[Congressional Record Volume 155, Number 39 (Thursday, March 5, 2009)]
[House]
[Pages H2986-H2995]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




PROVIDING FOR FURTHER CONSIDERATION OF H.R. 1106, HELPING FAMILIES SAVE 
                        THEIR HOMES ACT OF 2009

  Mr. HASTINGS of Florida. Mr. Speaker, by direction of the Committee 
on Rules, I call up House Resolution 205 and ask for its immediate 
consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 205

       Resolved, That during further consideration of the bill 
     (H.R. 1106) to prevent mortgage foreclosures and enhance 
     mortgage credit availability, pursuant to House Resolution 
     190, amendment number 1 printed in House Report 111-21 shall 
     be considered as perfected by the modification printed in the 
     report of the Committee on Rules accompanying this 
     resolution.

  The SPEAKER pro tempore. The gentleman from Florida is recognized for 
1 hour.
  Mr. HASTINGS of Florida. For the purpose of debate only, Mr. Speaker, 
I yield the customary 30 minutes to the gentlelady, my friend from 
North Carolina, Dr. Foxx. All time yielded during consideration of the 
rule is for debate only.


                             General Leave

  Mr. HASTINGS of Florida. I ask unanimous consent that all Members 
have 5 legislative days within which to revise and extend their remarks 
and to insert extraneous materials into the Record.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Florida?
  There was no objection.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield myself such time as I 
may consume.
  Mr. Speaker, H. Res. 205 provides for further consideration of H.R. 
1106, the Helping Families Save Their Homes Act of 2009. As I've 
previously stated, the Helping Families Save Their Homes Act takes a 
crucial step toward reviving our housing market, stemming the tide of 
home foreclosures, and putting our Nation's economy back on track.
  This bill provides for a safe harbor from liability to mortgage 
servicers who engage in loan modifications to remove any impediments 
that may prevent them from partaking in voluntary modifications. It 
also makes much-needed changes to the HOPE for Homeowners Program in 
order to encourage more lenders to participate and ensure that the 
program meets its intended objective.
  The bill further makes permanent the temporary increase in deposit 
insurance coverage for both the FDIC Deposit Insurance Fund and the 
National Credit Union Administration Share Insurance Fund, in order to 
both enhance the liquidity and stability of our banking institutions, 
and help restore confidence in our financial system.
  The underlying legislation, Mr. Speaker, also makes several long 
overdue changes to our bankruptcy code. Now, some have understandably 
questioned these provisions which would allow bankruptcy judges the 
ability to modify loans on a homeowner's principal residence if the 
homeowner meets specified stringent criteria. It has been argued that 
allowing judicial modifications will lead to a sudden slew of 
bankruptcy filings, will cause massive losses to financial 
institutions, and will increase the cost of borrowing for other 
homeowners. However, this will simply not be the case.
  Bankruptcy will remain, as it always has been, a last resort. And 
modifications will be at the individual discretion of a bankruptcy 
judge who will determine if a borrower has acted responsibly and if a 
claim has any merit.
  Most importantly, allowing judicial modifications will maximize, not 
lessen, the value of troubled mortgages for lenders, and will avoid the 
continuous decline in property values in neighborhoods with foreclosed 
properties.
  Additionally, this rule provides for a revised manager's amendment 
that will make the bankruptcy provision and this legislation even more 
effective and efficient. The revised manager's amendment will allow a 
court to consider lowering the interest rate to reduce a homeowner's 
mortgage payments in lieu of reducing the mortgage principal.

                              {time}  1030

  It also gives mortgage holders a greater proportion of a home's 
appreciation should the home be sold during the bankruptcy plan, and it 
makes changes to the good faith requirement, further ensuring that 
judicial modifications are only used when borrowers have exhausted all 
other options.
  The bankruptcy provisions in this legislation with the changes 
proposed in the revised manager's amendment will help thousands of 
American families stay in their homes. We must remember that bankruptcy 
is no walk in the park. It is a strict, demanding, and intrusive 
process in which every aspect of one's financial life is scrutinized 
and controlled, and that says nothing of the negative stigma and of the 
long-lasting effects of filing for bankruptcy.
  In addition, to be eligible for such loan modifications, families 
must show

[[Page H2987]]

that they will be able to repay their debts and that they have tried to 
obtain a loan modification outside of bankruptcy, but let's not kid 
ourselves. Under current law, similar loan modifications are available 
for every other type of secured loan except for loans securing primary 
residences.
  If a millionaire or a billionaire can modify a loan on a private jet 
and if a housing speculator can modify loans on countless failed 
investment properties, why can't we allow struggling families to modify 
their mortgages so that they're not put out on the streets?
  It's easy to stand up here and claim that this bill is simply a 
bailout for reckless homeowners; but as our Nation creeps deeper into 
this financial crisis, it is painfully clear that our housing market is 
having a rippling effect on the economy. Families who have acted 
responsibly and who have paid every single payment on time are finding 
themselves, in one way or another, swept up by the foreclosure crisis, 
oftentimes through no fault of their own.
  As foreclosures rise, surrounding home prices fall, funding for vital 
public services goes down, financial institutions are saddled with 
losses, access to credit shrinks, and our economy grinds to a halt. 
This legislation will put a stop to this deadly spiral. It will rebuild 
this economy from the bottom up, for our Nation simply cannot recover 
if we here in Congress turn our backs on the millions of Americans 
struggling to care for their families and to stay in their homes.
  Mr. Speaker, this bill may not help every family. It will, however, 
help responsible individuals stay in their homes, and it will mitigate 
the destructive impact of this housing crisis by clearing legal 
impediments to loan modifications, by improving the HOPE for Homeowners 
Program, by ensuring confidence in our banking system, and by finally 
making commonsense reforms to our bankruptcy laws.
  I reserve the balance of my time, Mr. Speaker.
  Ms. FOXX. Mr. Speaker, I have great respect for my colleague, and I 
wish that just his saying something would make it so.
  Unfortunately, my distinguished colleague who has a distinguished 
service not only in Congress but also as a judge, you simply cannot say 
something and make it so. This is not going to stop the problem that we 
have in the housing market. This is actually going to make it worse. 
Let me make a couple of comments about why that is the case.
  We have talked over and over about the fact that this is going to 
drive up the cost of loans in the future and about why it's going to 
hurt people who have played by the rules.
  You know, House Republicans support responsible homeowners who live 
within their means, who make honest representations on their loan 
applications, who pay their debts, and who work hard to achieve the 
American dream. But that's not what this bill does. What this bill does 
is it rewards bad behavior. It extends the welfare program in this 
country, and it's going to make home mortgages in the future much, much 
more expensive.
  Why is that the case?
  As my colleague has said, in the past, home mortgages have been left 
out of the bankruptcy law because they then become higher in risk. That 
has held down interest rates. By putting these home mortgages into the 
bankruptcy law, it is going to make the interest rates higher in the 
future. Even Justice Stevens said that taking the principal home out of 
the bankruptcy law was to encourage the flow of capital into the home 
lending market, but now we're going to increase the risk to lenders, 
and this is going to drive up the cost of interest rates.
  As for the comments about millionaires and billionaires, that's a 
straw dog, just a straw dog, and we don't need to be putting those 
things out.
  This rule and the underlying bill are opposed by both the Heritage 
Foundation and the New York Times. That doesn't happen very often, Mr. 
Speaker. It very rarely happens that those two entities oppose 
something, but they do.
  I want to say something about the fact that we were here a week ago 
today to deal with this rule, and we thought we were going to be voting 
on the underlying bill, so it was pulled off because it was going to be 
made better, but you know, this is just the bait-and-switch game. I 
want to say to my colleagues that this underlying bill was not made 
better. This rule was not made better as a result of this week that has 
passed by. In fact, it may have been made worse.
  I challenge my colleagues who have hesitation about this bill and 
whether to vote for it to read the bill, to read the rule. See if you 
think that this has actually made it better.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HASTINGS of Florida. Mr. Speaker, I am very pleased at this time 
to yield 2 minutes to the gentlewoman from California, a member of the 
Committee on the Judiciary, Ms. Zoe Lofgren.
  Ms. ZOE LOFGREN of California. Mr. Speaker, I would like to yield to 
my colleague from California (Mrs. Tauscher).
  Mrs. TAUSCHER. Mr. Speaker, I rise to engage in a colloquy with my 
distinguished colleague from California (Ms. Zoe Lofgren) regarding the 
Helping Families Save Their Homes Act of 2009.
  Ms. ZOE LOFGREN of California. I am happy to engage in a colloquy.
  Mrs. TAUSCHER. Thank you.
  Mr. Speaker, I would like to take this opportunity to thank Ms. 
Lofgren, Chairman Conyers, Speaker Pelosi, Majority Leader Hoyer, and 
Majority Whip Clyburn for the collaborative and constructive 
discussions we have had during the past several weeks.
  Our good-faith negotiations have resulted in positive changes to this 
bill by increasing uniformity in the Chapter 13 bankruptcy process and 
by making qualified loan modifications the centerpiece of our efforts 
to keep families in their homes.
  In addition to other changes making the bill stronger, the 
legislation will ensure that a bankruptcy judge considers whether a 
borrower has been offered a qualifying loan modification before seeking 
a judicial modification. This is consistent with President Obama's 
plan. Additionally, changes were made to ensure that judges use FHA 
appraisal guidelines in determining the fair market value of property. 
This will streamline and simplify the valuation process.
  I am also pleased that we have included language to prevent wealthy 
people who can afford their loans from filing bankruptcy just to 
capitalize on falling real estate prices and to get a better deal when 
there are so many more who are truly in need.
  This bill is not perfect, but the process has worked better than 
anyone expected. Over the last couple of weeks, we have worked together 
to make improvements that will ensure that bankruptcy is an option of 
last resort.
  Accessible and sustainable loan modifications are essential to 
getting millions of families the tools they need to keep their homes. 
Along with President Obama's Making Home Affordable Plan, this bill 
will provide these tools, and it will offer a comprehensive plan to 
address our Nation's foreclosure crisis.
  Ms. ZOE LOFGREN of California. To my friend, I want to also thank you 
for the good-faith discussions and negotiations we've had. I appreciate 
your support for this bill and your work toward a sustainable loan 
modification program.
  The SPEAKER pro tempore. The time of the gentlewoman has expired.
  Mr. HASTINGS of Florida. I yield the gentlewoman an additional 2 
minutes.
  Ms. ZOE LOFGREN of California. I agree with you that loan 
modifications are a key component to a comprehensive plan.
  I thank my friend, Mrs. Tauscher, for her thoughtful work on this 
matter. It has made this bill a better bill and one that, I think, we 
can all be proud of. I appreciate your effort.
  I would yield further.
  Mrs. TAUSCHER. Thank you. I thank my good friend from California (Ms. 
Zoe Lofgren) for her very intensive work to make this a better bill, 
and I appreciate the changes that have been made to this bill.
  I urge my colleagues to support the significant engagement process to 
get a better bill by voting for the rule, and I will tell my colleagues 
that this is a better bill, that this is something that will help all 
Americans by making sure that the bankruptcy process through Chapter 13 
is available to those who need it, but at the same time, that it is

