tuesday, killing at least eight
people and injuring many more.
In a different paragraph:
The Tall Afar bombing followed a bloody weekend of attacks
against Shiite pilgrims, the deadliest incident taking place
on Sunday when a suicide bomber killed at least 63 pilgrims
near the southern town of Iskandariyah. Even as overall
violence has fallen, the recent attacks underscore the
tenuous security environment and the resiliency of the
insurgency.
In volatile Diyala province, armed men set up a fake
checkpoint and kidnapped 21 people.
Near the oil-rich city of Kirkuk, gunmen attacked a
checkpoint manned by Sunni volunteers, killing the Sunni
volunteers.
Mr. President, this is 1 day and a half billion dollars. That is what
is going on in Iraq.
What impact does that have? General Casey testified here yesterday.
General Casey said:
The cumulative effects of the last 6-plus years of war have
left the Army out of balance, consumed by the current fight,
unable to do the things we know we need to do.
And I failed to mention in my earlier comments that below the article
about the suicide bomber is the report of three more dead American
soldiers: CPT Nathan R. Raudenbush, LCpl Drew W. Weaver, and SPC Keisha
M. Morgan.
So that is where we are on the Iraq debate today. I will sum up in a
short time, after I make a few other remarks, and I will ask consent so
that we have some idea today as to how we will proceed.
I would tell all Senators that we will have, sometime today, either
after the 30 hours or before a vote on the motion to proceed to the
matter that is now before the Senate--immediately after that, no matter
what happens on that--we will have a cloture vote on the second matter,
which is, as we all know, a piece of legislation that calls for
periodic reports by the President on the war on terror. Following that,
when that is disposed of, we will go to the housing stimulus package.
That is what I would like to spend a few minutes on because we will get
to that sometime this week. It is only a question of when we get to it.
housing
Mr. President, the sights and signs of America's housing crisis are
all around us. There is not a State in the Union that doesn't feel the
housing crisis. Neighborhood streets are dotted with one ``For Sale''
sign after another. And once we have one ``For Sale'' sign or, even
worse, the bank has a foreclosure sign on it, it affects the whole
neighborhood.
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One of my boys lives in Las Vegas, in a nice neighborhood. The
housing prices there in the last 3 months have dropped 20 percent--20
percent. In Las Vegas, last month, there were more foreclosures than
there were sales of new homes. This is very unusual because Las Vegas
has been the fire that has burned upward for 20 years, creating such an
economic strong point that it has been known for 20 years as the most
rapidly growing State in the Union.
In these struggles, construction workers are having trouble finding
jobs. Construction workers are having trouble making payments on their
homes. In desperation, hard-working people have been talked into bad
mortgages and are now seeing their homes just slip away. Every day, new
statistics illuminate the depth of this growing crisis in the housing
market.
The crisis is everyplace. Today, the Associated Press reported that
the number of homes facing foreclosure across our country grew by 57
percent in the month of January. That is compared to a year ago. We
also now know that sales prices have lost almost 10 percent in the
final quarter of last year, and I am sure this quarter is going to be
even worse. The last quarter marked the steepest drop in the 20-year
history of the Standard & Poor's housing index.
In the crisis in Nevada, I have mentioned briefly last month that we
saw the rate of foreclosures rise 95 percent from the previous year; in
Reno and Sparks, 611 percent. Now, who suffers from these foreclosures?
Families who own the homes? Of course they do, but they aren't the only
ones. It is the whole neighborhood, those who live near foreclosures,
families who have done nothing wrong, who have paid their bills on
time. Yet they are seeing the value of their property zapped.
The Center for Responsible Lending has estimated that 40 million
neighboring homes will experience a loss in equity if the expected
foreclosures materialize. That would likely lead to a total decline of
more than $200 billion in home equity, and some say that is very
conservative. This could mean more than $3 billion in losses for Nevada
alone.
If that is not bad enough for homeowners, it is very bad for local
governments that have already been forced to cut services as a result
of the shrinking tax base. One example: Washaw County--that is Reno--is
facing a $26 million cut to its local budget, and they say it is mainly
due to the housing crisis, and $26 million to Washaw County is a lot of
money.
These numbers are staggering. We all know the housing crisis isn't
just about statistics, it is about families. I have had, in the State
of Nevada, six mobile resource centers where I bring in people. We do
advertising and let them know we are going to be there. We bring in
experts to talk, and we have people who service the loans there, we
have credit counselors, and we have representatives from FHA. We have a
wide range of experts there to talk to these desperate people to see if
anything can be done to help them, and there are some things that can
be done to help. These centers bring borrowers and mortgage services
together to talk about how to help homeowners facing foreclosure.
The stories they tell are heartbreaking. I could tell lots of
stories, but the one that stands out in my mind is a man by the name of
Elisario. What extraordinary challenges this man and his family face.
