[Congressional Record Volume 155, Number 45 (Monday, March 16, 2009)]
[House]
[Pages H3419-H3426]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       CONGRESSIONAL BLACK CAUCUS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2009, the gentlewoman from Ohio (Ms. Fudge) is recognized 
for 60 minutes as the designee of the majority leader.


                             General Leave

  Ms. FUDGE. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days in which to may revise and extend their remarks 
and insert extraneous materials on the topic of my Special Order.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from Ohio?
  There was no objection.
  Ms. FUDGE. The Congressional Black Caucus, the CBC, is proud to 
anchor this hour. Currently, the CBC is chaired by the Honorable 
Barbara Lee from the Ninth Congressional District of California. My 
name is Congresswoman Marcia Fudge, representing the 11th Congressional 
District of Ohio.
  CBC members are advocates for the human family, nationally and 
internationally, and have played a significant role as local and 
regional advocates. We continue to work diligently to be the conscience 
of the Congress. But understand that all politics are local. Therefore, 
we provide dedicated and focused service to the citizens and 
congressional districts we serve.
  The vision of the founding members of the Congressional Black Caucus 
to promote the public welfare through legislation designed to meet the 
needs of millions of neglected citizens continues to be the focal point 
for our legislative work in political activity.
  Mr. Speaker, I would now like to yield to our chairperson, the 
gentlewoman from California (Ms. Lee).
  Ms. LEE of California. Thank you very much. First, let me, Mr. 
Speaker, thank Representative Fudge and her staff for working with the 
staff of the Congressional Black Caucus to organize the CBC Special 
Order every Monday that Congress is in session. This takes quite a bit 
of time and commitment, but Congresswoman Fudge, I just want you to 
know, you continue to play such an important role by ensuring that our 
voices are heard, that the country hears with regard to the positions 
of the Congressional Black Caucus, and our work, and I want to thank 
you and your staff for your steady and consistent work on this.
  Tonight, of course, as Congresswoman Fudge indicated, we're talking 
about the foreclosure crisis. As we all know, the roots of this current 
economic crisis are grounded in the housing market, the explosion of 
the subprime markets, and the unregulated and uncontrolled growth of 
the derivatives market that drove some of our largest financial 
services companies into bankruptcy.
  We have to be truthful about this. The economic and fiscal policies 
of the Bush administration have left our country in a mess. They 
created this mess.
  Many of us--and I remember this very vividly--we warned about this 
impending housing crisis years ago. As a member of the Financial 
Services Committee for 8 years, I remember expressing my concern about 
the housing bubble and the subprime loans that were fueling the housing 
crisis and also the consequences to our economy if the bubble ever 
popped. But our warnings fell on deaf ears.
  I consistently questioned former Fed Chairman Alan Greenspan about 
the housing bubble. Coming from California, we saw this each and every 
day--the increasing rates of foreclosure and the rapid growth of 
subprime and other exotic home mortgages. But, as this crisis was 
brewing, the Bush administration, the Federal Reserve, and HUD turned a 
dead ear.
  Now, equity in one's home is really the primary path in our country 
for accumulating wealth, to send one's children to college, to start a 
small business, and to really enhance the quality of life. Now, this 
American Dream of homeownership has turned into a nightmare for 
millions.
  The impact of foreclosure also extends far beyond the personal 
tragedy of the family that loses their home. The foreclosure crisis now 
has reduced property values throughout the neighborhood. It reduces the 
revenues for local and State governments. It causes increased prices in 
the rental markets. The abandoned homes often become the blight of our 
communities.
  We took a bus tour in my own community and saw neighborhoods just 
totally in shambles as a result of homes that had been foreclosed on.
  Unfortunately, predatory lending targeted vulnerable populations. 
Predatory lenders went after communities of color, went after 
individuals they knew were vulnerable, and were targets. To me, that 
should be looked at very seriously, and hopefully one of these days 
some will be prosecuted for that.
  When we tried to encourage the banks to participate in voluntary 
foreclosure prevention programs to help families in distress, they 
balked and made every excuse to avoid participating.
  Now, millions more families are threatened with bankruptcy and 
foreclosure. AIG--this is unbelievable--AIG can provide what, $165 
million in bonuses, taxpayer dollars? This is criminal. It's wrong. 
It's immoral.
  For much of the time that I sat on the Financial Services Committee 
and its subcommittee on Housing and Community Opportunity, I can tell 
you that much of the work was focused on affordable housing. In fact, I 
can remember sitting in a subcommittee hearing talking to then-
Congressman now-Senator Bernie Sanders from Vermont, sketching out the 
outlines of legislation creating the Federal Affordable Housing Trust 
Fund. Although I'm glad we were finally able to get this through the 
Congress, we are all acutely of aware of the funding problems we are 
seeing now as a result of the foreclosure and economic crisis that we 
are facing today.
  So there is much, much work to be done. That is why many of us are 
pushing for a moratorium. And I think we need a moratorium on 
foreclosures. We have been pushing for this from the start of the 
crisis. That's why we worked to push at every point to include 
significant and meaningful foreclosure relief and to keep people in 
their homes, including bankruptcy reform.
  But it hasn't been easy, especially given the Bush administration's 
disastrous economic policies that I mentioned earlier. But these 
policies range from deregulating the financial industry, to the war in 
Iraq. Yes, this war in Iraq. $10 billion a month has been part of this 
huge problem. These tax cuts to the rich, which created this financial 
mess.
  I mean, this is really an unbelievable moment that this 
administration has stepped up to the plate on to move forward to help 
turn this economy around.
  Despite the resistant Bush administration, at least we were able to 
include important Neighborhood Stabilization Funding--over $8.25 
million for my own city last year--in the Housing and Economic Recovery 
Act. Again, thanks to the consistent and effective work of 
Congresswoman Maxine Waters.
  Today, finally a new day has dawned and we have hope because the 
majority in Congress and President Obama understand that we can and we 
must use every available tool to address this crisis head on.
  The Congressional Black Caucus fought hard, fought hard, led by 
Congresswoman Maxine Waters, to ensure that an additional $2 billion in 
Neighborhood Stabilization Funding in the American Recovery and 
Reinvestment Act was included. Not enough, but it's a start.
  I'm pleased that Secretary Geithner and the President have announced 
a $75 billion plan to keep families in their homes and to keep home 
ownership affordable.

