[Congressional Record Volume 155, Number 37 (Tuesday, March 3, 2009)]
[Senate]
[Pages S2651-S2652]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             HOUSING CRISIS

  Mr. DURBIN. Madam President, I would like to close with one brief 
statement, if I can, on the housing crisis we are facing.
  Yesterday, I was in a neighborhood of Chicago named Albany Park. It 
is one of the most diverse neighborhoods on the north side of our city. 
I went into this neighborhood on Kedzie Avenue to meet in front of a 
house that had been boarded up going through mortgage foreclosure. A 
lot of families gathered around, families who live in the neighborhood. 
And they looked like America--Black, White, and Brown--all standing 
there with their neat little homes all around this one foreclosed 
building. The building was partially boarded up. Windows were broken. 
The neighbors were outraged that this mortgage foreclosure has resulted 
in an empty building, which is now being vandalized and turned into a 
drug haven.
  You would be angry, too, if it were in your neighborhood. These folks 
who care for their lawns, care for their kids, make sure their mortgage 
payments are paid on time, want to know what we are doing about 
mortgage foreclosures in this country. The honest answer is, We are 
doing little or nothing.
  We have to change that. For 2 years now. I have tried to pass one 
simple measure that would change the Bankruptcy Code and say that a 
bankruptcy judge can, at the last resort, for those who end up in 
bankruptcy with a mortgage foreclosure, take a look at the terms of the 
mortgage and change those terms. That is not a radical idea. Currently, 
the judge can do that for a second home, a farm, a ranch, but they 
cannot do it for your primary residence. I cannot explain why, but that 
is a fact.
  Now we have primary residences across America that are being 
subjected to mortgage foreclosure. Initially, it was because of the 
subprime mortgages with those exotic finance deals that fell apart when 
the mortgage was reset. Now more and more homes going into foreclosure 
had fixed-rate mortgages, did not have subprimes, and we are seeing the 
bottom fall out of the housing market.
  It is estimated one out of four mortgage holders in America are 
paying more principal on their mortgage than the value of their home. 
They are underwater, as they say. What are we going to do about it? 
Well, for a long time we said: We will trust the banks, the sanctity of 
the contract. They will work on it. They will negotiate. It has not 
happened. As a result, we have record numbers of mortgage foreclosures. 
The housing market is in a tailspin. No homes are being built, 
obviously. Most homes end up vacant on the rolls of the bank and become 
eyesores in a neighborhood.
  What I am suggesting is, we have to be honest. We tried to let the 
banks and the mortgage bankers run this situation for the last year and 
they have failed and failed miserably. If we do not take control of 
this situation, if we do not have the bankruptcy court as the last 
resort that can ultimately change the terms of the mortgage, with 
reasonable limits--I am prepared to accept reasonable limits; there 
will not

[[Page S2652]]

be any prospective use of this; only those existing mortgages today--
that is the only way to come to the bottom of this crisis.
  We are working with these financial institutions to try to find 
reasonable terms to work this out, but we have not had a lot of luck. 
Citigroup stepped forward. We reached an agreement with them. We are 
trying to reach an agreement with others. But for the mortgage bankers, 
who brought us into this mess, to still hold this Congress enthralled, 
to hold us hostage to their so-called sanctity of contract, is to 
ignore the obvious.
  If they have their way, there will be a continued crisis of mortgage 
foreclosures, the recession will get worse instead of better, and 
neighborhoods such as Albany Park will disintegrate, deteriorate 
because of the foreclosures of homes in the neighborhood. Renters who 
dutifully pay their rent show up one day to be told: Oh, incidentally, 
your landlord defaulted on the mortgage and now you are going to be 
thrown out on the street. Over and over again, and it is totally 
unfair.
  We have to do something. I am glad the House is going to take up this 
measure. We need to move on it. We waited a year. That is long enough.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from North Dakota.
  Mr. DORGAN. Madam President, let me withhold.

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