[Congressional Record Volume 157, Number 36 (Thursday, March 10, 2011)]
[House]
[Pages H1678-H1691]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 FHA REFINANCE PROGRAM TERMINATION ACT

  The SPEAKER pro tempore. Pursuant to House Resolution 150 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the state of the Union for the consideration of the bill, H.R. 830.

                              {time}  1225


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for the consideration of the bill 
(H.R. 830) to rescind the unobligated funding for the FHA Refinance 
Program and to terminate the program, with Mr. Bass of New Hampshire in 
the chair.
  The Clerk read the title of the bill.
  The CHAIR. Pursuant to the rule, the bill is considered read the 
first time.
  The gentleman from Alabama (Mr. Bachus) and the gentleman from 
Massachusetts (Mr. Frank) each will control 30 minutes.
  The Chair recognizes the gentleman from Alabama.
  Mr. BACHUS. Mr. Chair, I yield myself such time as I may consume.
  Mr. Chairman, just this week the American people received some very 
sobering news. The budget deficit for the month of February alone is 
$223 billion. That is $8 billion every day. That is money that we are 
having to borrow from countries around the world.
  It wasn't long ago that our budget deficit for the entire year was 
only $220 billion. But thanks to a Washington spending binge that has 
occurred over the last 4 years, now our monthly budget deficit is 
larger than our annual deficit used to be. In fact, February's budget 
deficit was the largest monthly budget deficit in the history of the 
United States. Larger in real dollars than when we were fighting for 
our existence during World War II. Higher than the Civil War. And that 
has happened even though government receipts posted an increase this 
February from last February.
  Our national debt in the last 4 years has doubled. Now think of that. 
In the first 220 years of our existence, we incurred a national debt 
which, in the last 4 years, we've doubled. And by the end of this 
administration, unless we take action today--action the American people 
asked us to take last November--we will have tripled the deficit.
  In 7 years or a little less than 7 years, we will have tripled our 
deficit.
  That's why we're here on the floor today, because the American people 
have sent us a message. They said, ``Don't spend us into a financial 
oblivion. We have to balance our own budgets at home. We expect the 
same from those that we send to Washington to represent us.''
  The bill that we're debating today is an example of two things: too 
many government programs--spending programs--and too many ineffective 
government programs. It is a poster child for both.
  It's also an example of a broken promise. In 2008, during our 
financial meltdown, which has led to a recession and record 
unemployment, we promised the American people that those steps that 
were taken, that that money that was loaned, would be paid back to the 
national Treasury.

                              {time}  1230

  I am happy to say that today most of the money that was lent to what 
some have called a Wall Street bailout, what the American people 
certainly call a bailout, it has been paid back with interest, but it's 
not found its way into the national Treasury. It's not been paid back 
despite promises to the American people on this very floor of this 
House a little less than 3 years ago.
  Instead, that money has been diverted into all sorts--and that's the 
TARP bailout money--it's been used for other social programs, just what 
many warned on the floor of this House would happen. It's turned into a 
slush fund. And one of the programs that it has funded is a well-
intentioned program in which $8 billion, that's 8,000 million dollars, 
has been designated for the FHA Refinance Program. Now, the FHA program 
today, the reserves are low. And that's a program that is not in the 
greatest of shape. It's like most government programs. Eight billion 
dollars for a program to allow homeowners who are underwater on their 
mortgages to get a reduction in their mortgage.
  Now, not all can take advantage of this program. There are what the 
American people have come to know as winners and losers. With all 
government programs, it seems that some benefit, but 99 percent of 
Americans don't benefit. And that's what's happened here. The 
administration said we'll literally have hundreds of thousands of 
people that will line up for this program. But because lenders and 
borrowers are getting together and working out, or some homeowners are 
deciding that they can't afford their mortgage and they're selling 
their houses, 42 American families have been assisted by this program.
  Now, this is a program that authorizes $8 billion. And $50 million 
has actually been set aside and disbursed. In fact, the budget that the 
President has submitted has a $50 million subtraction there for a 
program that's helped 42 families; $50 million, 42 families. But think 
about this. How many families are underwater? How many American 
families have a home where they owe more than the home is worth? Twelve 
million, somewhere above 11 million--let's say 12 million.
  That means that even if this program could have helped 100,000 that 
it would help 1 out of every 120 American families. One out of 120. And 
yes, some government employee sitting behind a desk would say you are 
eligible, you can apply, you win. At the most, all the programs we're 
going to consider this week and next week, which if we act, will save 
the American taxpayers billions and billions and billions of dollars, 
all of them will benefit only an estimated 500,000 families.
  As the Inspector General has said, about 50 to 60 percent of those 
families, even if it goes to families--as we found out yesterday in a 
hearing, a lot of it is going to nonprofit groups. In Los Angeles 
alone, more went to a nonprofit group than went to the county 
government. But we are only helping 1 out of 22 families. What about 
those other 21 families? They're making their mortgage payment, and 
they're not asking the government for help.
  It seems that we're in a country where the majority of Americans 
aren't underwater; about one-fourth are. But out of all those, we're 
starting programs to help in this case 42 families, in another case 
200,000 families. And we're asking every American family, and we're 
asking their government, to start programs when we don't have enough 
money to finance the programs we have.
  But more than that, I put a photograph up. And this is the bottom 
line on this program. Fifty million dollars has been put into a fund, 
and $8 billion has been authorized for this program. And it's money we 
don't have. And it's

[[Page H1679]]

money we won't pay back. It's those children in that photograph. It's 
our constituents' children and grandchildren that will have to pay that 
back.
  Our national debt is $12 trillion--$14 trillion. You memorize a 
number, and in a few months it's irrelevant. It's no longer the real 
number. Robert Gates on January 6, in outlining the Pentagon's budget, 
said, ``This country's dire fiscal situation and the threat it poses to 
American influence and credibility around the world will only get worse 
unless the U.S. Government gets its finances in order.'' Well, who will 
get it in order? It has to be the President and this Congress. That's 
his quote January 6.
  The Joint Chiefs of Staff say that our national debt is a national 
security problem. But the message just doesn't seem to get to this 
floor, because today people will come to this floor and say, oh, if we 
get rid of this program everybody that can't pay their mortgage needs 
to call their Congressman and say you need to pay my mortgage, or there 
needs to be a government program to pay my mortgage. Well, let's not 
kid ourselves. Those children, that's who we are obligating. Last year 
we could stand on the floor and say that they each come into this world 
owing $35,000. Today it's $45,000.
  Today we're going to have to make some hard choices for them, for our 
children and our grandchildren. And oh, yeah, these programs do some 
good. Although for most homeowners who can't pay their mortgages and 
they're given a reduction, it doesn't work. The default rate in most of 
these programs is over 50 percent. One of the programs we will consider 
tomorrow, out of every dollar of taxpayer money lent, 98 percent is 
never repaid. Never repaid. How can a country continue to function like 
that? What kind of future do these children have?
  I reserve the balance of my time.
  Mr. FRANK of Massachusetts. I yield myself such time as I may 
consume.
  First, for people trying to follow this, the gentleman from Alabama 
has confused several programs in this conversation, most of which 
aren't up today. We are dealing with one at a time. He talked about 
money that went to Los Angeles and went to a group instead of the 
county. That has zero to do with today's program. Zero. And in fact, it 
doesn't have to do with individual homeowners. It's a program that 
gives aid to municipalities, which we will be debating later, probably 
next week, which gives aid to municipalities to deal with property that 
they have been stuck with. So it has nothing to do with today.
  But the gentleman does make a good point about the deficit. 
Unfortunately, he does not put his votes where his rhetoric is. The CBO 
says that this program is going to cost not $8 billion, but if it's 
fully operational over a 2-year period, which is its life span, will 
cost $175 million.