[[Page H3420]]

  Even with all of our efforts, we all know the enormity and the 
gravity of this situation, and this requires much more. We have the 
obligation of making the dream of home ownership accessible to all 
Americans and to help them achieve those dreams by limiting these 
unscrupulous lenders--and I mean they are unscrupulous; these 
unscrupulous brokers--and they are unscrupulous; and these real estate 
agents, who really seek to profit at the expense of the people that 
they purport to serve.
  We are not casting a net on all of these individuals and 
institutions, but I think the data shows us that there's been a lot of 
bad faith, there's been a lot of activity in the financial services and 
in the real estate industry that really caused us to question a lot of 
the practices of some of these individuals. I think that there must be 
more accountability and more oversight and some need to be called on 
the carpet as a result.
  Finally, let me just say that I have to congratulate our Speaker for 
helping to take strong steps. Chairman Frank, Congresswoman Maxine 
Waters. These individuals work day and night to help us figure out ways 
to help families in distress, and our bills to improve FHA to create 
grants to provide home buyers with the incentives to strengthen the 
oversight of this mortgage industry, which has gone wild, if you ask 
me.
  This movement and some of these initiatives I think will help begin 
to mitigate some of the damage of this housing crisis. But without the 
safety net of the courts, the average homeowner will still too often be 
left to the rise and fall of the markets and the whims of the mortgage 
marketers. So bankruptcy reform must be enacted.
  So, thank you, again, Congresswoman Fudge, for organizing this 
Special Order. Thank you for allowing us to raise the alarm once again 
and to sound the alarm so that the country understands that we are on 
the case day and night, and this is quite a moment and it's quite a 
mess that we are faced with as a result of the last 8 years. But I am 
confident that with President Obama, Speaker Pelosi and our leadership, 
that we are going to dig ourselves out of this hole.
  Thank you, and I yield back.
  Ms. FUDGE. Thank you. Mr. Speaker, I would like to thank our Chair, 
the gentlewoman from California (Ms. Lee), for her leadership, for her 
ability to keep the issues that are really pertinent and pressing on 
the CBC agenda. Madam Chair, I thank you.
  I would now like to yield to the gentlewoman from New York, Ms. 
Yvette Clarke.
  Ms. CLARKE. Mr. Speaker, I first want to thank the gentlewoman from 
Ohio for her leadership in organizing this Congressional Black Caucus 
Special Order this evening. I'd also like to thank Representative Fudge 
for yielding so that I may discuss how foreclosures are adversely 
affecting so many African American communities--communities in my 
district and throughout the country. I also want to commend her for her 
leadership role in organizing us around the issues that have been of 
such concern and are so critical to the strength and the underpinning 
of the communities that the members of the Congressional Black Caucus 
represent.
  Let me start by joining my chairwoman, Congresswoman Barbara Lee of 
California, in calling for the moratorium on mortgage foreclosures. 
Tonight, I rise as a member of the 11th Congressional District to state 
how foreclosures have devastated the lives of two individuals that I 
represent.
  First, there's Mr. Simeon Ferguson. Mr. Ferguson is an 86-year-old 
retiree from Crown Heights, Brooklyn. He worked for more than 20 years 
as a chef at the Long Island College Hospital.
  In 1975, he bought a three-story brownstone in my district. This 
benevolent man would grow tomatoes and callaloo leaves--those of you 
from the Caribbean know what callaloo is--it's sort of a spinach--in 
his garden and, according to his daughter, would love to give the 
excess to his neighbors and friends at no cost, as he would cook the 
rest of it.
  But around 3 years ago, a mortgage broker sold Mr. Ferguson, at the 
age of 83, a new $450,000 option adjustable rate mortgage that would 
almost certainly put his home into foreclosure.

                              {time}  2000

  Mr. Ferguson had no attorney present at the time during the closing 
and believed he had made a good deal.
  To make matters worse, Mr. Ferguson had dementia, a condition he was 
diagnosed with in 2005, and had only his Social Security and a pension 
as sources of income. So this gentleman of Jamaican descent could 
easily forget to make a mortgage payment that could balloon to such a 
frightening amount that it would be insurmountable to pay back. Mr. 
Ferguson is a victim of predatory lending, and now he may lose his 
home.
  Low income, elderly people are experiencing widespread theft of their 
equity. Elderly people are simply more susceptible to abusive predatory 
lending practices. Home equity scams are appealing to financial 
predators because the money is substantially easy to find, and the 
elderly can be induced into losing the equity in their homes and, even 
worse, becoming homeless through predatory lending, foreclosure rescue 
scams, and estate planning. The mortgage foreclosure crisis has had a 
profoundly injurious impact on our seniors.
  Now, as this is the month of March and it is Women's History Month, I 
thought it would be good to share some of the impact of this crisis on 
the women of our Nation.
  By 2010, women will head almost 28 percent of all households in this 
Nation. Of families living in poverty in 2001, 50.9 percent were women-
headed households with no spouse present. But, in fact, the tremendous 
growth in the number of women filing for bankruptcy shows that economic 
instability for women reaches also into the middle class. Unmarried 
women accounted for 30 percent of the growth in homeowners from 1994 to 
2002. Women account for a larger share of the subprime loans than of 
prime loans. Women are particularly vulnerable to predatory lenders. 
Women are particularly vulnerable to financial hardship. Older women 
are at greatest risk. Older women may be open to promises of ready cash 
if they live on modest fixed incomes that do not cover property tax 
increases, necessary home repairs, and unanticipated medical expenses. 
Women are especially susceptible to financial hardship.
  I want to share with you now one of the stories of another one of my 
constituents. Her name is Ms. Waver Brickhouse. At age 69, Ms. 
Brickhouse is a gray-haired, soft-spoken woman from the Brownsville 
section of my district. She is a victim of mortgage fraud, and now may 
have her home put into foreclosure, too. She turned to what she 
believed to be a home rescue firm, who then secretly sold her home and 
added at least $150,000 of fraudulent mortgage debt. This retired City 
Parks Department worker said in a recent New York Times article, and I 
quote, ``I am going to drown in debt. I feel like it is just a matter 
of time until I am out on the street with my children.''
  However, these stories are not irregular in my district. African 
American seniors in New York and all across this Nation are at risk of 
losing homes they worked so hard for decades to some day acquire full 
equity of their property, but at this moment some are facing 
homelessness.
  Mr. Speaker, just listen to the alarming numbers. According to the 
Federal Reserve Bank of New York, by the fall of 2007, one in four 
homeowners with subprime mortgages lived in neighborhoods in my 
district such as Crown Heights and Bedford-Stuyvesant, and these 
mortgages were in foreclosure. In 2008, Federal data reported that 
there are 5,861 foreclosures in Brooklyn alone. And the Center for 
Responsible Lending projected that, in 2009, there will be 435 
foreclosures in my district, and within the next 4 years that number 
will rise to 1,448.
  Communities such as the one I just mentioned as well as others 
throughout the Nation collectively lost as much as $92 billion in 
wealth over the last 8 years resulting from predatory lending practices 
within the subprime mortgage crisis.
  For these reasons, Mr. Speaker, I intend to introduce legislation. My 
bill is entitled the Foreclosure Prevention Act of 2009. This bill will 
provide funding to the National NeighborWorks Association for mortgage 
foreclosure

