[Congressional Record Volume 154, Number 65 (Wednesday, April 23, 2008)]
[House]
[Pages H2633-H2634]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              FORECLOSURE

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.
  Ms. KAPTUR. Mr. Speaker, the housing foreclosure crisis in America is 
getting worse. Last February alone

[[Page H2634]]

brought another quarter of a million foreclosures, 223,561 families. 
Last year, in 2007, our Nation suffered 1.6 million foreclosures, the 
largest equity washout in our history. That's 1.6 million families, 
probably between 4 and 5 million people, who have destroyed credit and 
who lost their homes. Their lives have been thrown into chaos.
  Despite the death grip that mortgage foreclosures are having in this 
country, Washington has yet to offer a credible solution. Back home my 
constituents are demanding to know what is taking so long. The huge 
jumps in foreclosures were becoming evident in 2006. Experts have 
forecast an even larger increase based on loan resets on adjustable 
rate mortgages. Still no credible action from the Bush administration 
or this Congress. One has to wonder why Washington has not moved more 
decisively to enact legislation when no congressional district has gone 
unaffected by this crisis. In whose interest is it to have so many 
Americans, by the millions, falling off the edge of the mortgage cliff?
  The Bush administration should take real action. It isn't. This 
Congress should take real effective action. It hasn't. It is clear what 
will happen if we don't. Another 2.9 million loans were past due last 
December, signaling high rates of foreclosure to come. Another 40 
million homeowners are at risk of seeing their property values decline, 
and 12.5 million will have either zero or negative net equity in their 
home. In fact, America has reached a very dangerous position. For the 
first time in our history, people owe more on their homes than their 
homes are worth. People owe more on their homes than their homes are 
worth. Net negative home equity.
  Despite the great fanfare associated with government compacts and 
rescue hotlines, many servicers and investment banks are still refusing 
to come to the table. I've received a long list of servicers who can't 
be reached or who refuse to pursue workouts, including the banks that 
hold the mortgages that were serviced, when housing counselors and 
homeowners try to reach out to them at the local level. They used to 
call that ``taking the lamb.'' They've disappeared, and, therefore, 
there is no one to work it out with.
  Counseling services at the local level are overrun with desperate 
homeowners, many of whom could be helped if they weren't on long 
waiting lists for counseling assistance and could find with whom they 
should work out that mortgage. What good is the $180 million in housing 
counseling funds we passed in Congress last year if the majority of 
servicers are still refusing those workouts and if that 180 million 
wasn't targeted to the districts that are most in need? And it wasn't.
  Of those who are willing to engage in workouts, most only offer 
repayment plans, giving homeowners additional time to catch up with 
their payments. But this begs the question if homeowners cannot keep up 
with their regular payments, what good does it do them to offer them a 
chance to catch up by making double and triple payments?
  One of my constituents was offered such a ``deal.'' He tells me that 
the bank will allow him to save his home if he just comes up with 
$40,000 by October. This gentleman, who has lived in his home for more 
than two decades, has a low fixed income with no hope of coming up with 
such a large sum. His lender is offering concessions in name only.
  A few servicers who are engaging in workouts are moving toward 
modifying the terms of the loans, reducing principal, lowering interest 
rates, extending the terms of the loan, to make them more affordable. 
We need much more of that. But the relatively small segment of the 
industry that is willing to do so, coupled with the painfully slow pace 
of working out individual plans, only drives America into deeper 
crisis.
  More effective solutions should be forthcoming from this Congress, 
including bankruptcy bills like that of Congresswoman Maxine Waters and 
Congressman Brad Miller, which would allow judges now the flexibility 
to modify the terms of mortgage loans in bankruptcy court proceedings 
by lowering interest rates, forgiving penalties, reducing principal, 
and getting those servicers and banks to the table. Of course they 
don't want that. Too bad. The crisis is an American crisis and it needs 
an American solution.
  To tread water while this disaster unfolds is wrong. It's not just 
about helping homeowners. It's about helping our Nation's economy and 
trying to rebuild the economic strength that we have lost through this 
deepening crisis.

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