                              {time}  1240

  Now, that's money. But do you know what it is? It's much less--and 
the gentleman from Alabama voted during that same period to send money 
to the cotton farmers of Brazil. We do have a debate about the deficit 
here, but it's not about whether to reduce it. It's how.
  The gentleman from Alabama, along with the majority of Republicans 
voting, defeated an amendment--with some Democrats, although the 
majority of us voted for the amendment--to stop sending American tax 
dollars to subsidize the cotton farmers of Brazil. In the 2-year period 
during which we will be dealing with this program: Brazilian cotton 
farmers--$300 million. Americans facing foreclosure--$175 million. The 
gentleman from Alabama has a very odd way of saving money on the 
deficit.
  Then he says we have winners and losers. Well, among the big winners 
under the Republican budget and with the majority of their votes are 
the farmers who receive more than $250,000 per year in subsidy. 
Whatever happened to free enterprise? Whatever happened to standing on 
your own? An amendment was offered to limit to a measly $250,000 the 
subsidy any one entity could get. The gentleman from Alabama voted 
``no.'' That was too harsh. The gentleman from Alabama is for unlimited 
amounts of subsidy to go to a handful of farmers--but no--we can't 
spare much less than that over the time period because, in the time 
period of this bill, that would have cost $200 million, or $100 million 
a year.
  Then the gentleman quoted the Secretary of Defense, that we should 
pay more attention to the Secretary of Defense because he, along with 
many Republicans, voted to force money on the Secretary of Defense that 
he didn't want. He voted to fund the programs the Secretary of Defense 
didn't want. He's trying to get some reprogramming now, but the 
Republican Appropriations Committee won't allow it. By the way, I don't 
agree with the Secretary of Defense fully on this either.
  I disagree with the gentleman from Alabama and the Secretary of 
Defense because they don't want to spend $175 million in 2 years trying 
to deal with foreclosures in American cities. Instead, they want to 
send more than twice that amount to Afghanistan for its infrastructure. 
You talk about inefficiency. Does anyone think that President Karzai 
and his administration are going to spend the $400 million my friend 
from Alabama has voted to send toward Afghan infrastructure projects 
better than we would spend it here?
  How about $1.2 billion for the Iraqi security forces at a time when 
American municipalities are having to lay off police officers and 
firefighters and other essential employees? The gentleman from Alabama 
voted to send $1.2 billion to the Iraqi security forces. Does anyone 
here have a great deal of confidence in how efficiently they'll spend 
it?
  Now let me address a couple of mistakes the gentleman made 
specifically about this program:
  The $50 million is not being spent on 40 people; $50 million hasn't, 
in fact, been spent at all. Not a penny has been spent. The $50 million 
was reserved out of TARP money to cover losses if they were to occur. 
The CBO does say, yes, if this program is fully funded and if it gets 
the participation they expect, the total amount of losses will be $175 
million, not $8 billion. The $8 billion was a resurrection on the TARP 
for technical reasons. The CBO says, full scale, this will cost $175 
million--again, less than the gentleman of Alabama wants to send during 
that period to Brazilian cotton farmers.
  Now, as to the people who vote consistently, as some do, to cut money 
for Afghan infrastructure or for Iraqi security forces or for Brazilian 
cotton farmers or for American cotton farmers or for other recipients 
of subsidy who then are opposed to this program, I honor their 
integrity. I disagree with them in some ways, but I honor it. Yet I 
cannot accept the lecture on fiscal responsibility from someone who 
votes to lavish money in wasteful ways on Afghan cities but begrudges 
it in American cities; who would send it for Iraqi police officers but 
not for American police officers; who would send it to cotton farmers 
and to other farmers in America but not to struggling homeowners.
  This program has started slowly. By the way, there's a great 
contradiction between saying it has only helped 40 people and that it's 
going to cost $8 billion. If the pay starts to increase, it won't cost 
the full $175 million, but here's what we hope:
  There are negotiations going on now to allow people the benefit of a 
refinancing. The gentleman says it's not going to take care of 
everybody. Of course not. There is not one program that is fit for 
everybody. There are a series of programs for people in different 
circumstances, and this is one for people who could benefit from a 
lower interest rate and a refinancing but who are under water and can't 
do it. It induces the financial institutions to do it. It's voluntary. 
If financial institutions find this is unreasonable, they won't do it.
  There is an effort going on now to achieve a negotiated settlement 
involving the services of financial institutions, many of which are 
quite culpable and have misbehaved in this process, so these are not 
innocent victims being shaken down. The Attorneys General of every 
State, Republican and Democrat, and the regulators are trying to come 
up with a solution.
  This is the other point that gets lost in the rhetoric when the 
gentleman who was so eager to send money to Brazilian cotton farmers 
begrudges a small amount going to Americans facing foreclosure, which 
is that the foreclosure crisis is not just a crisis of individual 
families. It's a national economic problem. It's a macroeconomic

[[Page H1680]]

problem. To the extent that we do not do something to retard the rate 
of foreclosure, then we make it harder to get out of the economic bind 
in which we have found ourselves, which, as the gentleman correctly 
said, started from the meltdown of 2008, and we have been getting out 
of that at too slow a pace. Dealing with foreclosures is a part of it.
  This program has not yet become fully operational--and it may never 
be--but it is here to be used as a tool, especially if we are ever to 
get the agreement among the Attorneys General from both parties, the 
regulators and the financial institutions. It is a responsible way to 
deal with this. It will cost less than many of the unnecessary 
agricultural subsidy programs.

  I've got to say, Mr. Chairman, that I've got to go reread. Maybe I 
missed a footnote. I know there are these great free market economic 
texts by Ludwig von Mises and Friedrich Hayek and others. They talk 
about free enterprise, about keeping the government out of business, 
and about letting the free market work. Apparently, there is a footnote 
that says, oh, except agriculture. Overwhelmingly, my Republican 
colleagues preach this to working people, to people in urban areas and 
to people in other jobs, but it doesn't apply to cotton farmers or to 
wheat farmers or to corn farmers or to grain farmers. Billions of 
dollars go to them.
  As a matter of fact, as the gentleman from Alabama said with his 
vote: How dare you limit some farmer to a mere $250,000 in entitlement 
subsidies? Because agriculture is an entitlement, but they don't talk 
about that. They want to talk about Social Security for the elderly, 
but they don't want to talk about entitlements for agriculture.
  I do believe we need to cut the deficit. I think we can cut back 
substantially in what we're doing in Afghanistan and Iraq. We can cut 
back substantially in agriculture. We can put limits elsewhere, which I 
would like to do. I would throw in that I did not think it was a good 
idea to reduce the estate tax that the heirs of William Gates and 
Warren Buffett are going to have to pay. Although, to the credit of Mr. 
Gates and Mr. Buffett, they didn't think so either. They weren't for 
substantially reducing the estate tax on people who were going to be 
inheriting--not earning--tens of hundreds of millions of dollars.
  My colleagues over there, and some here, have supported all of that, 
and then have said we cannot put a program out there that will help 
Americans facing foreclosure--and not simply to help them but to help 
the cities and to help the whole economy. There is a great consensus 
among economists that dealing responsibly with foreclosures is the way 
to deal with this.
  So, no, please don't believe in $8 billion. It's not that. The CBO 
says it's $175 million. And $175 million is considerable, but I will 
repeat that it's less than my friends want to send to Brazil. It's less 
than they want to send to build infrastructure in Kabul and Kandahar. 
It's less than they want to spend to police Fallujah. You know, if I 
thought that latter set of funds were going to be well used, I might 
feel better about it, but we know how corrupt it is.
  There is a double standard, let me say finally. Expenditures within 
the United States are held to a very, very strict accountability, but 
as to expenditures in Iraq and in Afghanistan and elsewhere in the 
world, we know how much more wastefully and corruptly spent they are, 
and that doesn't seem to bother other people.
  I reserve the balance of my time.
  Mr. BACHUS. I yield myself such time as I may consume.
  Mr. Chair, if I were Ranking Member Frank, I would do exactly what 
he's doing. I wouldn't talk about the fact that there are only 42 
people who have been served by this program. I wouldn't talk about the 
fact that only $50 million has been set aside. I wouldn't talk about 
the $8 billion that has been authorized. I wouldn't talk about the fact 
that the American people were told this money would be repaid into the 
National Treasury. No. I would talk about the cotton subsidy, the deal 
with Brazil. That deal sounds pretty bad. It really does. The ranking 
member agrees.

                              {time}  1250

  He kept talking about this the last month, about don't shut down this 
ineffective program to help balance the budget because some of us voted 
for the cotton deal with Brazil. Well, in fact, the majority of this 
Congress, the overwhelming majority did.
  But, let's talk about that deal. Who made that deal? Did the 
gentleman from Alabama make that deal? Did the gentleman from Texas 
that's going to speak on our side, did he make the deal? Did the 
gentleman from Nevada make that deal? Did the gentleman from Illinois 
(Mr. Dold) make that deal? No. The Obama administration made that deal.
  The U.S. Trade Representative, Mr. Kirk, made that deal in an 
agreement with the Brazilian Government, not your Republican 
colleagues. Here's what he told us. He said that $60 billion worth of 
trade depended on our ability to export into Brazil without the tariffs 
they were going to impose on us. That's 420,000 U.S. jobs that were 
threatened, and he told us that if we didn't do that, they would impose 
billion $820 worth of countertariffs on such products as 
pharmaceuticals, autos, electronics, textiles, wheat, fruit, nuts, 
cotton, medical equipment. So he made a deal with them to make them 
certain payments, to compensate for that.
  Now, I don't know if he misrepresented. I don't think that President 
Obama and his administration and his U.S. Trade Representative would 
have misrepresented this. But if that was a bad deal, then the ranking 
member ought to go over there and to complain to the President, whom he 
defends, because both of them, apparently, want to spend money at every 
turn and every chance they get.

      U.S., Brazil Agree on Framework Regarding WTO Cotton Dispute

       Washington, D.C.--Today Brazil's Ministers reached a 
     decision in support of a Framework regarding the Cotton 
     dispute, which would avert the imposition of countermeasures 
     of more than $800 million this year. This includes more than 
     $560 million in countermeasures against U.S. exports which 
     were scheduled to go into effect on Monday, June 21, 2010, as 
     well as possible countermeasures on intellectual property 
     rights that could have taken effect later. We are pleased 
     with this decision, and look forward to signing the Framework 
     soon.
       The findings in the Cotton dispute concern U.S. cotton 
     support under the marketing loan and countercyclical payment 
     programs, and the GSM-102 Export Credit Guarantee Program. In 
     line with these findings, the Framework has two major 
     elements.
       First, it would provide, as a basis for a discussion toward 
     reaching a mutually agreed solution to the dispute, a limit 
     on trade-distorting cotton subsidies. Second, the Framework 
     would provide benchmarks for changes to certain elements of 
     the current GSM-102 program. In the Framework, the United 
     States and Brazil would agree to meet quarterly to discuss 
     the successor legislation to the 2008 Farm Bill as it relates 
     to trade-distorting cotton subsidies and the operation of 
     GSM-102. The Framework would not serve as a permanent 
     solution to the Cotton dispute. However, it would provide 
     specific interim steps and a process for continued 
     discussions on the programs at issue with a view to reaching 
     a solution to the dispute.
       ``I am pleased that we have been able to negotiate a 
     Framework regarding the WTO Cotton dispute that would avoid 
     the imposition of countermeasures against U.S. trade, 
     including goods and intellectual property,'' said Ambassador 
     Kirk. ``While respecting the role of the United States 
     Congress in developing the next Farm Bill, this Framework 
     would now allow us to continue to work toward a final 
     resolution of the Cotton dispute. I believe this Framework 
     will go a long way in alleviating the uncertainty in our 
     business communities and enhance the ability of the United 
     States and Brazil to build upon our dynamic trading 
     relationship.''
       ``This framework agreement provides a way forward as we 
     work with Congress toward a new farm bill in 2012,'' said 
     Secretary of Agriculture Tom Vilsack. ``Although it is not a 
     permanent solution, I am pleased that it allows us to 
     maintain our programs while considering adjustments and 
     avoiding the immediate imposition of countermeasures against 
     U.S. exports as a result of the WTO cotton decision.''