[[Page H3421]]

mitigation activities. NeighborWorks has been instrumental in 
partnering with the State of New York Mortgage Agency to not only 
promote home ownership in underserved communities such as Bedford-
Stuyvesant, Brownsville, and Flatbush, but they also provide 
foreclosure counseling that could some day help predatory victims like 
Mr. Ferguson and Ms. Brickhouse.
  In addition, I recently voted for H.R. 1106, Helping Families Save 
Their Homes Act of 2009, which allows for mortgage modifications 
through the bankruptcy court, and I also support applying the FDIC 
model. The Federal Deposit Income Insurance Corporation has pioneered a 
promising approach that, even with some limitations, would strengthen 
incentives to prevent foreclosures and greatly boost the number of 
successful loan modifications.
  I commend President Obama and his administration for their ongoing 
efforts to mitigate the damage and assist our families in staying in 
their homes. But we must also look at ways to advocate for legal reform 
that would ultimately prevent the elderly from losing their homes. So I 
urge my colleagues tonight to work together with the CBC to take the 
lead in addressing the foreclosure crisis and, more important, mitigate 
the racial disparities of predatory lending and its impact on African 
American seniors. I want to thank you again, my colleague and the 
leader of this special order, Congresswoman Fudge from the 11th 
Congressional District of Ohio, for being a beacon of light this 
evening to those in our communities who are really struggling to keep 
their heads above water and, most important, their dignity.
  Ms. FUDGE. Mr. Speaker, I would certainly like to thank my friend and 
the outspoken representative from the 11th District of New York. She 
stands for her people, and I am so appreciative of her participation 
this evening.
  Mr. Speaker, I would now like to yield to one who has been so helpful 
during the CBC hour, who has provided me guidance and support, and I 
call my co-anchor. And that would be the gentlewoman from the Virgin 
Islands (Mrs. Christensen).

  Mrs. CHRISTENSEN. Thank you, Congresswoman Fudge, for organizing yet 
another time for us to speak to our colleagues and to the American 
people on an issue of great importance to them and to all of us. And I 
want to also thank Chairwoman Lee for her leadership, and our 
colleagues for joining us this evening, and for their leadership for 
introducing measures like the Foreclosure Prevention Act of 2009, to be 
introduced by Congresswoman Clarke who just spoke.
  Mr. Speaker, members of the Congressional Black Caucus are pleased 
that we are finally beginning to see what may be a glimmer of hope that 
we will be able to help our country and those most affected climb out 
of the worst fiscal crisis since the Great Depression, a crisis caused 
by greed, and where the most vulnerable people are the ones suffering 
the consequences as we have heard this evening.
  If one wants to truly fix a problem, one must fix it at its root 
causes, and the root cause of this current crisis is the housing bubble 
and the subprime mortgages and the way those were pooled together and 
then securitized. The initial remedies shored up the government-
sponsored enterprises like Freddie Mac and Fannie Mae and the banks, 
but the homeowners were for far too long left holding the bag, an empty 
bag at that, and, unfortunately, misplaced blame.
  At the heart of the American Dream has always been the dream of 
owning one's home. Unfortunately, too many Americans have seen this 
dream seriously distorted and deferred by the unhealthy antiregulation 
environment that gave lenders free rein to push products to 
unsuspecting customers who simply wanted a chance at that dream. There 
were 2.3 million foreclosure filings last year.
  While some have blamed homeowners for biting off more than they could 
chew, the truth is that average Americans approach their bankers like 
they do their doctors, in an atmosphere of trust and vulnerability, and 
most never imagined that they would be approved if their lender didn't 
think they could keep up with their payments. But this is not the time 
for blame, it is the time for action. And I also rise to applaud 
President Obama, the Democratic-led Congress, Chairman Barney Frank, 
Congresswoman Maxine Waters, and others, who have come together to 
formulate an aggressive campaign to turn around this crisis which has 
threatened homeowners across this country.
  President Barack Obama's comprehensive Homeowner Affordability and 
Stability plan will help stem foreclosures, keep families in their 
homes, and stop the plunge in home values for all homeowners. The 
President and this Congress have moved aggressively to help those in 
bankruptcy get a loan modification agreement, to help those who are 
underwater and in need of refinancing get a chance at a new start, and 
those who are in danger of foreclosure to avoid it altogether by being 
able to work it out with their banks and lending institutions.
  By passing the Helping Families Save Their Home Act, the House has 
moved towards bringing fairness to families by giving them the same 
rights to keep their home as someone who owns two or three homes. 
Without spending one Federal dollar, it gives bankruptcy judges the 
chance to modify existing mortgages for families who file Chapter 13 so 
that they can make payments and stay in their homes. It also gives 
lenders more confidence to modify loans by protecting them from some 
lawsuits, and strengthens the FHA's Hope for Homeowners program by 
reducing fees and offering incentives for lenders.
  Earlier, the Obama administration revealed the details of other parts 
of their recovery plan for homeowners aimed at helping those with 
existing Fannie Mae or Freddie Mac mortgages to refinance, and those 
who are not yet in foreclosure but are struggling to stay away from it 
to get a modification from their lending institution.
  While the Obama administration has made it clear that not everyone 
will qualify for help, it is still true that millions can keep their 
homes under this initiative, saving families, neighborhoods, 
communities, and, indeed, our economy, from further decline.
  There are many people in organizations in addition to the leaders I 
named earlier who played a role in getting us to this point, and I 
would be remiss if I did not mention the NAACP's efforts to demonstrate 
that minority communities were being unfairly targeted with these toxic 
mortgages. Many have been devastated. The NAACP has filed suit against 
at least one bank for targeting communities of color for subprime 
mortgages, and we congratulate them and stand with them on this effort. 
The Congressional Black Caucus and the Progressive Caucus also played 
important roles in ensuring that the focus was expanded to include the 
homeowner, not just the financial institutions, and that meaningful 
remedies were put in place for them.
  These are all meaningful steps to address the mortgage mess that has 
been the catalyst to a severe domestic economic downturn that has 
resonated globally. Our President's plan and the laws that we have 
passed will not only help everyone who is in or threatened with 
foreclosure, but we hope that many millions of homeowners who are in 
trouble will be able to keep their homes.
  We are concerned, though, that some of the financial institutions 
have been turning down Federal help, ostensibly because they don't like 
the strings that are attached, the oversight, and the requirement for 
transparency. Accountability and transparency is exactly what would 
have kept us out of this mess and what is needed going forward, whether 
they take the money or not.
  The White House, HUD, Treasury, and Congress must use any authority 
that we have to ensure that the financial institutions who themselves 
have been the recipients of bailouts by the billions, and even those 
who are refusing, to ensure that they will fully participate in the 
homeowner rescue initiatives and extend the lifeline that many 
homeowners need and are praying for.
  Fixing the root cause of the problem and making American homeowners 
whole again, restoring the American Dream, is what will begin to 
restore confidence in our government's ability to put us on a stable 
economic course, and what will finally begin to put our country on the 
road to financial recovery.
  I thank you again for hosting this special hour. It has been my 
pleasure