[[Page H2988]]

the option of last resort. Most significantly, it puts the President's 
loan modification plan as the centerpiece of opportunities to keep 
millions of Americans in their homes. I urge my colleagues to vote for 
the bill.
  Ms. ZOE LOFGREN of California. Thank you.
  I would just note further the participation of others in Congress who 
worked to make this a better bill: our colleague Dennis Cardoza, who is 
part of the second-degree Lofgren-Tauscher-Cardoza amendment, as well 
as Congressman Brad Miller, Congressman Jim Marshall, and of course the 
chairman of the committee, Congressman John Conyers. Thanks to all who 
worked so hard on this.
  Ms. FOXX. Mr. Speaker, I now yield 4 minutes to the gentleman from 
Wisconsin, my distinguished colleague, Mr. Sensenbrenner.
  Mr. SENSENBRENNER. Mr. Speaker, I rise in opposition to the rule and 
to the underlying bill.
  What we have just heard is that the amendments that will modify the 
Conyers manager's amendment are going to solve the problems and 
concerns that were raised last week. This is not the case, and the 
modification that this rule makes in order still makes this 
modification of the bankruptcy law smoke and mirrors. The devil is 
really in the details, and let me point out three instances where the 
details make this amendment a sham.
  First of all, it gives a defaulting homeowner two bites at the apple. 
Far from making bankruptcy a last resort, it allows it to guarantee 
abuse of the system. If the homeowner obtains a mortgage modification 
that is compliant with the President's terms, he still can file for 
bankruptcy, but the lender is bound by the modifications under the 
President's program should it be enacted into law. So the borrower and 
the bankruptcy attorneys can shop around and can find out which is the 
better deal for the homeowner. That's something that we deny the lender 
the opportunity to do, and this is a guarantee of abuse of the system.
  Secondly, this amendment encourages happy-go-lucky borrowers. Nothing 
happens to a borrower who rejects the terms under the President's 
mortgage modification plan. The bankruptcy court can theoretically 
refuse to confirm a borrower's cramdown plan, but under the terms of 
the amendment, that will likely happen only when the lender is offered 
a modification anyhow.
  What about borrowers who are within 30 days of a foreclosure sale? 
They don't even have to contact their lenders under this amendment 
about voluntary modifications, so none of this amendment's 
modifications and accommodations apply. The new manager's amendment 
does nothing to change this exception that swallows the bill, and as a 
result, cagey borrowers and their attorneys can game the system by 
simply waiting until the borrowers are within 30 days of a foreclosure 
sale to file for bankruptcy.
  Finally, this bill allows free money to be offered. The amendment 
provides an alternative to cram down a principal, but astoundingly, the 
alternative is free money. If a judge doesn't want to give a cramdown, 
he can just rewrite the mortgage as a no-interest loan over the full 
terms of a new 30-year, fixed-rate mortgage. Lenders can kiss their 
principal goodbye because the amendment seeks to resuscitate the 
earlier agreement to let lenders claw back and cram down principal if 
the borrower sells the house after a cramdown.

                              {time}  1045

  But the clawback is a sham. Once the borrower emerges from 
bankruptcy, the lender gets nothing back from the crammed-down 
principal, and since the point of the bill is to help the borrowers 
stay in the house during bankruptcy, sales aren't going to occur until 
after bankruptcy--when the lenders' clawback is worthless.
  The bankruptcy law since 1898 has prohibited bankruptcy judges from 
rewriting the terms of mortgages that are placed on principal 
residences. There is a reason for that, and the reason is simple: it 
allows the mortgage industry to attract more capital to lend out to 
qualified borrowers at reasonable rates. If the capital isn't there, 
and the capital is not attracted, then what you will see is the cost of 
mortgages go up, whether it's in interest rates, points, fees or 
whatever.
  It seems to me that Congress did the right thing during the 
depression in not changing this law. We should not change the law 
today.
  Mr. HASTINGS of Florida. Mr. Speaker, I would advise the Chair and 
the gentlelady from North Carolina that I may have an additional 
speaker, but he or she has not arrived yet, and toward that end, I 
would reserve my time.
  Ms. FOXX. Mr. Speaker, I thank my colleague. We do have several 
speakers, Mr. Speaker.
  I would now like to recognize my colleague, the gentleman from New 
York, Mr. Chris Lee, for 2 minutes.
  Mr. LEE of New York. I thank the gentlelady from North Carolina for 
yielding.
  I rise today to oppose the rule and underlying ``cramdown'' bill, 
which will allow bankruptcy judges to arbitrarily rewrite the amount of 
principal owed on a home mortgage loan.
  I recently received an e-mail from a constituent in Byron, New York, 
who said he lost $50,000 on a previous home he had recently sold. He's 
a hardworking individual in my district who accepted that but ended his 
e-mail by asking, ``Are we now going to be expected to pay for someone 
else's losses when I'm struggling to keep paying my own mortgage?''
  I receive calls, faxes, e-mails like these every day from homeowners 
who work hard trying to make ends meet only to be asked to help those 
who either have made poor decisions or who acted purely for personal 
gain by speculating on the market.
  Yet in this bill, part of Congress' response is to change the 
Nation's bankruptcy laws and to allow judges arbitrarily to rewrite the 
amount of principal on mortgages. This will open up a Pandora's box on 
government intervention and will have the exact opposite effect than 
what is needed during these very tough economic times.
  When I talked to our community banks and ask how they have been able 
to prevent foreclosures, they point to a combination of sound lending 
practices and access to credit. It is in the banks' best interests to 
work with borrowers to help them stay in the homes. And, in fact, they 
are doing that now. Allowing bankruptcy judges to intervene would add 
additional risk to the market. It will help push that more mortgages 
won't be repaid and forcing lenders to tighten credit and raise 
borrowing costs for all homeowners at the worst possible time.
  I ask my colleagues to vote down this rule so we can keep this 
Pandora's box closed and get back to work on truly sensible practices 
that will help keep the dream of homeownership within reach of middle-
class families.
  Mr. HASTINGS of Florida. Mr. Speaker, I am very pleased to yield 2 
minutes to Ms. Lofgren.
  Ms. ZOE LOFGREN of California. Mr. Speaker, I just wanted to say a 
word about the manager's amendment to make sure that everyone is clear.
  The second-degree amendment is going to make sure that fairness is 
restored to the bankruptcy laws to give needed relief to homeowners at 
a time when there is a truly historic crisis in the housing market.
  The manager's amendment strengthens the good faith provisions of the 
bill to ensure that borrowers who can't afford to pay their debts do 
so. The good faith provision also requires the court to take into 
consideration an offer of a qualified loan modification. And when an 
affordable loan modification is available, we want homeowners to take 
that route.
  The manager's amendment also advises courts to consider the 
Treasury's guidelines in crafting modifications, and in doing so, it 
works seamlessly with the Obama administration's Making Homes 
Affordable Plan. In both instances, fairness and affordability are the 
touchstones.
  It doesn't make any kind of sense that relief in Chapter 13 is denied 
to homeowners while it is provided to speculators and investors, which 
is what the current law provides. By changing the law, we've restored 
basic fairness to the system.
  In addition to the heightened good faith requirement, the amendment 
would extend the pre-filing notice from 15 to 30 days and require the 
debtor to submit financial documentation to the lender so a meaningful 
negotiation