                               BACKGROUND

       The Cotton dispute is a long-running dispute brought by 
     Brazil against the United States. In 2005 and again in 2008, 
     the World Trade Organization (WTO) found that certain U.S. 
     agricultural support payments and guarantees are inconsistent 
     with WTO commitments: (1) payments to cotton producers under 
     the marketing loan and countercyclical programs; and (2) 
     export credit guarantees under the GSM-102 program, a USDA 
     program used to provide guarantees for credit extended by 
     U.S. banks or exporters to approved foreign banks for 
     purchases of U.S. agricultural exports.
       On August 31, 2009, WTO arbitrators issued arbitration 
     awards in this dispute. These

[[Page H1681]]

     awards provided the level of countermeasures that Brazil 
     could impose against U.S. trade. The annual amount of 
     countermeasures has two parts: (1) a fixed amount of $147.3 
     million for the cotton payments and (2) an amount for the 
     GSM-102 program that varies based upon program usage. Using 
     the data that we have given Brazil (in accordance with the 
     arbitrators' award), the current total of authorized 
     countermeasures is more than $800 million.
       The arbitrators also provided that Brazil could impose 
     cross-sectoral countermeasures (i.e. countermeasures in 
     sectors outside of trade in goods, specifically intellectual 
     property and services). It may impose cross-sectoral 
     countermeasures to the extent that it applies total 
     countermeasures in excess of a threshold. The threshold 
     varies annually, but is currently approximately $560 million. 
     Therefore, of the approximately $820 million in 
     countermeasures Brazil could impose now, about $260 million 
     of that could be cross-sectoral.
       On March 8, 2010 Brazil announced a final list of products 
     that would face higher tariffs beginning on April 7, 2010. 
     Goods on the list include autos, pharmaceuticals, medical 
     equipment, electronics, textiles, wheat, fruit and nuts, and 
     cotton. Brazil had not made a final decision on which U.S. 
     intellectual property rights might be affected by cross-
     sectoral countermeasures, but it had begun the process to 
     make this determination.
       On April 1, Deputy USTR Miriam Sapiro and USDA 
     Undersecretary for Farm and Foreign Agricultural Services Jim 
     Miller met with Ambassador Antonio Patriota, Secretary 
     General of Brazil's Ministry of External Relations to discuss 
     possible resolution of the dispute. As a result of that 
     dialogue, the Government of Brazil agreed not to impose any 
     countermeasures on U.S. trade at that time. In exchange, the 
     United States agreed to work with Brazil to establish a fund 
     of approximately $147.3 million per year on a pro rata basis 
     to provide technical assistance and capacity building to the 
     cotton sector in Brazil, and for international cooperation 
     related to the same sector in certain other countries. Under 
     the Memorandum of Understanding that the United States and 
     Brazil signed on April 20, 2010, the fund would continue 
     until passage of the next Farm Bill or a mutually agreed 
     solution to the Cotton dispute is reached, whichever is 
     sooner. The fund is subject to transparency and auditing 
     requirements.
       The United States also agreed to make certain near term 
     modifications to the operation of the GSM-102 Export Credit 
     Guarantee Program, and to engage with the Government of 
     Brazil in technical discussions regarding further operation 
     of the program. In addition, the United States published a 
     proposed rule on April 16, 2010, to recognize the State of 
     Santa Catarina as free of foot-and-mouth disease, rinderpest, 
     classical swine fever, African swine fever, and swine 
     vesicular disease, based on World Organization for Animal 
     Health Guidelines, and to complete a risk evaluation and 
     identify appropriate risk mitigation measures to determine 
     whether fresh beef can be imported from Brazil while 
     preventing the introduction of foot-and-mouth disease in the 
     United States.
       The parties further agreed on April 1 that they would work 
     to develop a Framework regarding the Cotton dispute by June 
     21, which would provide a path forward for a negotiated 
     solution to the Cotton dispute and allow both countries to 
     avoid the impact of countermeasures. Negotiators from Brazil 
     and the United States have been engaged intensively over the 
     past several months, and successfully concluded this 
     Framework.
       Brazil is the United States' 10th largest trading partner 
     with a total two-way goods trade of approximately $60 billion 
     in 2009.

  I yield such time as he may consume to the gentleman from Texas (Mr. 
Canseco).
  Mr. CANSECO. I thank the gentleman from Alabama.
  Mr. Chairman, I am here to support the bill to terminate the FHA 
Refinance Program. This bill is not about programs that work. It's not 
about programs that have continually helped to create jobs and to help 
our faltering economy and our laggard job growth.
  This bill is about a failed government program, because the FHA 
refinance program that went into effect in September of 2010 has failed 
to work properly. By the end of December of last year, of 2010, a mere 
22 mortgages had been refinanced through the program at a cost of $50 
million. That's an average of $2.3 million per mortgage. The conclusion 
is very, very clear. The program does not work and it's wasteful.
  We are in an economic crisis. According to the Congressional Budget 
Office, the Federal Government is set to run a deficit for fiscal year 
2011 of $1.5 trillion. If serious steps are not taken right now, we are 
set and ready to see in 2012 another trillion dollars added to our 
deficit.
  This river of red ink is not sustainable. Americans are coming to 
grips with the fact that, if nothing is done, we will be the first 
generation in American history to leave for our children a legacy of 
insurmountable debt and economic stagnation.
  And while there are a number of difficult decisions that we must make 
in the months and years ahead, common sense dictates that we can begin 
to get our spending under control by cutting programs that simply don't 
work, no matter how large or how small they are or no matter how 
beneficent they may sound. They just don't work. This one does not 
work.
  Many of my colleagues on the other side of the aisle often think that 
we are just one government program away from solving our problems. But 
when you think that way, you end up piling one government program on 
top of another, wasting the taxpayers' money without even helping our 
fellow citizens who are struggling in this day and age.
  The last 2 years have proven that government programs and government 
spending do very little in the way of stimulating jobs that we need 
most and economic growth. We in the Congress of the United States have 
a duty to be the stewards of the people's money, the people's tax 
dollars. The least we can do is tell our constituents that we are doing 
our job by cutting the stuff that does not work. This does not work.
  Mr. FRANK of Massachusetts. I yield myself such time as I may 
consume.
  Two points: First, you have just heard a fantasy that $50 million has 
been spent for 42 loans. That is not even remotely close to being true. 
Fifty million has been set aside in a reserve for defaults if and when 
they come. Not a penny of it has been given to anybody. It is simply 
sitting in that account, in case, and the 42 loans have nothing to do 
with that.
  Yes, the gentleman from Alabama said I didn't talk about it. I did 
talk about it. I corrected the misuse of the 50 million from last week. 
He didn't misuse it today. And I mentioned that it started slow and it 
may not get beyond where it is now. I mentioned that it is in reserve 
to use it more. So, yes, we have only got 42. I talked about that.
  The 8 billion is a fantasy. The CBO says at it's best, this is going 
to cost $175 million. The 8 billion is a purely bookkeeping account.
  But I want to get back to the fascinating explanation by the 
gentleman from Alabama as to why he and the majority of Republicans 
voted to send $150 million per year last year, this year, and for the 
next couple of years to Brazil: Obama made him do it. Listen carefully. 
The explanation for this expenditure to go to Brazil, that the poor 
gentleman from Alabama voted for, is Barack Obama made him do it.
  The President is a very convenient place for them to hide. In fact, 
if he is asking me if I am critical of the President in that, yes, I am 
critical of the President many times. I agree with him overall. But I 
did not agree with him that we should send 1.2 billion for Iraq 
security forces. The gentleman from Alabama did. I didn't agree we 
should send $400 million for Afghan infrastructure.
  The gentleman seems to think it's some major debating point because 
the President takes the position that I disagree? Perhaps his view is 
you always agree with the President of your party. It's not mine. It's 
not a responsible way to legislate.
  Secondly, there was an alternative to sending $150 million to Brazil. 
We could have sent $150 million less to Americans. The finding was that 
we were putting Brazilian cotton farmers at a $150 million disadvantage 
per year because of the subsidy we gave to Americans. We could have 
come in with legislation that would have reduced the Americans'.
  So, in fact, I underestimated the waste of money that the gentleman 
from Alabama is indulging because Barack Obama made him do it and he 
was powerless to resist, apparently, because it's $300 million a year.
  We had two options: We could keep the level of subsidy for American 
cotton farmers and match that to the Brazilians, or we could reduce it 
by $150 million in America and reduce it to Brazil over a 4-year period 
when this will be in effect. That's over a billion dollars, a 
considerable amount of money.
  So, yes, it is true, the President sometimes makes unwise 
recommendations, in my judgment. But the argument for the gentleman 
from Alabama that he is to be absolved from responsibility for his 
vote, and the majority of Republicans--the majority of us on our

[[Page H1682]]

side repudiated the President's position in this case. But the 
gentleman from Alabama has claimed, Don't blame me; Obama made me do it 
is no more credible than his invocation of some fantasy figures.
  I reserve the balance of my time.
  Mr. BACHUS. May I inquire of the Chair how much time each side has 
remaining?
  The CHAIR. The gentleman from Alabama has 11 minutes remaining, and 
the gentleman from Massachusetts has 17\1/2\ minutes remaining.
  Mr. BACHUS. I continue to reserve the balance of my time.