[[Page H3422]]

to work with you on this, and I look forward to doing some more of this 
in the future.
  Ms. FUDGE. Thank you so very much. I would very much like to thank my 
colleague for all of her help and support during the CBC hour, and look 
forward to working with her as well.
  Mr. Speaker, at this time I would like to yield to the gentlewoman 
from the State of Texas, Ms. Sheila Jackson Lee, who has been a strong 
voice in our Congress for years for the people who are most in need.

                              {time}  2015

  Ms. JACKSON-LEE of Texas. Allow me to thank the gentlelady from Ohio 
for really taking up the very important mantle of leadership in 
communicating to our colleagues why we really need to be in a team 
effort. I was with Senator Rodney Ellis, a State senator in my State, 
just yesterday. We have to use time when we can, and that was Sunday. 
We were standing up, along with certainly many members of the State 
legislature and many Members here in the House, on the great need for 
receiving stimulus dollars and unemployment dollars in the State of 
Texas. $555 million is presently being rejected by this Governor of our 
State.
  And the quote that comes to mind from that State senator was that 
when people are hurting or unemployed or in foreclosure, they don't see 
Democrats or Republicans. They just see pain. And that is why I think 
it is important that we convey to our colleagues that their 
constituents don't see a Democratic or Republican Congressperson. They 
just see a major dilemma from which they are wondering how they can get 
out.
  So this evening, I would like to emphasize something that seems to 
have been lost, and that is that this ongoing foreclosure crisis was 
percolating way before the inauguration of our present President. And 
in fact, I'm reading from a document that was dated 2006, and it says 
``foreclosures up 72 percent from last year.'' That would have been 
2005. That was the last administration. The previous administration was 
a Republican administration. But I imagine that this number, 72 
percent, was not coded according to Democrat or Republican homeowners. 
But it did say that it was up 72 percent. And it goes on to say that 
``national foreclosure filings continued to climb in the first 3 months 
of 2006, evidence that more U.S. homeowners are struggling to stay 
current on their monthly mortgage payments.''
  Why, then, wasn't it addressed by the administration during that 
time? That is 2006, ``a total of 323,102 properties nationwide entered 
some stage of foreclosure in the first quarter of 2006.'' Again, it 
mentions ``a 72 percent year-over-year increase from the first quarter 
of 2005 and a 38 percent increase from the previous quarter.'' It 
specifically talks about the fact that Texas, Florida and California 
report the most foreclosures. Now we are a prosperous State, or at 
least we are defined as such. It must be because we have government 
officials suggesting that we don't need unemployment dollars. Texas 
reported the most first-quarter foreclosures of any State with 40,236, 
and Florida reported the second most with 29,636, and California was a 
close third with 29,537 properties entering some stage of foreclosure 
in the first quarter, again, this is 2006. And let me just say I do 
know this is 2009.
  I think it is important to note that we did not create this crisis. 
The election of 2008 didn't all of a sudden make it where people are 
foreclosing. This has been happening. And what we are trying to do is 
to emphasize that we have to act now. That is why the President is so 
interested, the administration is so interested in making sure that 
there is a moratorium, that there is $75 billion that is being set 
aside, something that we debated when we were working with the previous 
administration that you can't give then-Secretary of the Treasury a 
carte blanche utilization of then the $350 billion. So many of us 
argued vehemently about that.
  Let me say to my good friend from Ohio that these numbers are not 
ignoring the fact of how difficult it has been in the Midwest and in 
Ohio in particular. Again, this was emphasizing the high numbers of big 
States. But certainly it has Ohio. And it mentions, of course, that 
you, too, were in the midst of huge foreclosures. In 2006 it looks like 
you were in the 8,000, 9,000. You kept going up. In February you had 
9,000. So you were going up, and the other States were going up as 
well, which means that this is not an issue for small States, big 
States, or middle States.
  So I come to the floor really to suggest that we are in a crisis that 
has to be acted upon. That is why so many of us rallied around the 
Helping Homes legislation that is not a giveaway. It is not a refuge 
for deadbeats and people who can't handle their finances. It is really, 
as I indicate on the floor of the House, the bankruptcy provision is 
the little guy's helping hand, because we bailed out every large entity 
that we could possibly bail out. Just give the roll call of the big 
banks, the big investment houses, the big AIGs. We have bailed them 
out.
  When I got on the floor to debate this bankruptcy provision, which we 
have been trying for a number of years, it would have been helpful if 
the previous administration had allowed this to go forward in 2006 with 
these high numbers. And then we could have had individual, responsible 
families who simply wanted to get time, that is what the bankruptcy 
does. Nobody goes to the bankruptcy court and says ``take my house.'' 
We are trying to keep them from going through that humiliating 
experience of seeing your house auctioned off. And all of us have seen 
the video on television where we see families sit there with tears in 
their eyes. Yes, some people benefit by maybe being able to buy a 
house. But mostly the people with tears in their eyes, some hoping they 
could buy it back, others watching their house peter away in an auction 
process. The Helping Homes that I know my colleague voted on and 
understood how important it was as a lawyer and former mayor and 
understands about the tax base that just deteriorates when we lose our 
home, this just allows the homeowner to go into the courthouse with a 
trained bankruptcy judge who is not prone to go lightly on people who 
are frivolously coming in masquerading themselves, never paid a bill in 
their life, but it allows them, just like you've allowed the big 
corporations that have gone into bankruptcy to be able to reorder.
  And so, it is truly important to ensure, to help the little person, 
that this bankruptcy bill that has been passed by the House and the 
Senate, as I understand it, it may be that we move this bill along that 
will allow the cramdown that everybody talked about, you're going to 
disadvantage the lender. No, you're not. Because there are now 
different provisions that puts in that any value that comes through the 
sale of that house goes back to the lender, there are protections about 
the cramdown, there are notices that have to be given so that maybe you 
can modify the loan without going into bankruptcy. And if any lender is 
smart, they will do that. But at the bottom line, this bankruptcy 
provision helps hardworking Americans wherever they live to save their 
house with dignity. Mr. and Mrs. Jackson-Lee, Mr. and Mrs. Lee, Mr. and 
Mrs. Fudge, Mr. and Mrs. Jones, Mr. and Mrs. Smith, Mr. and Mrs. 
Gonzalez can go in and fix that problem through the courts and save the 
house for them and their four children or two children. In USA Today, 
there was an article that you, as a former mayor, would understand, the 
dumbing down of the amount of money that is going to school districts 
because we were reaching a crisis of how many homes were being 
foreclosed and seeing the tax base just dwindle away, in fact, I would 
say, go rapidly down a fast moving tube.
  So it is a ripple effect of not only destroying neighborhoods, which 
is why these neighborhood stabilization moneys in the stimulus package 
are crucial, but also destroying obviously paramount families, 
lives, and then the ability to pay for the education of your children, 
and then, of course, the ultimate dump of a whole town, whole city, a 
whole hamlet, village, being just blocks and blocks of foreclosed 
homes.