[[Page H2989]]

could take place. It also enhances the clawback provision to increase 
the amount of appreciation returning to the lender if a home should be 
sold for profit after judicial modification.
  I really, as I said earlier, want to thank my colleagues, Mrs. 
Tauscher, Mr. Cardoza, Mr. Marshall, and Mr. Miller for their efforts.
  The SPEAKER pro tempore. The time of the gentlewoman has expired.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield the gentlelady an 
additional 1 minute.
  Ms. ZOE LOFGREN of California. Bankruptcy should be a last resort. 
And I'll tell you, bankruptcy is no picnic. For an extended period of 
time, all of the debtor's personal financial life is in public. You 
can't spend anything without permission of the court. You can't tithe 
to your church unless the bankruptcy judge says ``okay.'' Santa can't 
come to your house on Christmas unless the court permits expenditures 
for a toy. It is a permanent mark on your record.
  And so to think that someone would go into that proceeding 
frivolously with that kind of stain, that burden and that kind of a 
stigma, is just not realistic. And I hope the people understand this is 
not something that people do in a frivolous way or an unthoughtful way.
  Ms. FOXX. Mr. Speaker, I would like to ask that my colleagues on the 
other side of the aisle put the microphones close to their mouths 
because there are times we can't understand the words over here because 
the volume is not coming through.
  I would like to say that I understand my colleague is very concerned 
about the issue of fairness, but I think that we need to think about 
those people who played by the rules and not those who tried to go 
around the rules. We're not being fair to those people.
  I would now like to yield 2 minutes to the gentleman from Iowa (Mr. 
King).
  Mr. KING of Iowa. Mr. Speaker, I'd like to thank the gentlelady from 
North Carolina for yielding.
  I rise in opposition to this rule. And I rise, of course, in 
opposition to the underlying bill as well.
  But speaking to the rule, my argument's about process. There's a 
tremendous amount of fraud that's taking place in the mortgages in this 
country, and people that have relief under this should have clean 
hands. And in recognizing that, I introduced an amendment in the 
Judiciary Committee that would exclude those who have misrepresented 
or, under false pretenses or actual fraud, achieved an extension of 
their mortgage and then brought this to the bankruptcy court. We've got 
to have people with clean hands, not those that are taking advantage of 
this situation. The door has already been opened. This opens the door 
more.
  My amendment, Mr. Speaker, passed the Judiciary Committee by a vote 
of 21-3. It was a prudent decision on the part of the members of the 
committee. It's the judgment of the Judiciary Committee. The problem 
with it was that it was stripped out after the committee approved it 
and sent it to Rules as part of a change in a manager's amendment.
  I took my amendment back to Rules to try to get back the process. The 
process ought to respect the will of the Judiciary Committee. The Rules 
refused to even allow me to offer my amendment here on the floor to try 
to get another recorded vote even when I'd been successful in Judiciary 
Committee. And now there's another manager's amendment before this 
committee that amends the amendment that was amended by the previous 
manager's amendment after it passed the Judiciary Committee. The will 
of the Judiciary Committee means nothing in this bill. It's the will of 
the manager's amendment that will be voted on here on the floor of this 
Congress.
  I argue for the process. I argue we have to have a clean process. I 
also think that we have to maintain the covenant of the contract 
between the mortgager and the mortgagee. This amendment doesn't do 
that. This amendment tears that contract asunder and says to lenders 
that their capital's at risk and their interest rate is at risk. Why 
would anyone loan anybody money unless they could calculate in the risk 
that some judge would change the rules after the fact, just like the 
rules of the Judiciary Committee on a successful 21-3 vote have been 
changed after the fact?
  Mr. Speaker, I oppose the rule.
  Mr. HASTINGS of Florida. Mr. Speaker, I would say to my friend when 
he asked the question, why would anybody offer money for people if they 
knew that a bankruptcy judge was going to modify it--but what about 
those private jets? They tend to loan money for them. And I know a 
whole lot of rich people that went into bankruptcy for the express 
purpose of avoiding paying bills. So I don't buy into that argument. 
We're about trying to help people here.
  Mr. Speaker, I yield 2 minutes to the distinguished lady from Texas.
  Ms. FOXX. Mr. Speaker, I would like to ask the gentleman if he would 
yield for a question.
  Mr. HASTINGS of Florida. At this time, I will not.
  I will yield 2 minutes to the gentlewoman from Texas (Ms. Jackson-
Lee).
  (Ms. JACKSON-LEE of Texas asked and was given permission to revise 
and extend her remarks.)
  Ms. JACKSON-LEE of Texas. I came to the floor, Mr. Speaker, because I 
wanted to make sure that this was the day that the United States 
Congress addressed the question of responsible, hardworking Americans.
  I came to the floor with my BlackBerry because there's a message 
about one of our renowned mortgagers, Countrywide, that is in the 
process of evicting one of my constituents--a hardworking, long-
standing, if you will, working American trying to save their home. Long 
message as to what has been going on in this instance and the 
insensitivity of the mortgager.
  So today is a day for being responsible. It is not a day for those 
who have, in essence, been irresponsible. It is a day to allow them, as 
every American has a right, their day in court with a judge with a 
fine-tooth comb who will review all of the documents and even including 
the responsibility of that particular petitioner to include all of the 
information on income, expenses and debts to the holder of the 
mortgage, with the second amendment including a particular clawback 
provision that increases the amount of money that the lender might get 
if the particular house was sold.
  In addition, I am supporting this rule, but I do look forward to the 
conference, which I hope that I will be a participant, because, in 
fact, if these individuals are victims of predatory lending, which many 
of them have been--meaning that they would go to a servicer who would 
masquerade their documents and say they can get into a house--this 
particular action of bankruptcy should not be part of the credit score 
which then dumbs down the opportunity for this individual to restore 
themselves, get back into the economic market, be able to get credit, 
be able to buy things and turn this economy.
  The SPEAKER pro tempore. The time of the gentlewoman has expired.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield an additional minute to 
the gentlewoman.
  Ms. JACKSON-LEE of Texas. I thank the distinguished gentleman.
  This is a fair and reasonable bill, along with the manager's 
amendment that, in fact, allows this particular homeowner, the person 
that is in this BlackBerry that is in the midst of an eviction having 
purchased a house in honesty with the lights on, putting forward the 
documentation but yet being subjected to that well-known mortgager, 
Countrywide, that gave vast numbers of, if you will, mortgages in the 
context that might not have been the most appropriate.
  Today we are allowing the courts of law, the established bankruptcy 
court--established statutorily and protected by the Constitution--to 
allow someone due process. That's all we're saying, Mr. Speaker.
  And all of this about irresponsible persons offends me because there 
are thousands, and now millions, of families who are simply trying to 
say, Keep the tax base for my struggling city, allow my neighbors to 
not have their homes depreciated because I have had the unfortunate 
mistake of being misrepresented to. Some of these people are still 
working.
  I close by saying 3,500 people are in line for a job. Today is the 
little person's opportunity.
   Mr. Speaker, thank you for your leadership on this very important 
question. Chairman Conyers and Chairman Frank, I would like to