                              {time}  1300

  Mr. FRANK of Massachusetts. I yield 5 minutes to the gentleman from 
Massachusetts (Mr. Lynch).
  Mr. LYNCH. I thank the ranking member.
  I rise in opposition to H.R. 830, the FHA Refinance Program 
Termination Act and also the other bills that will be coming to the 
floor on the same subject.
  I want to emphasize one thing that the ranking member has raised, and 
that is that these are voluntary programs. These are all voluntary 
programs that are trying to keep American families in their homes. 
These programs require the banks to agree that this is a good deal and 
it's deserving of these homeowners. These programs require that the 
homeowner also agree, obviously, and also that in many cases that the 
servicer agree.
  Now, because you're requiring a voluntary agreement and an agreement 
that has been crafted in such a way that all parties are balanced in 
their interests, it's been difficult to generate the number of families 
to be helped so far.
  I do want to also emphasize that this program started in November. 
This program started in November. We've had about 4 months to get 
families on board to be helped by these programs. For much of that 4 
months, we have had abject resistance from the servicers. They have 
been the obstruction in making these programs work. But I am happy to 
say that in the last 10 days, we have had three major servicers, 
Allied, GMAC and Wells Fargo, that have finally come forward and said, 
we're going to work within this program, and we're going to try to help 
families stay in their homes not out of charity, but because they 
realize that we need to put a floor under this housing market in order 
to help sustain the weak economic recovery that we have going forward.
  What exacerbates the situation is also the way the banks have handled 
this up until now. In my district, and it's happened all across the 
country, we've had situations where banks and servicers have employed 
robosigners to the point where many of these foreclosure documents have 
been signed without full knowledge by the individuals charged with that 
responsibility. We've seen many courts in this country look at the 
foreclosure process used by these banks and have ruled them to be 
illegal and that, in fact, the banks did not own the homes that they 
were trying to foreclose on. And this has happened thousands of times 
across the country. It has not been a smooth process.
  We've also had a very, very difficult situation for our men and women 
in uniform. Despite the fact that there's been a law in this country 
since World War I that we will not foreclose on servicemembers' homes 
while they are in combat, while they are in Afghanistan or Iraq, we've 
had banks do hundreds and hundreds of foreclosures on our men and women 
in uniform. There are needs for these programs, and yet we are 
conveniently forgetting those facts.
  Lastly, this bill, with all due respect, has been poorly drafted in a 
meaningful way. This bill, if adopted, would prohibit all voluntary 
agreements between parties to stop these foreclosures. And I understand 
what the targets of my Republican colleagues are, but the bill is 
drafted so broadly it would prevent the banks, the FHA, the homeowner 
and the servicer to come to a voluntary agreement.
  Private enterprise has been something that my colleagues used to 
encourage, and here we have voluntary agreements that will be 
prohibited by this bill. And I do not think that is the intent of the 
gentleman, however, that is the actual impact of his legislation. And I 
have an amendment more specifically to deal with that at a later time. 
But we have to slow down the foreclosure process to put a floor under 
this economy. We have to help the families that can be helped. And this 
FHA Refinance Program Termination Act would prevent that from 
happening.
  Mr. BACHUS. Mr. Chair, I yield 4 minutes to the gentleman from 
Illinois (Mr. Dold).
  Mr. DOLD. Thank you, Mr. Chairman, for yielding.
  Mr. Chairman, H.R. 830 is commonsense legislation that stops 
inefficient and ineffective government spending. At the outset of this 
$8 billion program, its failure was inevitable. That inevitable failure 
is now undeniable. It doesn't work for the homeowner, it doesn't work 
for the taxpaying American families, and it certainly doesn't work for 
future generations who are trying to claw their way out of the debt 
that we are burdening them with each and every day.
  So let's go back and let's talk about the homeowners. We've got 12 
million mortgages in America that are currently underwater. And yet 
this program, this program which was actually rolled out in March, it 
started about 6 months ago, has 245 applications--245. How many have 
actually made it over the hurdles and have gotten actually some help 
and refinanced? Forty-four. Forty-four refinances. We've got $8.12 
billion that has been obligated. We have $50 million that has been 
disbursed.
  Now, a quick back-of-the-envelope calculation, that's $1.1 million 
per mortgage refinanced thus far. If we look at it even further, were 
these million-dollar mortgages? Actually, the average mortgage was 
about $300,000. So we spent, the American taxpayers, in terms of their 
dollars, we spent $1.1 million in order to refinance a $300,000 loan. 
The administration said that we're going to have 1.5 million homeowners 
get into this program, and yet we've taken almost a year and we have 44 
that have actually gone through.
  If you were to get through this program, if you were one of the lucky 
ones, one of the 44, clearly, it's not going to help you insofar as 
you're going to destroy your credit for the next several years. The 
average credit score of the 44 that are in the program was 711. That 
credit score is going to go down. Is their monthly payment going to go 
down? In many instances, no, because they're going to have to come up 
with closing costs. They're going to have to pay private mortgage 
insurance if they haven't been paying it already. And so there are 
other requirements that are simply a burden on the actual homeowners.
  It's time that we tell the American public the truth. It's time that 
we in this body recognize when a government program is not working. We 
need to get rid of this program--$8.12 billion obligated, $50 million 
disbursed for 245 applicants and 44 mortgages actually redone.
  The program certainly doesn't work for the American taxpayer. We're 
looking at debts and deficits in Washington. And many of us were sent 
here to Washington to try to get the out-of-control government spending 
back in line. And I would say that certainly $1.1 million per mortgage 
is not a good use of the taxpayer dollars.
  When we look at future generations and we look at the amount of money 
that we're spending right now, $1.48 trillion in deficit spending works 
out to be over $3 million a minute. The President's budget comes out to 
talking about 1.6 for the next year. We cannot continue to spend money 
that we don't have. Our debt is at $14 trillion. When we actually took 
a look at the Treasury report that came out just a couple of days ago 
talking about TARP, because this program is basically on TARP funds, 
they recognize that the mortgage modification programs were never 
intended to be recovered. This, to me, I think is an enormous problem.
  This is a program that doesn't work for the homeowner, it doesn't 
work for the American public, and it certainly is not going to work for 
future generations.
  Mr. FRANK of Massachusetts. I yield myself 30 seconds simply to say 
the gentleman has simply repeated an absolute fantasy. This is not a 
$50 million expenditure for 40 loans. The $50 million has not been 
given to anybody, not

[[Page H1683]]

a penny of it. It has been put in a reserve account. Fifty million has 
been set aside in a reserve account. It was disbursed from the TARP to 
a reserve account. The CBO, as I've submitted if this goes forward, it 
will be about $12,000 per loan.
  Last week, the gentleman from Illinois was claiming that if you 
participate in this program, you would have a tax liability. He learned 
that that was totally wrong. He is perpetuating error.
  I now yield 2 minutes to the gentleman from California (Mr. McNerney)
  Mr. McNERNEY. Thank you, Mr. Ranking Member.
  I'm proud to represent much of San Joaquin County, which is the jewel 
of California's Central Valley. Our valley is a great place to live and 
work; but, unfortunately, we've been hit very hard by the economic 
downturn. The valley has been ground zero for the foreclosure crisis. 
Over the past few years, thousands of families in San Joaquin County 
and throughout the valley have lost their homes.

                              {time}  1310

  I hosted foreclosure workshops, and I met with hardworking people who 
were misled by lenders who were struggling to stay on top of their 
mortgages. I have seen grown men cry because they couldn't keep a roof 
over their children's heads. I have talked to veterans who served their 
country, only to return home to notices of default. And I have met 
seniors on the brink of homelessness.
  The administration's foreclosure prevention initiatives have fallen 
short in the valley. Simply put, the administration's programs haven't 
effectively served the people who are underwater on their mortgage, and 
the administration hasn't been tough enough on the big banks. I call on 
President Obama and his Cabinet to develop more effective efforts to 
stem the tide of foreclosures.
  But despite these shortcomings, the bill the House Republicans are 
offering today is absolutely the wrong approach. It is throwing the 
baby out with the bath water. Instead of canceling foreclosure relief 
programs at their beginning stages, we should be strengthening them so 
they are more effective. Mortgage counselors from my district advise 
and plead to improve our efforts to get tough on big banks and provide 
meaningful relief to families.
  Stabilizing the housing market is critical to economic recovery and 
creating jobs. For these reasons, I oppose H.R. 830.
  Mr. BACHUS. Mr. Chairman, I yield 30 seconds to the gentleman from 
Illinois (Mr. Dold).
  Mr. DOLD. Mr. Chairman, running a business, I have to tell you, 
obligated funds are one thing, disbursed funds are quite another. If I 
can, from the monthly 105(a) report delivered to the Congress from TARP 
and from the Department of the Treasury, and I will submit it for the 
Record, under ``Obligated'' all of the way down here when it is talking 
about the FHA refinance, it is $8.12 billion. And in an entirely 
different column under ``Disbursed,'' it is $50 million. From the paper 
here from the Department of the Treasury, obligated and disbursed are 
different things. We have $50 million that has been disbursed.