  So I think it is important that we begin to stand on the floor of the 
House to support America's families. And I can't help but as I speak 
with you this evening and to my colleagues, I just

[[Page H3423]]

have to hold this up because it certainly shows the strength of our 
President, it says, this is a headline, Obama berates AIG and vows to 
try and block bonuses. Well, we know there are some legal issues that 
have been represented to us that provides a problem, but I will just 
simply say that having practiced in the courts, it is a shame that we 
couldn't just say, ``sue me,'' which would have just had those 
individuals who thought that they were owed the bonus to be able to go 
into the courthouse and try to get the money.
  I think I would like to commend our Speaker who has indicated that 
these moneys should then be paid back now by AIG. If you figured that 
you couldn't have any other out, you couldn't stand the impact of a 
lawsuit for people who were getting these huge bonuses, $160 billion 
plus, then why don't you go ahead and put on the requirement that they 
should pay the taxpayers back. But I use this as an example that we 
have to be able to help these hardworking taxpayers who themselves have 
suffered because we have not been able to provide the relief.
  I just want to add that new home sales have fallen by about 50 
percent. One in six homeowners owes more on a mortgage than the home is 
worth which raises the possibility of default. Home values have fallen 
nationwide from an average of 19 percent from their peak in 2006, and 
this price plunge has wiped out trillions of dollars in home equity. 
That is the sadness of it. Many people were going to use this for 
retirement, had the ability to pass on a debt-free house to their 
children. This was the bottom line or the first line of wealth for many 
Americans. We were told to buy that wonderful nest egg, buy that home 
that will be a nest egg. The tide of foreclosure might become self-
perpetuating. The Nation could be facing a housing depression something 
worse than the recession.
  Of course, we know about the TARP bill that has helped us to move 
forward. But then again, we realize that there have been, certainly in 
the first issuance of the dollars, these major problems. And so that is 
why we have turned our attention, and I want to congratulate Chairman 
Conyers, who had been on this issue, in the previous administration we 
had attempted to get the language put in the TARP.
  And many times, Congresswoman Fudge, the Congress doesn't get the 
recognition. And certainly none of us are saying me, me, me or I, I, I. 
And we also know that we are in a business that we are responsible 
enough to take criticism. But they need to know that we were fighting 
the Judiciary Committee to get the bankruptcy language into the TARP 
legislation a way long time ago, recognizing the importance. But it 
would not, could not be moved forward because of opposition from the 
then-White House.
  And so it is important to note tonight that I am very glad that you 
had this particular Special Order so that we could provide the basis of 
the work that we have done and also ask our colleagues to encourage all 
of their constituents to seek foreclosure modification in their loan, 
to not sit by silently, that the banks are now under a burden to not 
foreclose but to be able to talk to you about loan modification. 
Everyone should seek loan modification now. Do not suffer in silence, 
because we realize that it is not only a predatory lending issue which 
has occurred, but there are people who have regular loans that may be 
finding themselves in difficulty and have the right for loan 
modification.
  We do want to say that we want to get out of this issue that whenever 
we see certain economic or certain neighborhoods that that particular 
lendee is a prime target for subprime mortgages. Now some people have 
indicated to me that subprime mortgages have been used sometimes 
favorably to allow someone with some challenges. But certainly subprime 
should not equate to predatory. And there has been predatory lending 
going on. And so these subprimes have equated to that. And I want the 
bankers to be able to be more creative than to see certain 
neighborhoods, certain, if you will, ethnicities or racial groups, and 
the only thing you can give them is a subprime when their particular 
portfolio suggests that they are equal or able to take on any regular 
loan. And what happened is they put more people in subprime based on 
ethnicity and race.

                              {time}  2030

  So I wanted to add as I draw to a close, and I welcome your 
participating in this legislation that I intend to drop, and that is to 
ensure that individuals who are in mortgage foreclosure because of 
subprime and predatory lending will not have that foreclosure on their 
credit score. You know what happens with credit scoring. When you go 
into a bank and they pull that score up, hardworking families suffer 
because of the credit score. Probably they were thrown into the 
subprime and predatory markets because of that.
  So the language says in particular that 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.
  Subprime defined. The term ``subprime mortgage'' means any consumer 
credit transaction secured by the principal dwelling of this consumer 
that bears or otherwise meets the terms and characteristics of such a 
transaction that the board has defined as subprime mortgage.
  So if you have been a victim of predatory lending, we will add that. 
And you have made every effort through loan modification or you have 
been caught up in this whirl of confusion, then we don't want to impact 
your credit score even more, make it worse, if you will, by adding this 
foreclosure to you; and, therefore, making it even more impossible for 
you to then move into a home or buy another home or to transition to 
get your life in order.
  I want our colleagues to realize that this is going to be an ongoing 
concern. And the fact that it is an ongoing concern means we have to 
work with our local communities. That is why I have supported the TARP 
funding to be as responsive to community, regional and private banks as 
they are to the big banks. I think it is important that we invest in 
the smaller banks by making sure that they get TARP funds. And I think 
it is enormously important for the President's mission that says that 
we should in fact for every dollar lent to these banks, they must lend 
it out, and we must lend it not only to those who are attempting to 
modify their loans, but to the new generation of homeowners. Let us not 
kill off the incentive for others to buy homes, co-ops, condominiums, 
brownstones, the two stories, the split levels, if you will, two 
families in one home scenario, we should not take away the American 
dream of a house.
  I believe that if we can watch AIG with some sort of cavalier 
attitude, giving $160 million in bonuses and not wanting to issue a 
report on where the moneys went, we can certainly be helpful to those 
who are struggling.
  I would like to engage the gentlelady in a conversation, particularly 
as she comes from Ohio, and just get a sense of the impact that comes 
about when homes are foreclosed. With your experience as a former mayor 
and how important those local resources are, what happens to a 
community when there are massive foreclosures and that income doesn't 
come in any more?
  Ms. FUDGE. There are a couple of things that I would like to address. 
Many people know that Cleveland, which is a major part of my district, 
has been one of the poorer cities in America for the last 3 years. So 
when we are talking about more than 10,000 vacancies in a city, which 
is the case in the city of Cleveland, not only does it destroy 
neighborhoods, but there are less resources to go to the school or to 
go to the city for city services, and all of the things that go along 
with tax dollars. As well, it deflates and devalues all of the property 
around it.
  And it clogs the courts. The foreclosure process is a timing issue 
because of all the notice requirements. It is a domino effect. It hurts 
everything that you can think of that has to do with housing. But most 
importantly, it puts people on the street. We have thousands and 
thousands of people waiting to get into public housing. We have people 
who have moved in with other family members. Where do these people go? 
No one addresses the issue where do these people go. Everyone doesn't 
have a family that they can move in with. Everyone cannot get a voucher 
or stay with a friend. Where do these people go?

