[Congressional Record Volume 154, Number 123 (Friday, July 25, 2008)]
[Extensions of Remarks]
[Page E1555]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page E1555]]


               HOUSING AND ECONOMIC RECOVERY ACT OF 2008

                                 ______
                                 

                               speech of

                            HON. LOIS CAPPS

                             of california

                    in the house of representatives

                        Wednesday, July 23, 2008

  Mrs. CAPPS. Mr. Speaker, I rise today in strong support of H.R. 3221, 
the American Housing Rescue and Foreclosure Prevention Act.
  This bill is a powerful response to the foreclosure crisis that has 
spread across the Nation. The recent troubles at Fannie Mae and Freddie 
Mac have shaken the economy and the bill seeks to stabilize them by 
extending them limited credit and other financial support from the U.S. 
Treasury. These institutions are the central nervous system of mortgage 
liquidity in the United States, and ensuring their continued operations 
is vital to avoiding even more calamity in our housing markets. To help 
avert future mortgage crises, the bill creates a new, strong regulator 
for Fannie Mae and Freddie Mac.
  The bill also includes much-needed reforms of the Federal Housing 
Administration. The changes will help protect lower income borrowers 
from unscrupulous lending practices that have plagued the subprime 
market. And the bill provides more funding for housing counseling to 
help consumers avoid costly mistakes and learn more about the housing 
market.
  Mr. Speaker, this calamity isn't confined to financial institutions; 
it has also spread through our towns and neighborhoods and affected 
millions of our neighbors. In California foreclosures have risen to a 
20-year high and we are feeling this pain on the central and south 
coast. That's why I'm glad the American Housing Rescue and Foreclosure 
Prevention Act provides several key provisions to help homeowners.
  For example, this bill permanently increases the conforming loan 
limits to $625,000. Median home prices in Ventura, Santa Barbara, and 
San Luis Obispo Counties are well above the national average, and our 
families continue struggling to obtain affordable housing. This 
provision will allow them to obtain financing at lower interest rates, 
while at the same time providing much needed liquidity to our local 
housing market. While I believe the limit should have been raised to 
$729,750, as was temporarily done earlier this year, this permanent 
increase to $625,000 is absolutely crucial for my district. I am 
hopeful that in the future we will continue our efforts to raise this 
limit so that it reflects the housing needs of my constituents.
  In addition, this bill will stem foreclosures by creating a voluntary 
mortgage refinancing program that allows families to stay in their 
homes. Under this program, the Federal Housing Administration will have 
the authority to refinance up to $300 billion in imperiled mortgages. 
For borrowers facing escalating mortgage payments or even foreclosure, 
this provision allows them to refinance their homes into more 
affordable, fixed-rate mortgages. To protect taxpayers, borrowers will 
have to agree to certain conditions regarding future sale of the home 
in order to participate in the program. And to ensure against the risk 
of taxpayers being saddled with overvalued loans, lenders holding these 
troubled mortgages will have to write down the loans significantly.
  Too many hard working families have found themselves the victim of 
unscrupulous lenders and watched helplessly as their piece of the 
American Dream has been snatched away from them. Even more tragically, 
many homeowners who have had no problem keeping up with their mortgages 
have seen their home values and quality of life harmed by the 
appearance of abandoned foreclosed properties in their neighborhoods. 
That is why the House went against the wishes of the President and 
included $3.9 billion for cities and towns to purchase and rehabilitate 
foreclosed homes. Abandoned properties can hurt entire communities and 
this money will prove vital in protecting against neighborhood decline 
during this crisis.
  The bill also creates a $500 million affordable housing trust fund to 
expand the housing options available for low-income working families 
and creates a first-time homebuyer tax credit worth up to $7,500. These 
two provisions will undoubtedly help young families in my district 
better afford the costs of buying a new home.
  Mr. Speaker, the hardworking families in our country need help. The 
House passed a very similar bill in May, which the President threatened 
to veto. Now that the housing and finance situation has continued to 
deteriorate, he has agreed to work with us in helping the American 
people. I say it's about time, and I hope that we have his continued 
cooperation as the many provisions of this legislation are carried out 
in our hometowns.
  I urge my colleagues to support this bill.

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