                                                                   FIGURE 1--DAILY TARP PROGRESS REPORT AS OF FEBRUARY 3, 2011
                                                                                          [$ billions]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Principal/Investment                                                Income/revenue
                                                  ----------------------------------------------------------------------------------------------------------------------------------  Total cash
       (*Dollars in billions*)         Obligated                                            Realized                                           Gain/other    Warrants      Total         back
                                                    Disbursed    Repayments   Write-offs      loss     Outstanding   Dividends     Interest      income        sold        income
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Bank Support Programs
    Capital Purchase Program (CPP)
        Preferred & Other Securities       179.89       179.89       146.08         2.58         0.00        30.88         9.45  ...........  ...........         6.93        16.38       162.46
        Citigroup Common............        25.00        25.00        25.00  ...........  ...........         0.00         0.93  ...........         6.85         0.05         7.84        32.84
    Targeted Investment Program
     (TIP)
        Bank Of America.............        20.00        20.00        20.00  ...........  ...........  ...........         1.44  ...........  ...........         1.24         2.67        22.67
        Citigroup...................        20.00        20.00        20.00  ...........  ...........  ...........         1.57  ...........  ...........         0.19         1.76        21.76
    Asset Guarantee Program (AGP)
        Bank Of America.............  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........         0.28  ...........         0.28         0.28
        Citigroup...................         5.00  ...........  ...........  ...........  ...........  ...........         0.44  ...........         2.25         0.07         2.76         2.76
    Community Development Capital            0.57         0.57  ...........  ...........  ...........         0.57         0.00  ...........  ...........  ...........         0.00         0.00
     Initiative (CDCI)..............
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
            Bank Program Totals.....       250.46       245.46       211.08         2.58         0.00        31.45        13.83  ...........         9.37         8.48        31.68       242.76
Credit Market Programs
    Public-Private Investment
     Program (PPIP)
        Equity......................         7.51         5.37         0.16  ...........  ...........         5.21         0.40  ...........         0.00  ...........         0.40         0.56
        Debt........................        14.90        10.52         0.46  ...........  ...........        10.06  ...........         0.10  ...........  ...........         0.10         0.56
    Term Asset Backed Securities             4.30         0.10  ...........  ...........  ...........         0.10  ...........  ...........  ...........  ...........  ...........  ...........
     Lending Facility...............
    Purchase SBA 7(a) Securities             0.37         0.37         0.01  ...........  ...........         0.36  ...........         0.00         0.00  ...........         0.00         0.01
     (SBA)..........................
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
            Credit Market Program           27.07        16.36         0.63  ...........  ...........        15.73         0.40         0.10         0.00  ...........         0.50         1.13
             Totals.................
Other Programs
    American international Group
     (AIG)
        Common......................        47.54        47.54  ...........  ...........  ...........        47.54  ...........  ...........         0.06  ...........         0.06         0.06
        Preferred...................        22.29        20.29  ...........  ...........  ...........        20.29  ...........  ...........  ...........  ...........  ...........  ...........
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    AIG Totals......................        69.84        67.84  ...........  ...........  ...........        67.84  ...........  ...........         0.06  ...........         0.06         0.06
    Automotive Industry Financing
     Program (AIFP)
        GM..........................        51.03        51.03        23.07  ...........         4.44        23.53  ...........         0.77         0.10  ...........         0.86        23.93
        Chrysler....................        14.43        12.37         3.85         1.60  ...........         6.92  ...........         0.58         0.06  ...........         0.64         4.49
        Ally (GMAC).................        16.29        16.29  ...........  ...........  ...........        16.29         2.00  ...........  ...........  ...........         2.00         2.00
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
    AIFP Totals.....................        81.76        79.69        26.92         1.60         4.44        46.74         2.00         1.35         0.16  ...........         3.51        30.43
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
            Other Programs Totals...       151.59       147.53        26.92         1.60         4.44       114.57         2.00         1.35         0.21  ...........         3.56        30.48
Treasury Housing Programs Under TARP
    Making Homes Affordable.........        29.91         0.94  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........
    HFA Hardest-Hit Fund............         7.60         0.10  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........
    FHA Refinance...................         8.12         0.05  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
            Housing Totals..........        45.62         1.10  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........  ...........
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
            Grand Totals............       474.76       410.45       238.63         4.18         4.44       161.75        16.23         1.45         9.59         8.48        35.74       274.38
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

  Mr. FRANK of Massachusetts. I yield myself 15 seconds to further 
elucidate matters to the gentleman from Illinois. It has been disbursed 
in a letter of credit, none of which has been drawn down. It sits there 
as a reserve in case of losses.
  I now yield 3 minutes to the gentlewoman from New York (Mrs. 
Maloney).
  Mrs. MALONEY. I thank the ranking member for yielding.
  I rise in opposition to H.R. 830. This bill is one of four separate 
anti-foreclosure programs aimed at helping troubled homeowners stay in 
their homes that the new House Republican majority is planning to end. 
What is very troubling is that they don't have any idea of what to put 
in its place. We know that we have 12 million mortgages that are 
underwater, that need help. They are in all of our States, but they are 
not coming forward with any ideas of how to help the economy or how to 
help the people.
  Now, this particular program is just getting started. It is the FHA 
Short Refinance Program, and it is one of the foreclosure prevention 
programs that

[[Page H1684]]

would not only help the individual homeowners, but also help to 
stabilize the overall U.S. housing market, which is 25 percent of our 
economy. So it not only helps an individual. It helps a locality, it 
helps our country, it helps our economic strength.
  The result of ending this program would be hundreds of thousands of 
additional foreclosures and steeper price declines in our housing. It 
is outrageous. It is shortsighted. It is mean, and it is wrong.
  Now, in this program it would allow the borrowers to reduce the 
principal owed on their homes up to 10 percent so that their payments 
are lower, so that they can save money that they can't afford. And in 
return, the banks would get an FHA-insured loan that is subject to all 
of FHA's strict standards. So to get this loan, you will have to jump 
through hoops to be able to qualify.
  And it is voluntary. Just last week, several major banks in America 
voluntarily walked forward to help out--Citibank, Wells Fargo, and Bank 
of America, to name a few. So the program is just getting started and 
the $50 million line of credit is like a line of credit you draw down 
on. Hopefully, we won't even have to tap into it. Hopefully, our 
economy improves and people are able to pay their mortgages.
  The standards are very strict. The owners must be current on their 
payments. It must be their primary residence. They have to have full 
documentation to qualify. So it is a strict program.
  I want to come back to an issue that is very important to me and, 
that is, this affects lives. This affects people.
  In Congressman Frank's home State, there are over 222,000 residents 
whose mortgages are underwater that could qualify possibly if they 
could meet the criteria. It is part of a total package to help our 
economy move forward, and the opposition, the Republican majority, has 
no ideas of their own. It is just to come in and cut a good program 
that is just getting started.
  They mentioned the 44 people that have been helped. They say that is 
not important. I would say it is very important to the 44 people who 
have been helped, and there could be 12 million who could be helped 
under this program.
  Mr. BACHUS. I reserve the balance of my time.
  Mr. FRANK of Massachusetts. I yield 4 minutes to the gentleman from 
North Carolina (Mr. Miller), one of the leading House experts on this 
matter.
  Mr. MILLER of North Carolina. Mr. Chairman, I want to reassure 
Americans that it is not true that no problem ever gets fixed in 
Washington. Ten years ago, the debate here in Congress was what to do 
with the surplus. In fact, we paid off $400 billion of the debt; and 
Alan Greenspan, who was then the chairman of the Federal Reserve Board, 
worried that we would pay off the national debt too quickly and it 
might be unsettling to the economy. Mr. Chairman, if there is one 
problem that got solved in the past decade, it is that problem: the 
problem of paying off the national debt too quickly.
  My party can claim none of the credit for that. It was a Republican 
President and a Republican Congress. I must admit that I don't like 
what they did to solve that problem of paying off the national debt too 
quickly. They gave tax cuts to America's top one-tenth of 1 percent, 
Americans making more than $2,340,000, and we saw just a couple of 
months ago that that was one thing that was absolutely nonnegotiable 
for them. They would give up everything before they would let those 
Americans have to pay any more in taxes.
  When there was a proposal to expand Medicare to take care of 
prescription drugs, something I supported generally, Republicans in 
Congress passed a bill that was not paid for, as other programs like 
that had been paid for, and was a giveaway to the insurance industry 
and to the prescription drug industry. So when they are giving tax cuts 
to the very, very richest Americans, the richest of the rich, when they 
are giving away taxpayer money to the insurance companies and to the 
prescription drug industry, the drug industry, they don't worry about 
deficits at all. It is only when Democrats take the Presidency, and 
particularly in the last 2 years when we have been dealing with the 
worst recession since the Great Depression and have been trying to pull 
the country out of a nosedive, that they have suddenly become worried 
about the deficits and criticized everything that we have done to try 
to save the country from the disaster that we inherited.
  It is only the programs that help working and middle class families 
that seem to give them a problem, like this one. Now, we have been on 
the case of subprime lending and its effects for a long time. I 
introduced legislation in 2004 to rein in subprime lending, not a bit 
of help from Republicans. Mr. Watt and I introduced that bill. It was 
Miller-Watt. Two years later, it became Miller-Watt-Frank. We have been 
on this case.
  The gentleman from Alabama said in committee the other day, Show me a 
way to deal with this problem that doesn't cost taxpayer money. I did 
that in 2007. I introduced a bill that bankruptcy lawyers and judges 
have said was one way to deal with the problem, let bankruptcy judges 
modify mortgages in bankruptcy the same way they modify all other kinds 
of secured debt; no support from Republicans at all, and the opposition 
Republicans killed that.
  I urged the Federal agencies that set rules for the banks to require 
they treat people better than they have been treating them when they 
manage their mortgages, no help from Republicans at all. Just 
yesterday, the Federal agencies in charge of the banks' conduct and the 
States' attorneys general have been pushing them, the banks, to impose 
fines for violating the law in how they handle foreclosures.