[[Page H3424]]

  And then what is compounding the problem is we are now having 
landlords who have renters in their homes, and haven't told the renters 
they are in foreclosure. One day the renters wake up and they have a 
notice on their door saying that they have to move in three days. Or 
the sheriff saying you must move from these premises. So it becomes a 
very difficult experience to watch someone lose their home.
  I am hopeful that some of the things that we have done in this 
Congress will stop the bleeding. We may not cure the problem over the 
short run, but I am very confident that we will over the long run. I 
certainly hope that some of these things are given a chance. We have 
given 8 years of opportunity to make things work and they haven't. Give 
us the same opportunity. I do believe our President is doing the right 
thing. It is just going to take some time.
  Ms. JACKSON-LEE of Texas. I think it is important for people to hear 
stories from all over the country. I think one of the salient points 
that you have made is how it puts people on the street and how it clogs 
the courts. Different from the bankruptcy proceedings which allows 
people to stay in their homes, the foreclosure proceeding is so long 
and protracted, most people will be abandoning doing their home before 
it concludes.
  I thank the gentlelady from Ohio for being able to both express some 
of the outrage and pain. And this was not created under this 
administration. We are trying to be the problem solvers, and it would 
have just been great if we had looked at this issue from the 
administration's perspective in 2006 and before. We might then have 
been able to put our finger in the dike and help those who were on the 
verge of going over the cliff.
  But now we are holding an enormous burden, and I guess the parting 
words are let's look at the people who are rolling up their sleeves. 
The media pundits who can criticize rain, if you will. If it is 
raining, they can criticize that. But people who are trying to build 
banks backs and make them responsive to our neighborhoods and school 
districts, let's look at the Federal legislation trying to help people 
modify their loans and keep them off the streets and save families and 
school districts. Why don't we listen to that explanation, which I am 
sure will give us a better understanding than national pundits who make 
their money off of worrying about whether it is raining and therefore 
if it is, that gives them a mouthful to criticize. I would rather stand 
with those who are trying to stand with the American people, and I 
believe that is what your Special Order has been about tonight. I thank 
you for giving me this opportunity.
  Mr. Speaker, home foreclosures are at an all-time high and they will 
increase as the recession continues. 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. This means that one per 62 American households is currently 
approaching levels not seen since the Depression.
  The current economic crisis and the foreclosure blight has affected 
new home sales and depressed home value generally.
  New home sales have fallen by about 50 percent. One in six homeowners 
owes more on a mortgage than the home is worth which raises the 
possibility of default. Home values have fallen nationwide from an 
average of 19 percent from their peak in 2006, and this price plunge 
has wiped out trillions of dollars in home equity. The tide of 
foreclosure might become self-perpetuating. The nation could be facing 
a housing depression--something far worse than a recession.
  Obviously, there are substantial societal and economic costs of home 
foreclosures that adversely impact American families, their 
neighborhoods, communities and municipalities. A single foreclosure 
could impose direct costs on local government agencies totaling more 
than $34,000.
  I am glad that recently we have seen legislation on the floor the 
United States House of Representatives. I have long championed in the 
first TARP bill that was introduced and signed late last Congress, that 
language be included to specifically address the issue of mortgage 
foreclosures. I had asked that $100 billion be set aside to address 
that issue. Now, my idea has been vindicated as the TARP today has 
included language and we here today are continuing to engage in the 
dialogue to provide monies to those in mortgage foreclosure. I have 
also asked for modification of homeowners' existing loans to avoid 
mortgage foreclosure. I believe that the rules governing these loans 
should be relaxed. These are indeed tough economic times that require 
tough measures.
  Because of the pervasive home foreclosures, federal legislation is 
necessary to curb the fall out from the subprime mortgage crisis. For 
consumers facing a foreclosure sale who want to retain their homes, 
Chapter 13 of the Bankruptcy Code provides some modicum of protection. 
The Supreme Court has held that the exception to a Chapter 13's ability 
to modify the rights of creditors applies even if the mortgage is 
under-secured. Thus, if a Chapter 13 debtor owes $300,000 on a mortgage 
for a home that is worth less than $200,000, he or she must repay the 
entire amount in order to keep his or her home, even though the maximum 
that the mortgage would receive upon foreclosure is the home's value, 
i.e., $200,000, less the costs of foreclosure.
  I have long championed the rights of homeowners, especially those 
facing mortgage foreclosure. I have worked with the Chairman of the 
House Judiciary Committee to include language that would relax the 
bankruptcy provisions to allow those facing mortgage foreclosure to 
restructure their debt to avoid foreclosure.
  Because I have long championed the rights of homeowners facing 
mortgage foreclose in the recent TARP bill and before the Judiciary 
Committee, I have worked with Chairman Conyers and his staff to add 
language in the Helping Americans Save Their Homes bill that would help 
Americans stay in their homes that would make the bill stronger and 
that would help more Americans.
  Specifically, I worked with Chairman Conyers to ensure that section 
109(h) of the Bankruptcy Code would be amended to waive the mandatory 
requirement, under current law, that a debtor receive credit counseling 
prior to filing for bankruptcy relief. Under the amended language there 
is now a waiver that will apply where the debtor submits to the court a 
certification that the debtor has received notice that the holder of a 
claim secured by the debtor's principal residence may commence a 
foreclosure proceeding against such residence.
  This is important because it affords the debtor the maximum relief 
without having to undergo a slow credit counseling process. This will 
help prevent the debtors credit situation from worsening, potentially 
spiraling out of control, and result in the eventual loss of his or her 
home.
  The recent bill before Congress, Helping Homeowners Save Their Home 
Act, relaxes certain Bankruptcy requirements under Chapter 13 so that 
the debtor can modify the terms of the mortgage secured by his or her 
primary residence. This is an idea that I have long championed in the 
TARP legislation--the ability of debtors to modify their existing 
primary mortgages. The bill allows for a modification of the mortgage 
for a period of up to 40 years. Such modification cannot occur if the 
debtor fails to certify that it contacted the creditor before filing 
for bankruptcy. In this way, the language in the bill allows for the 
creditor to demonstrate that it undertook its ``last clear'' chance to 
work out the restructuring of the debt with its creditor before filing 
bankruptcy.
  Importantly, the Act amends the bankruptcy code to provide that a 
debtor, the debtor's property, and property of the bankruptcy estate 
are not liable for fees and costs incurred while the Chapter 13 case is 
pending and that arises from a claim for debt secured by the debtor's 
principal residence.
  Lastly, I worked to get language in the Helping Home Owners Save 
Their Homes Act that would allow the debtors and creditors to negotiate 
before a declaration of bankruptcy is made. I made sure that the bill 
addressed present situations at the time of enactment where homeowners 
are in the process of mortgage foreclosure. This was done with a view 
toward consistency predictability and a hope that things will improve.