[[Page H2990]]

also thank you for your leadership. Lastly, I would like to thank my 
able Legislative Director, Arthur Sidney, for his hard work on this 
issue.
  The bill before us today is very important and will help Americans 
during this difficult economic time. As you know, home foreclosures are 
at an all-time high and they are poised to accelerate as the recession 
deepens. In 2006, there were 1.2 million foreclosures in the United 
States, representing an increase of 42 percent over the prior year. 
During 2007 through 2008, mortgage foreclosures were estimated to 
result in a whopping $400 billion worth of defaults and $100 billion in 
losses to investors in mortgage securities.
  During this time, debtors and average homeowners found themselves in 
the midst of a home mortgage foreclosure crisis of unprecedented 
levels. Many of the mortgage foreclosures were the result of subprime 
lending practices.
  Subprime lending did not always have a bad name; however, within the 
last five to seven years, unscrupulous lenders have preyed upon buyers 
in a predatory fashion. The amendment that I offered before the Rules 
Committee was intended to address this issue.Specifically, my amendment 
would preclude a foreclosure and bankruptcy that resulted from subprime 
and predatory lending from being included in the determination of a 
debtor's creditor score. Certainly, a debtor's declaration of 
foreclosure or bankruptcy has a deleterious effect on one's credit 
score.
  This makes a bad situation, worse. If a debtor has poor credit to 
begin with and is forced to declare bankruptcy or is forced into 
foreclosure, this combination would make it almost impossible for a 
debtor to secure credit in the future. A lowered credit score results 
in a downward spiral for the debtor and ultimately leads to an economic 
quagmire for the debtor.


                              MY AMENDMENT

  I offered the following amendment to be included in the bill:

     SEC. 205. FORBEARANCE IN CREATION OF CREDIT SCORE

        (a) In General.--Section 609 of the Fair Credit Reporting 
     Act (15 U.S.C. 1681g) is amended by adding at the end the 
     following new subsection:
       ``(h) Foreclosure on Subprime Not Taken Into Account for 
     Credit Scores.--
       ``(1) In general.--A foreclosure on a subprime mortgage of 
     a consumer may not be taken into account by any person in 
     preparing or calculating the credit score (as defined in 
     subsection (f)(2)) for, or with respect to, the consumer.
       ``(2) Subprime defined.--The term `subprime mortgage' means 
     any consumer credit transaction secured by the principal 
     dwelling of the consumer that bears or otherwise meets the 
     terms and characteristics for such a transaction that the 
     Board has defined as a subprime mortgage.''.
       (b) Regulations.--The Board shall prescribe regulations 
     defining a subprime mortgage for purposes of the amendment 
     made by subsection (a) before the end of the 90-day period 
     beginning on the date of the enactment of this Act.
       (c) Effective Date.--The amendment made by subsection (a) 
     shall take effect at the end of the 30-day period beginning 
     on the date of the enactment of this Act and shall apply 
     without regard to the date of the foreclosure:

  My amendment would have prevented homeowners and debtors, who were 
facing mortgage foreclosure as a result of the unscrupulous and 
unchecked lending of predatory lenders and financial institutions, from 
having their mortgage foreclosure count against them in the 
determination of their credit score. It is an equitable result given 
that the debtors ultimately faced mortgage foreclosure because of the 
bad practices of the lender.
  Simply put, my amendment would have prevented homeowners who have 
declared mortgage foreclosure as a result of subprime mortgage lending 
and mortgages from having the foreclosure count against the debtor/
homeowner in the determination of the debtor/homeowner's credit score.
  The homeowners should not be required to pay for the bad acts of the 
lenders. It would take years for a homeowner to recover from a mortgage 
foreclosure. My amendment strengthens this already much needed and well 
thought out bill.
  I am delighted that the Judiciary Committee has indicated that my 
language will be included in the Conference language. I look forward to 
having my staff work with the Committee to achieve this end.
  There were four amendments that were made in order by the Rules 
Committee. I will address my support or non-support for each amendment.


                           CONYERS AMENDMENT

  I support the Manager's Amendment offered by Chairman Conyers. The 
amendment makes sense and makes clear that H.R. 1106 is intended to 
help those that cannot afford to repay their mortgage without 
intervention. Indeed it is strength to the underlying bill by providing 
finality to the decisions worked out by the bankruptcy courts. These 
decisions would provide finality between lenders and borrowers. 
Moreover, the debtors are afforded certain protections by the Second 
Degree Amendment. The Second Degree Amendment provides that the lender 
could receive additional funding from the sale of the foreclosed home.
  The Manager's Amendment would do the following:
  (1) require courts to use FHA appraisal guidelines where the fair 
market value of a home is in dispute;
  (2) deny relief to individuals who can afford to repay their 
mortgages without judicial mortgage modification; and
  (3) extend the negotiation period from 15 to 30 days, requiring the 
debtor to certify that he or she contacted the lender, provided the 
lender with income, expense and debt statements, and that there was a 
process for the borrower and lender to seek to reach agreement on a 
qualified loan modification.
  The Conyers Amendment would require a GAO study regarding the 
effectiveness of mortgage modifications outside of bankruptcy and 
judicial modifications, whether there should be a sunset, the impact of 
the amendment on bankruptcy courts, whether relief should be limited to 
certain types of homeowners. The GAO must analyze how bankruptcy judges 
restructure mortgages, including the number of judges disciplined as a 
result of actions taken to restore mortgages.
  The Conyers Amendment would clarify that loan modifications, workout 
plans or other loss mitigation plans are eligible for the servicer safe 
harbor. Further, it would require HUD to receive public input before 
implementing certain FHA approval provisions.
  With respect to the HOPE for Homeowners Program: recasts the 
prohibition against having committed fraud over the last 10 years from 
a freestanding prohibition to a borrower certification. The Conyers 
Amendment would amend the National Housing Act to broaden eligibility 
for Home Equity Conversion Mortgage (HECM) or ``reverse mortgage.''
  Provides that the GAO must submit to Congress a review of the effects 
of the judicial modification program.
  Requires the Comptroller of Currency, in coordination with the 
Director of Thrift Supervision, to submit reports to Congress on the 
volume of mortgage modifications and issue modification data collection 
and reporting requirements.
  Expresses the Sense of Congress that the Treasury Secretary should 
use amounts made available under the Act to purchase mortgage revenue 
bonds for single-family housing.
  Expresses the Sense of Congress that financial institutions should 
not foreclose on any principal homeowner until the loan modification 
programs included in H.R. 1106 and the President's foreclosure plan are 
implemented and deemed operational by the Treasury and HUD Secretaries.
  Establishes a Justice Department Nationwide Mortgage Fraud Task Force 
to coordinate anti-mortgage fraud efforts. Would provide that the 
Treasury Secretary shall provide that the limit on the maximum original 
principal obligation of a mortgage that may be modified using EESA 
funds shall not be less than the dollar limit on the maximum original 
principal obligation of a mortgage that may be purchased by the Federal 
Home Loan Mortgage Corporation that is in effect at the time the 
mortgage is modified.


                          PRICE, TOM AMENDMENT

  I oppose the Price Amendment. The Price Amendment provides that if a 
homeowner who has had a mortgage modified in a bankruptcy proceeding 
sells the home at a profit, the lender can recapture the amount of 
principal lost in the modification.
  I oppose the Price Amendment for the following reasons.
  First, the Price amendment would make homeowners into renters for 
life. It will lead to poorly maintained homes and lower property values 
for all of us. It takes away any incentive for homeowners to maintain 
their homes or insist on competitive sale prices.
  Second, the Manager's Amendment already allows lenders to get back a 
substantial portion of any amount a home appreciates after bankruptcy. 
But it leaves in place incentives for homeowners to maintain and 
improve homes.
  Third, the Price Amendment is opposed by the Center for Responsible 
Lending, Consumers Union, Leadership Conference on Civil Rights, 
National Association of Consumer Advocates, National Association of 
Consumer Bankruptcy Attorneys, National Community Reinvestment 
Coalition, National Consumer Law Center, National Legal Aid and 
Defender Association, National Policy and Advocacy Council on 
Homelessness, and USPIRG.
  For the foregoing reasons, I oppose the Price Amendment and I urge my 
colleagues to vote ``no'' on this amendment.