                              {time}  1320

  Several Republicans sent a letter yesterday to the Secretary of the 
Treasury protesting that Federal agencies were being too mean to the 
banks.
  I thought most politicians learned during the Keating Five that your 
office does not give you the right to give your political buddies, your 
contributors, a get-out-of-jail-free card, but that appears to be what 
they're willing to do when it's the banking industry that is 
complaining about it. It is not true that this problem of foreclosures 
is just affecting a handful of Americans.
  The CHAIR. The time of the gentleman has expired.
  Mr. FRANK of Massachusetts. I yield the gentleman 1 additional 
minute.
  Mr. MILLER of North Carolina. We are in a cycle of foreclosures 
leading to the reduced value of homes, more Americans underwater, and 
when people are underwater, they've seen their life savings disappear. 
More Americans underwater, more foreclosures, and on and on.
  We have got to put a bottom on the housing market. We know this can 
work. This program is very similar to a program in the New Deal that 
did work, the Homeowners Loan Corporation. It turned a profit--a slight 
profit, but a profit--saved the middle class, and saved the housing 
industry. We need to do something. Republicans have offered nothing.
  Mr. BACHUS. Mr. Chair, I yield 1\1/4\ minutes to the gentleman from 
Nevada (Mr. Heck).
  Mr. HECK. I thank the gentleman from Alabama for the time.
  Mr. Chairman, I rise today to oppose H.R. 830, the FHA Refinance 
Program Termination Act. I represent the district that is truly ground 
zero for America's housing crisis; 390,192 mortgages in Nevada are 
underwater. Let me say that again: 390,192 families in Nevada are 
underwater.
  I agree that people need a paycheck, not a government check, but we 
must help individuals who are trying to do the right thing. This 
program gives some of those Nevadans who are current on their mortgage 
but underwater the ability to refinance their loan.
  Some will say this program is a failure because too few mortgages 
have been refinanced through it. They'll say not enough money has been 
distributed. I say, a failed PR job should not be the reason a good 
program dies. And the FHA Refinance Program can be a good program, but 
it needs more attention, and perhaps reform, so homeowners know it's an 
option.
  Vote ``no'' on H.R. 830 and give homeowners a chance to take 
advantage of this program.
  Mr. BACHUS. Mr. Chair, I yield 1 minute to the gentleman from Kansas 
(Mr. Yoder).

[[Page H1685]]

  Mr. YODER. Thank you, Mr. Chairman.
  I rise today in strong support of H.R. 830. The bill would repeal a 
well-intentioned but bankrupt policy.
  Mr. Chairman, the American people are tired of bailout after bailout 
and big spending bill after big spending bill. With $14 trillion in 
debt and borrowing $5 billion a day, yet unemployment is at 9 percent, 
the American people are sending us an unmistakable message: The idea of 
borrowing, bailing out and spending isn't working.
  We're borrowing more money in Washington with this program that we 
don't have to help Americans borrow more money at home that they can't 
afford for housing they can't afford. Mr. Chairman, this is madness. 
When will this stop and when will the politicians in Washington 
understand that we're not going to be able to borrow and spend our way 
to prosperity? The American people are tired of this. They want 
Washington leaders to step up, reduce spending, and eliminate programs 
that aren't working.
  Mr. Chairman, I ask today that we pass this legislation and restore 
fiscal sanity to Washington.
  Mr. FRANK of Massachusetts. How much time is remaining on both sides, 
Mr. Chairman?
  The CHAIR. The gentleman from Massachusetts has 2\1/2\ minutes 
remaining. The gentleman from Alabama has 4\1/4\ minutes remaining.
  Mr. FRANK of Massachusetts. I have only one remaining speaker. I will 
defer until the gentleman has his last speaker.
  Mr. BACHUS. Mr. Chair, I yield 2\1/2\ minutes to the gentlelady from 
Illinois (Mrs. Biggert).
  Mrs. BIGGERT. I thank the gentleman for yielding.
  Mr. Chairman, President Ronald Reagan famously said--with tongue in 
cheek, no doubt--that the closest thing to eternal life on this Earth 
is a Federal Government program.
  I rise today in support of H.R. 830, legislation offered by my friend 
from Illinois (Mr. Dold). At the risk of disproving the late 
President's axiom, let me just say that H.R. 830 will demonstrate that 
Congress does have the good sense, the fortitude, and the wherewithal 
to bring an end to a Federal program, especially one that is not 
working.
  The program in question is the FHA Refinancing Program, which was 
authorized under the broadest of provisions in the TARP legislation 
back in 2008. In 2010, the program was conceived in haste, enacted with 
no vote in Congress, and was designed to augment another failed 
program, the Making Homes Affordable Program, or HAMP, which has done 
more harm than good.
  Under the FHA Refinancing Program, the FHA is directed to use TARP 
funds to refinance mortgages that are current but underwater. Its 
record has been abysmal, with the FHA Commissioner stating during our 
hearing last month: ``As of February 11, 44 loans have been endorsed.'' 
Where else but in Washington would it be a good idea to obligate $8 
billion in taxpayer funds and disburse $50 million of those dollars? 
Now, whether it's to help 44 homeowners or not, we don't know how many 
will be in default or what it will cost. But that money has been 
disbursed from the U.S. Treasury.
  Mr. Chairman, this bill ends another failed government program. 
Taxpayers shouldn't foot the bill for failure. I would urge my 
colleagues to support the bill.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself the balance 
of my time.
  A week ago when we debated this in committee, the author of the bill, 
the gentleman from Illinois (Mr. Dold), was telling people that if they 
joined this program they would have a tax liability. He was wrong. It 
wasn't his fault. He was told that that was the case. He dutifully read 
what he was told. You haven't heard that again because he found out 
that was wrong.
  He was also told that it was going to be $50 million disbursed. They 
don't seem to be clear on what that means. No, $50 million has not been 
spent on any individual. Fifty million has been set aside in a letter 
of credit if necessary in the future to pay for defaults. So this 
million dollars per loan is, of course, a fantasy.
  Now, it is true, the program has not yet had a major impact. And if 
it does not prove itself out, it never will. It cannot be both wildly 
expensive and nonexistent. It is there. If we get an agreement 
involving all the attorneys general of both parties, involving the 
regulators and the financial institutions, this will be one of the 
tools that will accommodate people. CBO does think there could be a 
loss. Their prediction is, their best guess--and they're the best 
objective element we have--you could get an amount of $12,000 or so per 
loan lost here. Not a million dollars; 12,000. It is part of a panoply 
of projects to try and reduce foreclosures and help the economy deal 
with this crisis.
  And for people who, and I repeat it--they don't like it--they'll send 
money to Brazil, they'll send money to Afghan cities, they'll send 
money to Iraqi security, they'll subsidize farmers at more than 
$250,000 a year, but $12,000 per homeowner at most is too much for 
them. And it isn't just for the homeowners; it is a necessary part of 
getting out of our economic crisis.
  So I hope that this is defeated. I appreciated what the gentleman 
from Nevada said. Yes, it can be improved. The fact that only 44 people 
have been involved so far means they are proceeding, appropriately, 
cautiously. This is a program with great promise. It may not turn out, 
but if a promise doesn't turn out, then it doesn't cost anything. And 
if it does turn out to be a workable part of an overall solution, it 
will be money much better spent than many of the billions my colleagues 
on the other side are prepared to subsidize some of their favored 
sacred cows as opposed to doing something that will help the whole 
economy.
  I yield back the balance of my time.
  Mr. BACHUS. I yield myself the balance of my time.
  Mr. Chair, Members of this body, what are we talking about when we're 
talking about cutting government spending? We're talking about these 
children.

                              {time}  1330

  These children cannot afford a future where its Federal Government 
spends $8 billion more every day than it takes in.
  Now, the ranking member has criticized our military spending. I could 
have a picture of my grandchildren up, and I could have a picture of 
one of my little granddaughters whose dad served in the U.S. Marines. 
Their unit served in Afghanistan and in Iraq. So I make no apology for 
supporting our troops. Now if the President decides to call them home, 
my son would support that.
  Now, Ranking Member Frank said this sits in a fund. This program that 
has helped 44 families whose average mortgage was $330,000--that's more 
than the cost of a home in my district. But here is President Obama's 
report to us that $50 million has been disbursed, but the alarming 
figure is $8.12 billion that's obligated.
  The gentlelady from New York said that the banks--Citibank, Bank of 
America--they're all lining up to use this program. I would be too. 
This transfers obligations from lenders to the taxpayer. As long as 
these mortgages were making money, the banks profited. But all of a 
sudden when they're underwater and a borrower maybe can't make the 
payment, hey, if I was a bank, I would say, yeah, let the government, 
let the taxpayers reduce this mortgage. That ought to be between the 
bank and the homeowners.
  Forty-two families? You say all these four programs we're going to 
debate this week and next week--which cost billions of dollars--they're 
going to help half a million families? There are 12 million families 
that are underwater.
  Let's talk about something very important. If we don't get our 
financial house in order, I'll quote the words of Admiral Mike Mullen 
on August 25 before CNN, and I will close with this, ``The most 
significant threat to our national security is our debt.'' And that 
threat comes from this body and the administration. It's time to cut 
spending. Think about them. Think about their future.
  Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Chair, I rise in opposition 
to H.R. 830, the FHA Refinance Program Termination Act.
  This legislation would end the FHA's short-term refinance program 
authorized under the Troubled Asset Relief Program.