                            RULES COMMITTEE

  Over the past two years, 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.

  I have worked with my colleagues to strengthen the housing market and 
the economy, expand affordable mortgage loan opportunities for families 
at risk of foreclosure, and strengthen consumer protections against 
risky loans in the future. Unfortunately, problems in the subprime 
mortgage markets have helped push the housing market into its worst 
slump in 16 years.
  Before the Rules Committee, I offered an amendment to the Helping 
Americans Save Their Homes Act that would prevent 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

[[Page H3425]]

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 prevent 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.
  Specifically, my amendment language was the following:

     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.

  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 would have strengthened this already much 
needed and well thought out bill.
  I intend to offer a bill later this Congress to address this issue. I 
am delighted however that the Judiciary Committee has expressed their 
willingness to incorporate my language in the Conference language for 
this bill. Without a doubt, this issue is important to me and it 
is critical to Americans who are facing mortgage foreclosure and 
bankruptcy.

  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. Indeed, I 
feel personally vindicated that Congress has set aside $100 billion to 
address the issue of mortgage foreclosure, an issue that I have long 
championed in the 110th Congress.


                     HOUSING, FORECLOSURES, & TEXAS

  Texas ranks 17th in foreclosures. Texas would have faired far worse 
but for the fact that homeowners enjoy strong constitutional 
protections under the state's home-equity lending law. These consumer 
protections include a 3 percent cap on lender's fees, 80 percent loan-
to-value ratio (compared to many other states that allow borrowers to 
obtain 125 percent of their home's value), and mandatory judicial sign-
off on any foreclosure proceeding involving a defaulted home-equity 
loan.
  Still, in the last month, in Texas alone there have been 30,720 
foreclosures and sadly 15,839 bankruptcies. Much of this has to do with 
a lack of understanding about finance--especially personal finance.
  Last year, American's Personal income decreased $20.7 billion, or 0.2 
percent, and disposable personal income (DPI) decreased $11.8 billion, 
or 0.1 percent, in November, according to the Bureau of Economic 
Analysis. Personal consumption expenditures (PCE) decreased $56.1 
billion, or 0.6 percent. In India, household savings are about 23 
percent of their GDP.
  Even though the rate of increase has showed some slowing, 
uncertainties remain. Foreclosures and bankruptcies are high and could 
still beat last year's numbers.
  Home foreclosures are at an all-time high and they will increase as 
the recession continues. 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. This means 
that one per 62 American households is currently approaching levels not 
seen since the Depression.
  The current economic crisis and the foreclosure blight has affected 
new home sales and depressed home value generally. New home sales have 
fallen by about 50 percent.
  One in six homeowners owes more on a mortgage than the home is worth 
raising the possibility of default. Home values have fallen nationwide 
from an average of 19% from their peak in 2006 and this price plunge 
has wiped out trillions of dollars in home equity. The tide of 
foreclosure might become self-perpetuating. The nation could be facing 
a housing depression--something far worse than a recession.
  Obviously, there are substantial societal and economic costs of home 
foreclosures that adversely impact American families, their 
neighborhoods, communities and municipalities. A single foreclosure 
could impose direct costs on local government agencies totaling more 
than $34,000.
  Recently, the Congress set aside $100 billion to address the issue of 
mortgage foreclosure prevention. I have long championed that money be a 
set aside to address this very important issue. I believe in 
homeownership and will do all within my power to ensure that Americans 
remain in their houses.


                               BANKRUPTCY

  We have come full circle in our discussion today. The bill before us 
today is on bankruptcy and mortgage foreclosures.
  I have long championed in the first TARP bill that was introduced and 
signed late last Congress, that language be included to specifically 
address the issue of mortgage foreclosures. I had asked that $100 
billion be set aside to address that issue. Now, my idea has been 
vindicated as the TARP that was voted upon this week has included 
language that would give $100 billion to address the issue of mortgage 
foreclosure. I am continuing to engage in the dialogue with Leadership 
to provide monies to those in mortgage foreclosure. I have also asked 
for modification of homeowners' existing loans to avoid mortgage 
foreclosure. I believe that the rules governing these loans should be 
relaxed. These are indeed tough economic times that require tough 
measures. Again, I feel a sense of vindication on this point, because 
this bill, H.R. 1106 addresses this point


                             Credit Crunch

  A record amount of commercial real estate loans coming due in Texas 
and nationwide the next three years are at risk of not being renewed or 
refinanced, which could have dire consequences, industry leaders warn. 
Texas has approximately $27 billion in commercial loans coming up for 
refinancing through 2011, ranking among the top five states, based on 
data provided by research firms Foresight Analytics LLC and Trepp LLC. 
Nationally, Foresight Analytics estimates that $530 billion of 
commercial debt will mature through 2011. Dallas-Fort Worth has nearly 
$9 billion in commercial debt maturing in that time frame.
  Most of Texas' $27 billion in loans maturing through 2011--$18 
billion--is held by financial institutions. Texas also has $9 billion 
in commercial mortgage-backed securities, the third-largest amount 
after California and New York, according to Trepp.
  Mr. Speaker, I believe that the bills that the Congress has worked on 
since November 2008 will do yeoman's work helping America get back on 
the right track with respect to the economy and the mortgage 
foreclosure crisis.
  Ms. FUDGE. I want to thank my colleague who is obviously an 
outstanding lawyer and leader for participating in this hour.
  Mr. Speaker, certainly, as you have listened to my colleagues this 
evening, helping the economy recover is foremost in all of our minds. 
At this time in our Nation's history, it is important that Congress 
ensure that Americans have jobs to support themselves and their 
families, as well as homes to raise these families in. To fix the 
economy, we must address the foreclosure crisis.
  Foreclosures affect all races and incomes. It doesn't just stop in 
the poor