[[Page H2991]]

                         PETERS, GARY AMENDMENT

  I support this amendment. This amendment is straightforward and is 
intended to help the borrower by providing a last clear chance to 
garner much needed information. It is my hope that this information 
would be used to provide financial assistance and education to the 
consumer.
  In many cases, proper education about the use of credit and mortgages 
could have made all the difference in the consumers choices. Simply 
put, if the consumers made wise and informed credit decisions in the 
first instance, they might not have been in bankruptcy or facing 
foreclosure. I find this amendment incredibly prudent and helpful to 
debtors and consumers. I urge my colleagues to support this amendment.


                            TITUS AMENDMENT

  The Titus Amendment would require a servicer that receives an 
incentive payment under the HOPE for homeowners to notify all 
mortgagors under mortgages they service who are ``at-risk homeowners'' 
(as such term is defined by the Secretary), in a form and manner as 
shall be prescribed by the Secretary, that they may be eligible for the 
HOPE for Homeowners Program and how to obtain information regarding the 
program.
  The HOPE for Homeowners (H4H) program was created by 
Congress to help those at risk of default and foreclosure refinance 
into more affordable, sustainable loans. H4H is an 
additional mortgage option designed to keep borrowers in their homes. 
The program is effective from October 1, 2008 to September 30, 2011.


                         How the Program Works

  There are four ways that a distressed homeowner could pursue 
participation in the HOPE for Homeowners program:

   1. Homeowners may contact their existing lender and/or a new lender 
to discuss how to qualify and their eligibility for this program.
  2. Servicers working with troubled homeowners may determine that the 
best solution for avoiding foreclosure is to refinance the homeowner 
into a HOPE for Homeowners loan.
  3. Originating lenders who are looking for ways to refinance 
potential customers out from under their high-cost loans and/or who are 
willing to work with servicers to assist distressed homeowners.
  4. Counselors who are working with troubled homeowners and their 
lenders to reach a mutually agreeable solution for avoiding 
foreclosure.
  It is envisioned that the primary way homeowners will initially 
participate in this program is through the servicing lender on their 
existing mortgage. Servicers that do not have an underwriting component 
to their mortgage operations will partner with an FHA-approved lender 
that does.
  Because I am committed to helping Americans obtain homes and remain 
in their homes, I support the HOPE for Homeowners Program and I support 
this amendment. I urge my colleagues to support this bill. Indeed, I 
feel personally vindicated that Congress has set aside $100 bill to 
address the issue of mortgage foreclosure, an issue that I have long 
championed in the 110th Congress.
  All in all, the rule makes sense. The amendments that I support will 
make this bill much stronger and will benefit more Americans. I urge my 
colleagues to support the Conyers, Peters, and Titus Amendments.

                              {time}  1100

  Ms. FOXX. Mr. Speaker, I now am pleased to yield 2 minutes to my 
colleague from Pennsylvania (Mr. Shuster).
  Mr. SHUSTER. I thank the gentlewoman for yielding.
  With our current economic situation, I think it's vital that we 
encourage responsibility. Congress is spending all of its time and 
energy rewarding those who have acted irresponsibly. We must not ignore 
those who have played by the rules and lived within their means.
  Responsible homeowners are being left out of the equation, and that 
must change. We must recognize responsibility. For just that reason, 
last night I introduced legislation to give responsible homeowners who 
have paid and continue to pay their mortgages on time a $5,000 tax 
credit. This isn't another bailout or a taxpayer-backed debt 
obligation. It's a way for hardworking American families to keep more 
of the money that they earn so they can keep acting responsibly and 
help our economy grow. Just because responsible homeowners are paying 
their mortgages on time does not mean that they don't need help. The 
administration claims their plan will help one in nine homeowners. My 
commonsense plan helps the other eight of nine homeowners the 
administration and the Democrats ignore.
  Mr. Speaker, this is simple. We cannot continue the policies pursued 
by the administration and my Democratic colleagues that reward 
irresponsibility and dependency. To pull ourselves out of this crisis 
we need real change. We must pursue policies that foster a culture of 
responsibility. So I urge my colleagues to take a look at my 
legislation and support it, because my plan does do just that.
  Mr. HASTINGS of Florida. Mr. Speaker, I am very pleased to yield 2 
minutes to my good friend from Missouri, a member of the Financial 
Services Committee, Representative Cleaver.
  Mr. CLEAVER. Mr. Speaker, I'd like to share a letter that I received 
from an attorney in my district. The attorney, Sidney Willens, wrote me 
this letter, and it is, in essence, a letter that supports this rule.
  He says, ``Dear Congressman Cleaver, let me tell you a story of Mrs. 
Sherrita Richardson, a 37-year-old African American mother of four, a 
bus driver for 9 years. Four years ago, Mrs. Richardson acquired a 
house in your district at 3413 East 60th Street with an inflated 
appraisal of $93,000, requiring a 10 percent down payment she didn't 
have. Yet, virtually penniless, Mrs. Richardson acquired title to a 
house for $93,000. A mortgage broker purchased a $9,300 cashier's check 
payable to the seller, made a copy to show the 10 percent down payment 
was made, then redeemed the $9,300 check 24 hours later.''
  He goes on to say, ``The need for bankruptcy judges to reduce 
mortgage balances consistent with current fair market values is 
absolutely essential if we're to get out of this economic mess.''
  For those who give hope to ``mortgage modification,'' let me say one 
thing; mortgages have been modified by crooks using the adjustable rate 
mortgage--they modified mortgages, they did it as hoodlums. And there 
is no reason for the Congress of the United States of America not to 
step in and try to help people who've been ripped off in the name of 
good business.
  Ms. FOXX. Mr. Speaker, I now yield 3 minutes to my colleague from 
California (Mr. Royce).
  Mr. ROYCE. Mr. Speaker, many of us have read the Peruvian economist 
book, Hernando de Soto's book, ``The Mystery of Capital: Why Capitalism 
Succeeds in the West and Fails Everywhere Else.'' It's a best seller in 
the developing world.
  The importance of that book in a lot of the world is it explains to 
people why it is that interest rates are so low here, why it is that 
we're so successful in the percentages of mortgages that we're able to 
grant in the United States. And it is the sanctity of that contract, it 
is the certainty of that mortgage contract. And the great fear I think 
many of us have here is that if we start down the road to writing down 
the principal in that contract, we are going to end up moving in the 
direction, as de Soto would say, of the difference between the First 
World and the Third World. We are not going to be able to have interest 
rates that are around 6 or 7 percent.
  Is there a way that Treasury has developed as an alternative to this 
scheme? Yes, they have. They have developed a way to have mortgage 
servicers work out these Alt-A loans that we're talking about today, 
these ARMs that might go to 8\3/4\, and to work that out into 30 years 
at 6 percent that's affordable for people. And we've had 2.3 million of 
those workouts by the end of last year.
  But now, here we are, instead of doing the voluntary arrangement and 
putting resources in to do that--which is what we intended to do, I 
think, as we started this process--we're, instead, listening to the 
bankruptcy attorneys with an alternative approach. And that approach is 
to set this up so that it can be gamed in a way that knocks down the 
amount of the principal. And if we do that, we're right back to where 
Chief Justice of the Supreme Court John Paul Stevens said we would be 
in the case of Nobleman v. American Savings Bank. He said, you do 
this--there's a reason why that mortgage contract is held in the law 
the way it is. If you manage to reduce that principal, then the 
consequence is going to be that capital is not going to come in and 
drive down interest rates.

