[Congressional Record Volume 154, Number 84 (Wednesday, May 21, 2008)]
[Extensions of Remarks]
[Page E986]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             H.R. 3221--FORECLOSURE PREVENTION ACT OF 2008

                                 ______
                                 

                            HON. TODD TIAHRT

                               of kansas

                    in the house of representatives

                         Tuesday, May 20, 2008

  Mr. TIAHRT. Madam Speaker, owning a home is an essential component of 
the American dream, and an accomplishment that millions of Americans 
aspire to and take pride in. In recent months, however, the housing 
market has entered a slump. The effort to provide a way for all 
Americans to own their own homes brought a sharp increase in the usage 
of subprime and exotic mortgages, which proved to be more than the 
market could handle. We now find ourselves grappling with decisions on 
how best to ``fix'' the problems that have arisen in the housing market 
and in our economy.
  However, a broad government handout, such as what has been proposed 
in recent legislation, is not the answer.
  While the housing slump must be addressed, I am concerned by the 
precedent of using taxpayer dollars to bail out fraudulent lenders and, 
in some instances, irresponsible borrowers. H.R. 5818 and H.R. 3221, 
the so-called ``Neighborhood Stabilization Act of 2008'' and 
``Foreclosure Prevention Act of 2008,'' propose such a bailout at the 
cost of responsible, hardworking American families.
  These bills do contain important provisions such as the modernization 
of the Federal Housing Authority (FHA) and reform of Government-
Sponsored Entities (GSEs). These bills, however, also include a $300 
billion taxpayer-funded government subsidizing of irresponsible lending 
behavior. I fully support the FHA and GSE reform measures that have 
passed the House of Representatives, yet I cannot support a massive 
bailout to irresponsible lending practices and market speculators. For 
these reasons, I voted against H.R. 5818 and H.R. 3221.
  While I cannot support legislation that rewards bad behavior at the 
expense of taxpayers, I remain strongly committed to supporting 
measures that provide the necessary relief to families who have been 
victimized without burdening taxpayers for the irresponsibility of 
others. Therefore, I am supporting two alternative bills introduced 
before the House of Representatives that precisely address the needs of 
homeowners in a responsible and fair way.
  First, H.R. 5974, The Housing Opportunity for All Americans Act of 
2008, addresses the housing slump in a responsible way. Instead of 
providing a massive bailout to irresponsible lenders and borrowers, 
this legislation creates a market incentive approach to the housing 
slump. The market approach includes a one-time tax credit for 
homebuyers of 10 percent of the home's purchase price (up to $10,000) 
for 1 year after the enactment of the bill. Also, under this 
legislation, taxpayers who are non-resident aliens, flip a home within 
the 1 year period, or sell a house to a relative simply for the credit, 
would not be eligible. Furthermore, mortgages which exceed the maximum 
original principal obligation of a mortgage Freddie Mac will purchase 
would not qualify.
  Second, H.R. 5857, the Homeownership Protection and Housing Market 
Stabilization Act of 2008, is also a more responsible approach to 
addressing the current problems facing the housing market. The bill 
includes provisions to directly protect home buyers and owners, such as 
housing counseling, improved disclosure practices, fraud combating and 
prevention measures, and encouragement to rework loans instead of 
foreclosing. It also aims to help prevent lenders from falling into the 
same habits that have recently developed in the industry by providing 
liability protection for helping troubled borrowers, requiring escrow 
accounts for subprime borrowers, and reforming appraisal practices for 
prospective homebuyers. In addition, this legislation contains 
provisions similar to those that have passed this House with my 
support: FHA modernization and improved regulation of GSEs, including 
Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.
  These alternative bills provide the integrity of the appraisal 
process and strengthen mortgage fraud prevention efforts that will help 
bring stability to the current housing market. These bills together 
represent a viable alternative, offering an appropriate response to a 
serious problem without burdening taxpayers for the irresponsibility of 
others.
  I am hopeful that a bipartisan compromise can be achieved in 
Conference that can be supported by majority of the Members of the 
House and Senate, as well as the President. An effectual and 
responsible solution to the current situation must be reached for the 
sake of our economy and our citizens, and I hope to be able to vote on 
legislation that provides sensible but effective relief for American 
homeowners.




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