He is a marine veteran of the Iraq war. He has three children, three
little girls. Like thousands of others of these heroes returning from
Iraq and Afghanistan, the war took its toll on him. He suffers from
post-traumatic stress disorder and is recovering from many surgeries
related to injuries he sustained in Iraq. As a result of the injuries
he suffered in service to our country, his family was forced, for a
time, to rely on the income from his wife's part-time job. Now,
remember the three little girls. They fell behind in their mortgage
payments. That doesn't surprise anyone. He called his lender but was
told it was his responsibility to pay the loan. They weren't willing to
work with them at all. He was told to sell the home and get an
apartment.
All across the country, people just like Elisario are looking to us
for help. In far too many cases, people like him saw their mortgage
payments skyrocket after the interest rate on their loan was reset. The
sudden loss of income combined with the dramatic increase in the
monthly payment is lethal for any homeowner. These are the families
whom the legislation we will get to--hopefully sooner rather than
later--this week will help.
This legislation we have is not for speculators. It is not for
speculators who lost a bet. Are we going to bail out lenders who
underwrote mortgages? No. They shouldn't have made those loans. That is
their problem. We are not trying to bail out borrowers who should have
known better. We are trying to give families like Elisario's a chance
to keep their homes and stabilize the Nation's economy in the process.
The administration deserves credit for taking some first steps. I
appreciate Secretary Paulson and like him a lot. He has led the efforts
to gather mortgage servicers, investors, and housing counselors to form
the Hope Now Alliance and Project Lifeline. These efforts should help,
but it is such a tiny bit of help, and they are all voluntary. They
fall completely short. Some estimate that less than 3 percent of at-
risk families will be reached under his proposals--less than 3 percent.
We have to help the 97\1/2\ percent who won't be reached.
The legislation before us does that. It will keep families in their
homes by increasing preforeclosure counseling funds, expanding
refinancing opportunities, and amending the Bankruptcy Code to allow
more home loans on primary residences to be modified. This will help
communities impacted by foreclosures by allowing parts of the country
with high foreclosure rates to access Federal funds to purchase
foreclosed properties for rehabilitation, rent, or resale.
The bill will help struggling businesses by making it easier for them
to utilize losses incurred in 2006, 2007, and 2008 to offset prior
years' income to recoup previously paid income taxes. This was the
provision that was in our previous stimulus package that our colleagues
on the other side of the aisle stopped us from moving forward on. It is
one the home builders liked very much.
The legislation that will be before the Senate shortly will help
families avoid foreclosure in the future by improving loan disclosures
during the original loan and refinancing process. And one of the
provisions that was also in our package that we had, that my good
friends on the other side of the aisle defeated, was one the President
called for in his State of the Union Message--revenue bonds to help
people get into some of these homes that are being foreclosed upon.
Title IV of the legislation makes changes to the Bankruptcy Code.
These changes would allow a bankruptcy judge to modify the terms of a
mortgage on a primary residence but only under very limited
circumstances, limited in scope and duration. Only families who can
pass a strict means test in bankruptcy and are currently struggling
with an adjustable rate mortgage and subprime loan that already exists
are eligible. That is all.
There are limits to the modifications a judge can make to the
interest rate, term, the principal amount of the mortgage. We do not
aim to drive struggling families into bankruptcy with this proposal. No
one should abuse the Bankruptcy Code to get out of debts they owe.
The means test provided in this legislation should prevent that from
happening. Remember the reason this is necessary today. For example, in
Las Vegas, if you own a home down on the oceanfront in Malibu, you buy
that and finances go bad, you can go to bankruptcy court. The
bankruptcy court can readjust that loan on your vacation property, your
second home, but cannot do that on your primary residence. That is not
the way it should be.
We are also mindful of concerns that this provision could make access
to mortgages more difficult by increasing costs, it could inject more
uncertainty into the market. All the experts say that is untrue.
Georgetown has completed a study.
In today's New York Times, there is an article: ``Getting Real About
the Rescue.'' That is what it is about. And they go on to state how
important it is that we do this stimulus package but
[[Page S1219]]
especially we do this bankruptcy provision. This editorial says, among
other things:
If the bankruptcy provision becomes law, as it should,
lenders will have a powerful incentive, which they currently
do not have, to modify troubled loans voluntarily. If they
can't or won't come to new terms with borrowers, then they
would run the risk that a bankruptcy court would do the
modifying for them.
But most, or all, I repeat, independent experts agree that any
increase in costs would be nonexistent. Meanwhile, this modified
bankruptcy language would help more than 200,000 families avoid
foreclosure. It would stabilize the housing market, prevent future,
perhaps deeper losses to families, investors--and that is so important,
we have to do that. That is why we have to act.
There may be no perfect solution to the growing housing crisis, but
standing back and doing nothing would be a real mistake. The
legislation that will shortly be before us will make a real difference
to homeowners, neighborhoods, and our economy.
More than 700,000 families will benefit from the policies in this
measure, 80,000 vacant foreclosed homes will be put back to productive
use, 30,000 jobs, and $10 billion in economic activity will be created.
I hope my colleagues will join us to support cloture on the motion to
proceed to this matter so we can pass the legislation and bring the
relief to hundreds of thousands of Americans.
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