[[Page H2992]]

  My concern here is that the difference between what people pay on the 
market for credit card rates or auto loan rates and interest rates on 
their home mortgage is a huge sum of money. And in order to empower 
these bankruptcy judges to go forward and take advantage of this and 
open this up, then the investors on the other side of the--let me throw 
one other thought out there besides the impact it's going to have on 
interest rates.
  Think now about what happens with the HOPE NOW Alliance, where people 
at the table are trying to get that 30-year loan at 6 percent. Are 
either the borrower or the lender going to stay at that table when they 
think, oh, no, here's an alternative: we go to bankruptcy court, we 
write down the amount of that principal? No, my friends. We're headed 
down a road here that is very, very ill-advised.
  If you want to do workouts in terms of lowering the interest rate, 
that's one thing, and there is a way we can do it. We can put more 
resources in there that the mortgage servicers can use to do that. But 
this is the wrong road.
  Mr. HASTINGS of Florida. Mr. Speaker, I am very pleased to yield 2 
minutes to my good friend, the gentleman from Texas (Mr. Al Green).
  Mr. AL GREEN of Texas. I thank the Member from Florida for yielding 
the time. I am honored to be associated with this piece of legislation.
  Mr. Speaker, the words that come to mind, as we debate this issue, 
the words that comes to mind are, ``at last.'' At last we are now 
embracing help for homeowners. We have worked for Wall Street, we have 
worked to do something for Main Street; it is now time to do something 
for ``Home Street,'' the street where people live, the street where 
people have their greatest investment.
  Let's talk for just a moment about the concerns with reference to 
allowing bankruptcy to become a part of this process. My dear friends, 
bankruptcy is already a part of the process. If you own two, three, 
four or five homes, you may modify those homes in bankruptcy. If you 
only own one home as your principal home, that home is excluded from 
bankruptcy. The bankruptcy process ought to embrace people who have not 
been as fortunate as those who have five homes to the same extent that 
it embraces people who have but one place to call home. It is time to 
bring some equity into the process.
  This equity is not prospective, it is retrospective. It only applies 
to homes that were closed on prior to the bill being enacted. It does 
not go forward. So this argument that it embraces interest rates into 
the future is not a correct argument. It only embraces the past, not 
the future.
  And finally, I would say to you, as this is done, the homeowner has 
to attempt a workout before there can be judicial modification.
  The safeguards are there. The opportunity is before us. The question 
is, do we want to protect Home Street to the same extent that we want 
to protect Main Street and Wall Street? There are people who are 
suffering, this is the opportunity to help them.
  Ms. FOXX. Mr. Speaker, I am very pleased to yield 5 minutes to the 
ranking member of the Judiciary Committee, Mr. Smith from Texas.
  Mr. SMITH of Texas. Mr. Speaker, I thank the gentlewoman from North 
Carolina for yielding.
  Mr. Speaker, our country has fallen into a serious economic 
recession, a recession that is worsened by the foreclosure crisis.
  Until we address the rising number of foreclosures, it will be 
difficult for the economy to recover. Some of what is in this bill we 
consider today will be helpful, such as providing loan officers a safe 
harbor from the threat of litigation if they offer borrowers meaningful 
loan modifications. But the bill also includes many counterproductive 
components, especially the bankruptcy provision. This bankruptcy 
provision not only will fail to solve the foreclosure crisis, but also 
will make the crisis deeper, longer and wider. Allowing bankruptcy 
judges to rewrite mortgages will increase the overall cost of loaning. 
Lenders and investors will hesitate to put up capital in the future if 
they fear that judges will rewrite the terms of their mortgage 
contracts. Less available capital and increased risk means that 
borrowers will pay higher interest rates in the future.
  Allowing bankruptcy judges to rewrite mortgages will also encourage 
borrowers who owe more money on their mortgage than their house is 
worth to file for bankruptcy. Under this bill, a borrower will be able 
to reduce, for example, a $300,000 mortgage to $200,000. When housing 
prices rise in the future, that borrower has no obligation to pay back 
the $100,000, which of course amounts to a windfall.
  Experts predict that this will provide an incentive for borrowers to 
file for bankruptcy so that they can avoid repaying the entire amount 
they owe. Also, if bankruptcy filings increase as a result of this 
legislation--which is virtually predicted by everyone--it is unlikely 
that the country's only 368 bankruptcy judges could handle perhaps 
millions of cases. This will prolong the crisis as borrowers wait years 
for their bankruptcy plan to be court approved.
  In fact, even Senator Durbin, the primary sponsor of this legislation 
in the Senate, stated that he is ``willing to restrict'' this 
legislation to subprime mortgages in an effort to make this proposal 
``reasonable.''
  Because it has been suggested that Senator Durbin did not make these 
comments, I would like to submit the transcript of Senator Durbin's 
remarks to be made part of the Record.
  Mr. Speaker, the legislation we are considering today in the Housing 
Affordability and Stability Plan really amounts to another entitlement 
program, a program that comes at the expense of the 92 percent of 
homeowners who are making their payments on time. And it is a program 
that benefits lenders who wrote irresponsible loans and borrowers who 
borrowed more than they could afford. In other words, this legislation 
will punish the successful, tax the responsible, and hold no one 
accountable.
  If we pass this legislation, what message does it send to responsible 
borrowers who are making their payments on time? How can we ask them to 
foot the bill for their neighbors' mortgages? What do homeowners think 
as they pay back the full amount of principal they owe while others 
receive a government-granted reduction in principal?
  Mr. Speaker, we need to do everything we can to help solve the 
foreclosure crisis, but we need to do so in a manner that doesn't 
bankrupt the taxpayers or our financial system and that is fair to all. 
Unfortunately, this bill does not do that.

                 [From American Banker, Feb. 27, 2009]

                  Transcript of Remarks by Sen. Durbin

       The following is a transcript of remarks between Sen. 
     Richard Durbin and an American Banker reporter, Tuesday 
     evening after President Obama's speech to Congress.
       AB Reporter: ``Sen. Durbin, do you have a moment today on 
     bankruptcy reform?''
       Sen. Durbin: ``Sure.''
       AB Reporter: ``I know that in the House, at least regarding 
     this week, the lenders are still trying to make the 
     restrictions so that you have to exhaust all other recourses 
     before bankruptcy pretty tough, even today I heard about 
     making HUD or one of the regulators certify that you had a 
     modification or something that didn't work before you could 
     go through bankruptcy. What are your thoughts on what the 
     standard ought to be?''
       Sen. Durbin: ``I think that it is reasonable to require the 
     borrower to be in communication for a reasonable time before 
     they file for bankruptcy. You know if a borrower will not 
     talk to a bank they should not be able to avail themselves 
     but it's really difficult to write into law a measurement of 
     good faith so the best you can do is give them an opportunity 
     to meet. Remember 99% of foreclosed homes end up owned by the 
     bank so it isn't as if they are going to end up coming out 
     ahead if the person's losing their home. They get stuck with 
     $50,000 in costs and a house to maintain; to protect from 
     vandalism, and to show and try to sell, so the banks ought to 
     be much more forthcoming. Every attempt we've tried, every 
     voluntary attempt we've tried has failed. You have to have 
     this bankruptcy provision as the last resort if there is a 
     failure to negotiate the mortgage.''
       AB Reporter: ``Do you know when the Senate might be taking 
     this up?''
       Sen. Durbin: ``After the House and we might change it of 
     course. There are variations we're looking at. But I'm 
     willing to restrict this to homeowners to eliminate 
     speculators; to subprime mortgages, only those currently in 
     existence. I want to make this a reasonable limited--
       AB Reporter: ``You're willing to limit it to subprime 
     mortgages?''
       Sen. Durbin: ``We've talked about that as a possibility. 
     But I am willing to negotiate. I want this to be a reasonable 
     approach, but we have to include it. If we don't include it 
     we'll be stuck in the same mess we're in today.''
       AB Reporter: ``What about the time limitation as far as 
     when the loans were originated. I understand there are some 
     who

[[Page H2993]]

     would like to see it limited to loan underwritten in the last 
     few years?''
       Sen. Durbin: ``My version will not be prospective. So it 
     has to be existing loans.''

  Mr. HASTINGS of Florida. Mr. Speaker, I am very pleased to yield 1 
minute to the distinguished chairperson of the Committee on the 
Judiciary, my good friend, Mr. Conyers.
  Mr. CONYERS. I thank the floor manager, Judge Hastings, for his 
kindness.
  And I only rise to thank Dr. Foxx for her appreciation and pointing 
out to me one thing that we have added now to the manager's amendment, 
and that is the requirement of studies by the Government Accountability 
Office and other agencies, including the Office of Comptroller of 
Currency and the Office of Thrift Supervision. She appreciated that in 
the Rules Committee, I'm sure she does now, and I thank her for that 
important contribution.
  And I would yield to her.
  Ms. FOXX. If I could engage in a very short colloquy with the 
chairman of the Judiciary Committee.
  Mr. CONYERS. Absolutely.
  Ms. FOXX. I do thank you again for including my suggestions in the 
bill. As I said last week on the floor, and as I have indicated to you 
personally, I thank you very much. I wish we could have made the bill 
even better, but thank you.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. HASTINGS of Florida. I yield the gentleman an additional 30 
seconds.
  Mr. CONYERS. She is giving me further instructions, so I'll see what 
I can do between now and the time we introduce the manager's amendment.