[[Page H1686]]

  A program designed to help homeowners refinance their existing 
mortgage for lower interest rates.
  With declining home values, borrowers are caught in mortgages that 
they can no longer afford.
  This is because their rates have reset or because their interest-only 
payments have not allowed them to grow any equity in their homes.
  They are making their payments--but just barely.
  Mr. Chair, we should continue to help hard working Americans who are 
paying their bills on time every month stay in their homes.
  Ending this vital recovery program with no alternative plan is just 
wrong.
  The Republicans reckless spending proposals will move our country 
backwards not only domestically but globally.
  Eliminating this program will cost us more in the long-term.
  While I believe cuts are necessary to address the Nation's long-term 
fiscal problems, it must be done responsibly and with the American 
public's interest in mind.
  I encourage my colleagues to oppose this bill.
  Mr. DINGELL. Mr. Chair, I rise in opposition to H.R. 830, a hasty 
political ploy that will terminate a promising program. I refuse to let 
my Republican colleagues, determined to appear fiscally austere at any 
cost, cut budding initiatives that are in the best interest of the 
country.
  The FHA Refinance Program is tailored to benefit responsible 
homeowners--homeowners who, through principal write-downs, will be able 
to stay in their homes. It is also structured to protect lenders from 
possible foreclosure losses and save communities from increased blight. 
Ten states, including my home state of Michigan, posted foreclosure 
discounts of more than 35 percent in 2010. We must use all our tools at 
hand to stem this massive foreclosure epidemic.
  I hear daily from struggling homeowners who are trying to keep 
afloat. Negative equity mortgages are plaguing our country from coast 
to coast. At the end of last year, 11.1 million, or 23.1 percent, of 
all residential mortgages were in negative equity. In Michigan, over 36 
percent of mortgages were in negative equity. Home prices are expected 
to fall another five to ten percent in 2011. Millions of borrowers are 
being held captive in their homes, unable to move or sell their 
properties. Keeping programs like the FHA Refinance Program alive is 
crucial to spurring economic recovery and giving the mortgage industry 
the jump-start it so desperately needs.
  My Republican colleagues like to point to the fact that since the 
program has only spent $50 million, it must be ineffective. I find it 
interesting that a Republican argument against a program is that it 
hasn't cost the government enough. So much for fiscal austerity. In 
fact, the FHA Refinance Program was specifically designed to be cost-
effective for the government. Its allocated funds only cover 
incremental credit and incentive costs, and will not be spent unless a 
borrower defaults under the program. Since no borrowers have defaulted, 
no money has been spent on loans.
  Let us not forget how hasty this bill is--the FHA Refinance Program 
has only been available since September. It is no surprise that it 
takes time for such complex programs to work effectively and prudently. 
Lenders must set up an operational infrastructure to utilize this 
option, and a great deal of coordination is required throughout the 
mortgage chain. As of February 11th, 23 FHA-approved lenders are 
participating in the program, including Wells Fargo and GMAC/Ally, 
which intend to deliver several thousand loans. FHA also indicates that 
numerous other lenders are in the process of developing the capability 
to utilize the program by midyear.
  Not only does the Republican Leadership seek to terminate the FHA 
Refinance Program, but it also seeks to terminate the Home Affordable 
Modification Program, the Neighborhood Stabilization Program, and the 
Emergency Homeowners Loan Program. It is clear that more needs to be 
done to help struggling homeowners stay in their homes. However, 
terminating the very programs that were established to do so is not the 
solution. I encourage my colleagues on the other side of the aisle to 
come to the table and present real solutions to this epidemic. If a 
Member feels this program has not benefited enough homeowners, he or 
she should suggest a way to do so and we can go from there. Instead, 
Republicans are placing politics before people. Our Nation needs 
solutions, not denunciations.
  Mr. Chair, I strongly urge my colleagues to vote against this bill.
  Mr. VAN HOLLEN. Mr. Chair, the FHA Refinance Program proposed for 
termination in today's legislation is designed to provide distressed 
homeowners mortgage relief by using FHA loan guarantee authority to 
incentivize holders of existing single family loans to reduce the 
outstanding principal balance of their loans by at least 10% in 
conjunction with an FHA refinance when the principal balance of a 
borrower's loan is greater than the property's current value. 
Importantly, participating homeowners must be current on their existing 
loan, and all other FHA safety and soundness underwriting standards 
continue to apply. Any losses under the program are covered by funds 
already set aside by the TARP, adding no additional exposure to the 
FHA's capital reserves.
  Mr. Chair, while I am aware of--and frankly, to some extent 
sympathetic to--the criticism and frustration around the pace and scope 
of this program to date, I would also point out that it has only been 
operational since October of last year. Furthermore, as a purely 
voluntary program, its success clearly hinges on the active 
participation of our major loan servicers, two of whom--Wells Fargo and 
Ally Financial--have just recently announced their intention to let 
qualified borrowers take advantage of the program. Finally, with an 
estimated one in five homeowners currently underwater on their 
mortgages, it is clear to me that the housing crisis is not yet behind 
us.
  By providing struggling but credit-worthy homeowners with a reduced 
monthly payment and a mortgage that is more aligned with actual 
property values, the FHA Refinance Program can help prevent 
foreclosures and stabilize the housing market, which is in every 
American's long term interest.
  The CHAIR. All time for general debate has expired.
  Pursuant to the rule, the amendment in the nature of a substitute 
printed in the bill shall be considered as an original bill for the 
purpose of amendment under the 5-minute rule.
  No amendment to the committee amendment in the nature of a substitute 
is in order except those received for printing in the portion of the 
Congressional Record designated for that purpose in a daily issue dated 
March 9, 2011, or earlier and except pro forma amendments for the 
purpose of debate. Each amendment so received may be offered only by 
the Member who causes it to be printed or a designee and shall be 
considered read if printed.
  The Clerk will designate section 1.
  The text of section 1 is as follows:

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``FHA Refinance Program 
     Termination Act''.


                Amendment No. 9 Offered by Mrs. Maloney

  Mrs. MALONEY. Mr. Chairman, I have an amendment at the desk.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       After section 1, insert the following new section:

     SEC. 2. CONGRESSIONAL FINDINGS.

       The Congress finds that--
       (1) there are 35,610 underwater mortgages in Alabama;
       (2) 7,801 underwater mortgages in Alaska;
       (3) 648,387 underwater mortgages in Arizona;
       (4) 27,580 underwater mortgages in Arkansas;
       (5) 2,172,700 mortgages in California;
       (6) 221,097 underwater mortgages in Colorado;
       (7) 97,244 underwater mortgages in Connecticut;
       (8) 23,906 underwater mortgages in Delaware;
       (9) 2,029,128 underwater mortgages in Florida;
       (10) 449,971 underwater mortgages in Georgia;
       (11) 24,664 underwater mortgages in Hawaii;
       (12) 61,566 underwater mortgages in Idaho;
       (13) 431,050 underwater mortgages in Illinois;
       (14) 68,196 underwater mortgages in Indiana;
       (15) 28,976 underwater mortgages in Iowa;
       (16) 32,787 underwater mortgages in Kansas;
       (17) 24,880 underwater mortgages in Kentucky;
       (18) 298,554 underwater mortgages in Maryland;
       (19) 222,599 underwater mortgages in Massachusetts;
       (20) 519,716 underwater mortgages in Michigan;
       (21) 90,090 underwater mortgages in Minnesota;
       (22) 122,543 underwater mortgages in Missouri;
       (23) 8,650 underwater mortgages in Montana;
       (24) 21,388 underwater mortgages in Nebraska;
       (25) 390,192 underwater mortgages in Nevada;
       (26) 37,488 underwater mortgages in New Hampshire;
       (27) 286,293 underwater mortgages in New Jersey;
       (28) 29,375 underwater mortgages in New Mexico;
       (29) 129,633 underwater mortgages in New York;
       (30) 160,007 underwater mortgages in North Carolina;

[[Page H1687]]

       (31) 3,582 underwater mortgages in North Dakota;
       (32) 441,379 underwater mortgages in Ohio;
       (33) 24,411 underwater mortgages in Oklahoma;
       (34) 108,335 underwater mortgages in Oregon;
       (35) 132,805 underwater mortgages in Pennsylvania;
       (36) 45,511 underwater mortgages in Rhode Island;
       (37) 85,226 underwater mortgages in South Carolina;
       (38) 133,956 underwater mortgages in Tennessee;
       (39) 367,954 underwater mortgages in Texas;
       (40) 98,093 underwater mortgages in Utah;
       (41) 276,910 underwater mortgages in Virginia;
       (42) 209,577 underwater mortgages in Washington;
       (43) 15,240 underwater mortgages in Washington D.C.;
       (44) and 81,267 underwater mortgages in Wisconsin.
       (45) the aggregate number of mortgages estimated to be 
     underwater in such States is 10,780,236; and
       (46) by voting to terminate the FHA Refinance Program under 
     this Act without a suggested replacement, the Congress is 
     voting to terminate a program that may have helped these 
     underwater borrowers.