[[Page H3426]]

cities, it affects every community in every State. However, the effects 
on the black community are especially pronounced because of the lower 
level of homeownership. For many black families, home equity is the 
main source of wealth because most have lower incomes, little to no 
savings or investments, and no life insurance policies.
  The decline of the housing market is at the center of our economic 
crisis. Home prices have dropped 18 percent in the last quarter of 
2008. It is estimated that each foreclosed home reduces surrounding 
property values by as much as 9 percent, causing increased concern for 
even those who are not directly affected by the housing crisis. Nearly 
6 million homes are facing foreclosure, and nearly one in five 
homeowners owes more than their home is worth, and many cannot afford 
to refinance.
  The foreclosure crisis affects every sector of the population, and 
nearly every person in this Nation. Cities across the Nation are 
experiencing a crisis that imperils communities and cripples the 
economy. In my district, the Center For Responsible Lending projected 
5,500 foreclosures in 2009--just in the 11th District--and 18,500 
foreclosures over the next 4 years. Within the State of Ohio the 
projection is very grim: 87,500 foreclosures in 2009. In Cuyahoga 
County, 13,858 were foreclosed in 2008. Cleveland is one of the 
Nation's big cities in the most need due to its large population of 
poor families. The city has set aside nearly $11 million to handle some 
10,000 homes that have been abandoned primarily due to foreclosure. 
Much of that money, about $7.5 million, goes to demolition, while the 
remainder takes care of vacant lots, boarding up windows, picking up 
trash, and mowing lawns. This money could be used to hire more police 
officers and to keep more teachers. But because of the risk that goes 
with abandoned neighborhoods, money needs to go towards foreclosed 
properties.
  As we see far too often, for communities with foreclosed homes, it is 
a short road from nuisance to blight to crime. Blight affects a city's 
morale and slows economic growth and development. Abandoned homes also 
become harbors for criminal activity.
  Typically, it is our inner cities that bear the brunt of vacant homes 
and community blight. But now it can be seen in each and every 
community, in every development and in every neighborhood. Even the 
affluent suburbs face the same problems. The suburb of Shaker Heights 
spent nearly $1 million on foreclosed properties. The city of Euclid 
had to tear down 18 homes, and Cleveland Heights spent a great deal of 
money on maintenance on over 250 properties.
  I spoke recently with Ms. Arnetta Parker, a long-time resident of 
Richmond Heights, Ohio, a nice, upper-middle-class suburb. She and her 
husband have resided in the area for over 35 years and are currently 
doing fine. However, their community is struggling greatly. Her 
subdivision has about 80 homes, and on her street alone, four of those 
homes are vacant. She recalled one of the first times she saw a family 
be required to move out of their home and how much it hurt her to see a 
hardworking couple lose their home. The displaced couple had two kids, 
a teenage son who was very involved in sports and a very young girl. 
They were uprooted from what was familiar to them, from their schools, 
their friends and community. They became a part of the crisis.
  Just this month, foreclosures.com, a Website that looks at the rise 
of foreclosures in the United States, found an increase in foreclosures 
of over 60 percent from January to February. The organization's 
president, Alexis McGee, opined if foreclosures continue unabated, then 
the United States could see 1.2 million homes back in lenders' hands by 
the end of this year.
  The Center For Responsible Lending estimates there are 6,600 new 
foreclosures every day, and that equates to one foreclosure by one 
family that loses their home every 13 seconds.
  This Nation cannot sustain a system in which mortgage servicers 
prefer foreclosure over mortgage modifications. The Homeowner 
Affordability and Stability Plan creates incentives for lenders to 
modify mortgages by bringing mortgages more in line with the value of 
the home and should reduce the number of home foreclosures. It also 
encourages servicers to modify mortgages for at-risk homeowners before 
they are delinquent.
  Recent reports show that homeowners are not the only ones suffering 
in this crisis. Renters are also becoming victims as their landlords 
lose property to foreclosure. Usually renters are not aware of the 
foreclosure proceedings. Once the lender has foreclosed, they often 
provide little notice to tenants before demanding that the tenants 
vacate the property. Forced from the property, renters may lose their 
security deposit and everything else they have.
  To help insure that similar crises are averted in the future, 
regulations must be developed that combat mortgage fraud and predatory 
lending practices. In general, predatory lending covers those practices 
that are deemed deceptive or fraudulent, that manipulate borrowers 
through aggressive sales tactics, or that unfairly seize on the 
borrower's lack of understanding about loan terms.
  Predatory lending strips borrowers of home equity, increases the 
homeowner's chances of foreclosure, and destabilizes communities. 
Vacant properties invite criminal activities and affect neighboring 
property values.

                              {time}  2045

  The most common predatory lending tactics include excessive fees and 
abusive prepayment penalties. For example, borrowers with high-interest 
loans have a strong incentive to refinance as soon as their credit 
improves. However, as the Center for Responsible Lending estimates, up 
to 80 percent of all subprime mortgages carry a prepayment penalty. 
Homeowners become trapped by such provisions, leaving them unable to 
make cost-effective decisions.
  Moreover, studies have shown that predatory lenders often target 
vulnerable groups, including minority groups, females, elderly, and 
low-income borrowers. The evidence is clear by the concentration of 
predatory loans in low-income and minority neighborhoods. Congress and 
President Obama have both designed legislation to curve the downward 
spiral in foreclosures. These plans are coordinated among major 
government and regulatory agencies to bring targeted relief to the 
American housing market and to homeowners.
  The Helping Families Save Their Homes Act, H.R. 1106, is designed to 
stabilize the housing market by reducing foreclosures, and to help 
responsible, hardworking Americans who are losing their homes during 
this economic downturn. It could reduce foreclosures by 20 percent.
  The bill ensures that those who seek recourse via chapter 13 can do 
so through a uniform process. Several important points about the bill 
are that it protects lenders from lawsuits, it fixes the Federal 
Housing Administration's HOPE for Homeowners Program by lowering the 
fees paid by borrowers and lenders, and by providing $1,000 payments to 
servicers for each successful refinance of existing loans. It reduces 
current fees that have discouraged lenders from voluntarily 
participating. As a last resort, it allows bankruptcy judges to modify 
the terms of loans for families with existing mortgages, just as 
investors in vacation homes, real estate speculators, and corporations 
have been able to do for years. And it helps veterans, and others, to 
avoid foreclosure by allowing the Department of Veteran Affairs, the 
FHA, and the U.S. Department of Agriculture to guarantee or ensure 
mortgage loans modified either out of court or in a bankruptcy case.
  Mr. Speaker, I thank you for allowing the CBC to have a Special Order 
this evening. It is my pleasure to have anchored those hours.

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