                              {time}  1115

  Ms. FOXX. Mr. Speaker, I now yield 2 minutes to my colleague from 
California (Mr. Daniel E. Lungren).
  Mr. DANIEL E. LUNGREN of California. I thank the gentlewoman for 
yielding.
  Mr. Speaker, I come from the State of California, which has been hit 
about as badly as any State in the Union with the burst of the housing 
bubble, and particularly my part of the State of California. So I know, 
and I am earnestly hopeful that we will enact legislation that will be 
a benefit to that phenomena that has occurred throughout this country.
  However, I rise in opposition to this rule and rise in opposition to 
this bill precisely because of the inclusion of the bankruptcy cramdown 
provision. It is a classic example of the law of unintended 
consequences.
  The gentleman came to the floor, the gentleman from Texas, just a 
moment ago, and said, look, we should treat this the way we do with 
other homes and other investment properties. That is an inept analogy 
in that if you look at chapter 13 right now and you do have a cramdown 
on a vacation home, for instance, from $550,000 to $500,000, that plan 
would require the entire thing to be paid back within 3 to 5 years.
  That's not the proposal we have here on the floor with respect to the 
primary residence. This would be extended over 30 years. This would 
create an additional uncertainty in the marketplace so that the 
accessibility, the eligibility and the low rates that are now given in 
the arena of primary homes, as opposed to other homes or other 
investments, would be in jeopardy.
  That's the thing that we have to understand. We are treated 
precisely, differently in bankruptcy court because we want to promote 
homeownership, we want to promote eligibility. We want to promote 
accessibility, and we want to promote low rates.
  When you introduce an uncertainty like this, and we have in our 
minority report from the Judiciary Committee extensive reference to 
experts who say this is the case, when you introduce additional reduced 
risk, as you do here, you are going to jeopardize the accessibility and 
eligibility of these mortgages in the future to everybody, particularly 
those who are of the medium and low-income groups.
  So sometimes we have got to learn on this floor that best intentions 
don't conclude with the best results. What we are doing here is working 
against the interests of the very people we claim to be helping.
  Mr. HASTINGS of Florida. Mr. Speaker, I would inquire of the 
gentlelady from North Carolina if she has any remaining speakers?
  Ms. FOXX. Yes, Mr. Speaker, I have several remaining speakers.
  Mr. HASTINGS of Florida. Then I would reserve the balance of my time.
  Ms. FOXX. Mr. Speaker, I now would like to yield 2 minutes to my 
colleague from Florida (Ms. Ginny Brown-Waite).
  Ms. GINNY BROWN-WAITE of Florida. I thank the gentlelady from North 
Carolina.
  Mr. Speaker, when a bank forecloses in a neighborhood, it certainly 
affects the values of the surrounding homes. But when a bankruptcy 
judge arbitrarily breaks the mortgage contract, it will lower values on 
houses everywhere. I rise today in opposition to the rule and also to 
the well intended but tragically flawed bill.
  The Helping Families Save Their Homes Act of 2009 may live up to its 
name for a few people and for a very short time, but it does not stop 
home prices from falling. That, Mr. Speaker, is exactly what must 
happen for the economy to recover.
  Nobody here wants to see his or her constituents lose their homes to 
foreclosure, but it is our responsibility, as leaders, as Members of 
Congress, to make sure that the laws we passed don't have severe, 
unintended consequences. As most economists agree, two things are 
causing housing prices to fall, first home builders overbuilt and there 
was a glut on the market, and the demand did not keep up with the 
supply.
  Second, as long as perspective buyers expect prices to fall, they 
will continue to hold out buying. In doing so, there is a self-
fulfilling prophecy here.
  And like the two clauses of this crisis, this bill will have two 
consequences. Banks will most certainly require much higher down 
payments for future borrowers. Instead of 5 or 20 percent, borrowers 
will have to come up with, perhaps, 40 or 50 percent. Why, because of 
the uncertainty of is this amount of the mortgage going to hold?
  Second, banks will certainly charge a higher interest rate than they 
do today. Under normal circumstances, some might consider that a good 
thing. But if this bill becomes law, the House prices will fall 
further, faster, and the economy will certainly follow.
  As we have seen, many more people will lose their livelihoods and 
find themselves in a foreclosure. And, tragically, the families this 
legislation was supposed to help will find themselves underwater again. 
This is incredible danger here, and I urge my colleagues to vote 
against the rule.
  Mr. HASTINGS of Florida. I continue to reserve.
  Ms. FOXX. Mr. Speaker, I now yield 2 minutes to my colleague from 
Georgia (Mr. Broun).
  Mr. BROUN of Georgia. I thank the gentlelady for yielding.
  This rule and this bill are both blatantly unfair.
  They are unfair to the working poor. They are unfair to the middle 
class. They are unfair to the community banks that have no blame in 
this housing crisis, for the most part. What it's going to do is it's 
going to hurt the people who have been responsible, and it's going to 
help those who have been irresponsible.
  We have solutions. We, on our side, have offered many solutions that 
would stop this steamroll of socialism. This is another turn of the 
wheel of that steamroll of socialism that's being forced down the 
throats of the American people.
  We have got to stop this. We have got to stop messing in people's 
business and hurting the people that this bill is intended to help. 
It's going to reward those who have been irresponsible. It's going to 
reward those who have been involved in greed, and it's going to hurt 
those people who are trying their best to have a home, to have a good 
value in their home.
  We need to vote down this rule, we need to stop this bill. We need to 
stop this gross infringement on people's rights and privacy and lives 
that this Federal Government is doing.
  We have to stop this steamroll of socialism, and I call upon my 
colleagues to vote down this rule and to vote down this bill.
  Mr. HASTINGS of Florida. I continue to reserve, Mr. Speaker.
  Ms. FOXX. Mr. Speaker, I now yield 2 minutes to the distinguished 
gentleman from Indiana (Mr. Pence).

[[Page H2994]]

  (Mr. PENCE asked and was given permission to revise and extend his 
remarks.)
  Mr. PENCE. Mr. Speaker, I rise in opposition to the rule and to the 
Helping Families Save Their Homes Act.
  It's legislation that really will punish those who played by the 
rules, lived within their means, by forcing them to subsidize Americans 
who made irresponsible choices. This bill also throws good money after 
bad.
  If the HOPE for Homeowners Program was intended to help 400,000 
borrowers, the American people deserve to know that to date the program 
has assisted 43 borrowers, not 43,000, not 430, 43. The President said 
it was his goal to, quote, eliminate government programs that are not 
performing. We could start with the HOPE for Homeowners Program.
  More than anything else, Mr. Speaker, we are witnessing a disturbing 
pattern here in Washington, one that rewards bad decisions at the 
expense of people that have made right choices. We saw it in the 
bailout of Wall Street under a prior administration and continued under 
the new one.
  We saw this with the so-called stimulus bill that was designed to 
stem the rising tide in this economic crisis but was nothing more than 
a wish list of spending priorities put on the backs of our children and 
grandchildren. But today we should note more than 90 percent of 
Americans are paying their mortgages on time and meeting their 
financial obligations, even in these difficult days, let me say with 
authority as we consider this bill.
  People back in Indiana don't want a handout. They don't want to turn 
a blind eye to people who, through no fault of their own, found 
themselves in loans in which they should not have been engaged, but 
Hoosiers don't want to be put on the hook for a handout for people who 
knowingly made bad choices.
  These are tough times. We should all be willing to make the 
sacrifices necessary to weather this economic storm, but we to begin by 
reaffirming the principle of personal responsibility.
  The bill before us fails this essential standard. Rewarding bad 
behavior will not solve our problems, it will only worsen them. We 
should reject this bill. We should pursue the kinds of policies that 
put personal responsibility first and ultimately create the incentive 
for Americans who have invested in their homes and in their lives to 
continue to expand and prosper.
  Mr. HASTINGS of Florida. I continue to reserve.
  Ms. FOXX. Mr. Speaker, I want to thank all of my colleagues who have 
come today to speak on this rule. They have been extremely eloquent in 
explaining why we are opposed to this rule and the underlying bill.
  We are in a terrible situation in this country in terms of our 
economic situation. And what this bill is going to do is it's going to 
have the effect of making the current situation even worse, and let me 
explain a little bit why that is the case.
  This bill is going to require that banks have increased capital 
reserves, which is going to mean we are going to have decreased lending 
of all types. Every day I hear from people across the country, 
particularly developers, who say they cannot get loans, there is no 
capital out there, and it is hurting our economy. Some of us wonder if 
our colleagues understand this and understand that the effect of this 
bill is to make the economy worse and wonder if that is an intention 
for this bill.
  I think that we have to say that we had hoped that the bill that was 
pulled last week was going to come back as a better bill, and yet it 
has not. It's made this underlying bill either worse or it's simply 
window dressing.
  The new rule that has come in is basically not doing anything to help 
our situation and it's not helping the underlying bill. There was a 
promise that this was going to be better. We knew there were moderates 
on the other side who were having problems voting for this rule and 
voting for this bill. They have now, I think, been fooled into thinking 
that this is a better bill. It is not.
  As my colleagues have so eloquently said, there is a reward for 
irresponsibility and punishment for responsibility. We have heard the 
President say over and over and over, we need a new era of 
responsibility and accountability. This does just the opposite. This 
rule and this bill deserve the emperor's new clothes award because it 
doesn't do anything that they pretend it is going to do.
  I urge my colleagues to vote ``no'' on the rule and vote ``no'' on 
the bill when it comes up.
  I yield back the balance of my time.
  Mr. HASTINGS of Florida. Mr. Speaker, I yield myself the remainder of 
our time.
  This is a good rule, Mr. Speaker, that not only addresses our current 
housing crisis but it also more precisely targets relief to those who 
need it most.
  In January of this year alone, in St. Lucie County that I am 
privileged to serve, there was 1,372 home foreclosures, according to 
RealtyTrac. This was the second highest foreclosure rate in my State of 
Florida, up 44 percent from the previous year.
  This legislation is not a giveaway, it is not welfare, it is a 
collective bill that will help those who have played by the rules. We 
must lay the foundation in this country to help us get out of this 
crisis, and we must make every effort to rebuild this country. We can't 
turn a blind eye to the nearly 6 million households in America that are 
possibly facing foreclosure.
  Therefore, I urge my colleagues to support this rule that will put 
this great Nation back on track and will give millions of Americans the 
opportunity to continue living in their homes.
  I urge a ``yes'' vote on the previous question and on the rule.
  Mr. Speaker, I yield back the balance of my time, and I move the 
previous question on the resolution.
  The previous question was ordered.
  The SPEAKER pro tempore. The question is on the resolution.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Ms. FOXX. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, this 15-
minute vote on adoption of House Resolution 205 will be followed by 5-
minute votes on the motion to suspend the rules on House Resolution 
146, if ordered, and the motion to suspend the rules on House 
Concurrent Resolution 14, if ordered.
  The vote was taken by electronic device, and there were--yeas 239, 
nays 181, answered ``present'' 1, not voting 10, as follows:

                             [Roll No. 97]

                               YEAS--239

     Abercrombie
     Ackerman
     Adler (NJ)
     Altmire
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boccieri
     Boren
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Braley (IA)
     Bright
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardoza
     Carnahan
     Carney
     Carson (IN)
     Castor (FL)
     Chandler
     Clarke
     Clay
     Cleaver
     Clyburn
     Cohen
     Connolly (VA)
     Conyers
     Cooper
     Costa
     Costello
     Courtney
     Crowley
     Cuellar
     Cummings
     Dahlkemper
     Davis (AL)
     Davis (CA)
     Davis (TN)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Donnelly (IN)
     Doyle
     Driehaus
     Edwards (MD)
     Edwards (TX)
     Ellison
     Ellsworth
     Engel
     Eshoo
     Etheridge
     Farr
     Fattah
     Filner
     Foster
     Frank (MA)
     Fudge
     Giffords
     Gonzalez
     Gordon (TN)
     Grayson
     Green, Al
     Green, Gene
     Griffith
     Grijalva
     Gutierrez
     Hall (NY)
     Halvorson
     Hare
     Harman
     Hastings (FL)
     Heinrich
     Herseth Sandlin
     Higgins
     Himes
     Hinchey
     Hirono
     Hodes
     Holden
     Holt
     Honda
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Johnson (GA)
     Johnson, E. B.
     Kagen
     Kanjorski
     Kennedy
     Kildee
     Kilpatrick (MI)
     Kilroy
     Kind
     Kirkpatrick (AZ)
     Kissell
     Klein (FL)
     Kosmas
     Kratovil
     Langevin
     Larsen (WA)
     Larson (CT)
     Lee (CA)
     Levin
     Lewis (GA)
     Lipinski
     Loebsack
     Lofgren, Zoe
     Lowey
     Lujan
     Lynch
     Maffei
     Maloney
     Markey (CO)
     Markey (MA)
     Marshall
     Massa
     Matsui
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McMahon
     McNerney
     Meek (FL)
     Meeks (NY)
     Michaud
     Miller (NC)
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murphy (CT)
     Murphy, Patrick
     Murtha
     Nadler (NY)
     Napolitano
     Neal (MA)
     Nye
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor (AZ)
     Payne
     Perlmutter
     Peters
     Peterson
     Pingree (ME)
     Polis (CO)
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Richardson
     Rodriguez

[[Page H2995]]


     Ross
     Rothman (NJ)
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schauer
     Schiff
     Schrader
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shea-Porter
     Sherman
     Shuler
     Sires
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Space
     Spratt
     Stupak
     Sutton
     Tanner
     Tauscher
     Taylor
     Thompson (CA)
     Thompson (MS)
     Tierney
     Titus
     Tonko
     Towns
     Tsongas
     Van Hollen
     Velazquez
     Visclosky
     Walz
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch
     Wexler
     Wilson (OH)
     Woolsey
     Wu
     Yarmuth

                               NAYS--181

     Aderholt
     Akin
     Alexander
     Austria
     Bachmann
     Bachus
     Barrett (SC)
     Bartlett
     Barton (TX)
     Berry
     Biggert
     Bilbray
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehner
     Bonner
     Bono Mack
     Boozman
     Boustany
     Brady (TX)
     Broun (GA)
     Brown (SC)
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp
     Campbell
     Cantor
     Capito
     Carter
     Cassidy
     Castle
     Chaffetz
     Childers
     Coble
     Coffman (CO)
     Cole
     Conaway
     Crenshaw
     Culberson
     Davis (KY)
     Deal (GA)
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dreier
     Duncan
     Emerson
     Fallin
     Flake
     Fleming
     Forbes
     Fortenberry
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gingrey (GA)
     Gohmert
     Goodlatte
     Granger
     Graves
     Guthrie
     Hall (TX)
     Harper
     Hastings (WA)
     Heller
     Hensarling
     Herger
     Hill
     Hoekstra
     Hunter
     Inglis
     Issa
     Jenkins
     Johnson (IL)
     Johnson, Sam
     Jones
     Jordan (OH)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline (MN)
     Kucinich
     Lamborn
     Lance
     Latham
     LaTourette
     Latta
     Lee (NY)
     Lewis (CA)
     Linder
     LoBiondo
     Lucas
     Luetkemeyer
     Lummis
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     Matheson
     McCarthy (CA)
     McCaul
     McClintock
     McCotter
     McHenry
     McHugh
     McKeon
     McMorris Rodgers
     Mica
     Miller (FL)
     Miller (MI)
     Minnick
     Moran (KS)
     Murphy, Tim
     Myrick
     Neugebauer
     Nunes
     Olson
     Paul
     Paulsen
     Pence
     Petri
     Pitts
     Platts
     Poe (TX)
     Posey
     Price (GA)
     Putnam
     Radanovich
     Rehberg
     Reichert
     Roe (TN)
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Rooney
     Ros-Lehtinen
     Roskam
     Royce
     Ryan (WI)
     Scalise
     Schmidt
     Sensenbrenner
     Sessions
     Shadegg
     Shimkus
     Shuster
     Simpson
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Sullivan
     Teague
     Terry
     Thompson (PA)
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walden
     Wamp
     Westmoreland
     Whitfield
     Wilson (SC)
     Wittman
     Wolf
     Young (AK)
     Young (FL)

                        ANSWERED ``PRESENT''--1

       
     Kaptur
       

                             NOT VOTING--10

     Cao
     Davis (IL)
     Ehlers
     Hinojosa
     Melancon
     Miller, Gary
     Perriello
     Schock
     Speier
     Stark

                              {time}  1155

  Messrs. BOUSTANY and MILLER of Florida changed their vote from 
``yea'' to ``nay.''
  So the resolution was agreed to.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated against:
  Mr. SCHOCK. Mr. Speaker, on rollcall No. 97, Rule for H.R. 1106, had 
I been present, I would have voted ``nay.''

                          ____________________