  Mr. BACHUS. Mr. Chairman, I reserve a point of order against the 
amendment.
  The CHAIR. A point of order is reserved.
  The gentlewoman from New York is recognized for 5 minutes in support 
of her amendment.
  Mrs. MALONEY. Mr. Chairman, my amendment has the purpose of making 
very clear what we're doing today to the American people. This 
amendment makes clear that we are ending a program that has the 
potential to help hundreds of thousands of underwater borrowers.
  H.R. 830, the FHA Refinance Program Termination Act, ignores the 
underwater borrowers of this country and does nothing to help families 
save their homes.
  Very simply, the bill ends a program that has the potential to help 
hundreds of thousands of people whose mortgages now exceed the value of 
their home, and also help the communities and help the overall economy.
  The majority crafted a so-called ``open rule'' in such a way that 
it's nearly impossible to offer any substantive amendments--a number 
were voted down on a party line in the committee debates--in response 
to this reality.
  In an effort to highlight the true nature of this harmful bill, my 
amendment identifies the numbers in each State of the hundreds of 
thousands of underwater borrowers across the country and makes clear 
that the Republican majority has no solution to the problem, nor do 
they have any desire to find one.
  Americans must be made aware of the intention of this majority. This 
program allows borrowers to write down at least 10 percent to reduce 
the debt burden. They are all paying. They are in financial difficulty. 
Banks then can get an insured FHA guarantee and move forward and people 
can keep living in their homes and can keep participating in the 
economy.
  Because of this vote today, if the majority wins, homeowners across 
the country may not have the opportunity to take advantage of the 
program that has just begun, and which should be made, in my opinion, 
available to them.
  Now what this does, it goes down all of the impacts across the 
country. It shows that in my home State of New York there are over 
129,000 mortgages underwater that would not be able to apply for this 
program to allow people to stay in their homes. In Chairman Bachus' 
State, there are over 35,000 mortgages underwater. In Florida, there 
are more than 2 million mortgages underwater, and they have no 
alternative of any way to help these people. And these numbers are from 
an independent company's study.
  If you go to California, our largest State, over 2 million homes are 
underwater. Nevada, 390,000 individuals are facing the loss of their 
homes. In Arizona, there are over 648,000 families that are underwater. 
Their home is not worth what they're paying for it, what the mortgage 
is.
  So this program is one that I think is thoughtful, one that has only 
$50 million as sort of a line of credit that will be pulled down if 
there are defaults. But the banks participating have very strict 
standards, as does the FHA. It has to be their primary residence. They 
have to provide full documentation. No more of these ``no doc'' loans. 
They must be current on the mortgage. They must have a job. They have 
to have many, many levels that they have to meet before they get the 
loan. But at least it's a lifeline to these 12 million families whose 
homes are underwater.
  With declining home values, borrowers are caught in mortgages they no 
longer can afford because their rates have reset or because their 
interest-only payments have not allowed them to grow any equity in 
their homes. They are making their payments, but just barely. And so 
this one is there to help them. And it simply adds findings to the bill 
with the number of underwater mortgages in each State that we've 
secured the data for so that it becomes very clear to the American 
people how many homeowners in each State we are not helping if we do 
what the majority wants, to terminate this program.
  And I might say this program is one of four that the Obama 
administration has put forward to help homeowners stay in their homes 
and to help stabilize our economy, which is still fragile and is still 
recovering. Housing is 25 percent of our economy, according to many 
economists. So the strength of housing is important to the overall 
health of our Nation's economic future.
  So I urge my colleagues to support the amendment, to make it clear by 
the vote on this bill how many Americans across this country will not 
be helped if the majority gets their passage of their bill that would 
terminate a program that has the potential of helping literally 
millions in America.
  I urge a ``yes'' vote on my amendment.

                              {time}  1340


                             Point of Order

  Mr. BACHUS. Mr. Chairman, I make a point of order against the 
amendment because in my opinion it violates clause 7 of rule XVI which 
requires that an amendment be germane to the matter it's amending.
  It's not germane to the bill because it's outside the scope of the 
bill and fails to draw the nexus to the bill.
  The CHAIR. Does any other Member wish to be heard on the point of 
order?
  The Chair recognizes the gentlewoman from New York.
  Mrs. MALONEY. The amendment is germane, Mr. Chairman.
  This program has the potential to help underwater mortgages across 
our great country, which is germane to the bill we're debating today, 
because the bill terminates the potential of this help. You have no 
findings in this bill that you're rushing to the floor.
  It is germane to talk about the hundreds of thousands of homeowners 
that are out there that possibly could lose their home because this 
program is being terminated. This is germane, in my opinion, to the 
underlying bill.
  The CHAIR. Does any other Member wish to be heard on the point of 
order?
  The Chair recognizes the gentleman from Alabama.
  Mr. BACHUS. Mr. Chair, she lists the number of mortgages that are 
underwater and says that this program may help them. Obviously, there 
are many of those, the buyers are behind on their payments and they 
wouldn't qualify for help. Just the number 44 ought to tell you that 
when you list 12 million homeowners and then say that the termination 
of this program would have helped is quite a stretch. There are certain 
other qualifications under this legislation that are not met by simply 
being underwater.
  The CHAIR. Does the gentlewoman from New York wish to be heard on the 
point of order?
  Mrs. MALONEY. Yes, I do.
  As a point of information, there are very strict criteria from the 
FHA and from the individual banks that are voluntarily participating, 
and one of those criteria is that you must be current on your payments. 
You must be current. What the gentleman said was inaccurate, that they 
could be behind on their payments or not making their payments. They're 
having difficulty making it because their home value is not equal to 
what the mortgage is. And so it's difficult. But they must all be 
current on their payments.
  The CHAIR. The gentlewoman needs to confine her remarks to the point 
of order.

[[Page H1688]]

  Ms. JACKSON LEE of Texas. Mr. Chairman, I would like to be heard on 
the point of order.
  The CHAIR. The Chair recognizes the gentlewoman from Texas.
  Ms. JACKSON LEE of Texas. First of all, the gentleman from Alabama 
was arguing the merits of the legislation. These are findings that 
pertain to the results that would occur from the language in the bill.
  The bill is eliminating the existing funds or leftover funds for FHA 
refinance. The amendment clearly lays out the impacted persons 
connected to the elimination. Therefore, this is germane because it 
relates to the language of the amendment and the intent of the 
amendment.
  Twelve million people left behind, thousands of homeowners in 
different States, and the fact that there is no other solution to these 
homeowners except FHA refinance, it is a germane amendment. The 
findings are simply laying out the impact. We do that in all of our 
bills to put findings on what the impact of legislation would be.
  I ask the Chairman to consider the gentlelady's amendment being 
germane. The findings are germane, and it is doing simply that of 
listing the elements of the impact of this legislation.
  I ask for a waiver of the point of order.
  The CHAIR. The Chair is prepared to rule on the point of order.
  The gentleman from Alabama makes a point of order that the amendment 
offered by the gentlewoman from New York is not germane.
  The bill addresses repeal of a Federal Housing Administration program 
that provides for refinancing of a specified set of mortgages.
  One of the fundamental principles of germaneness is that the 
amendment must relate to the subject matter of the underlying bill. The 
bill is confined to a specific type of refinancing program. The 
amendment seeks, in part, to address mortgages on broader bases, beyond 
the ambit of the bill.
  The amendment is therefore not germane. The point of order is 
sustained.
  Mrs. MALONEY. I move to strike the last word.
  The CHAIR. The gentlewoman from New York is recognized for 5 minutes.
  Mrs. MALONEY. I'm distressed with this ruling because I think it is 
germane that people will lose their homes, that they are eliminating a 
program that is just starting that is thoughtful, that would give FHA 
financing and guarantees to help people stay in their homes, and that 
people in Nevada, over 390,000, could be affected by this; California, 
over 2 million people's homes are underwater; in Florida, over 2 
million homes are underwater; Arizona, 648.
  And in my own State, over 129,000 people will not have the access to 
this program that allows them to adjust their mortgages so that they 
reflect the true value of their homes, make their payments on that 
value so that they can move forward and be part of the community, keep 
these homes from becoming blight and emptied in an area.
  We all have stories in our districts and across the Nation where 
people cannot make their mortgage payments because they have lost 
values in their home. They are deserting them. They are leaving them. 
In some States, they are literally bulldozing the homes underground 
because no one can afford to live in them. This is an answer to some of 
the challenges.
  And my colleagues on the other side of the aisle talk about the cost. 
Well, I would say that the cost--not only to the individual homeowner, 
but to the overall economy--will be greater by terminating the four 
efforts, the four antiforeclosure efforts from the Obama administration 
to help with the housing crisis.
  And we know that the subprime crisis was a scandal. Many people were 
not--got into homes they couldn't afford under misinformation.
  We have helped other areas of our economy. We certainly should help 
the homeowners, the working Americans to help them through this 
economic crisis, too.
  And we have to remember that although we are digging our way out of 
this Great Recession, the recovery has been slow. We are still in a 
fragile recovery. The economists testified before the Financial 
Services Committee that housing was 25 percent of our economy.
  So, helping people stay in their homes, I would say that our overall 
economy has a stake in it.
  Now, some people said, well, the banks will run in and do this. Banks 
are not going to do this unless they think that the loan is going to be 
paid and they're not going to be hurt with it. And the standards from 
FHA are very high. You have to be current. You have to have a job. You 
have to live in your home. You have to have a proven track record. You 
have to have good credit before you can be approved. So that is why 
only 50 million is the line of credit that will be drawn down if there 
are foreclosures.
  Hopefully the economy improves, people keep their jobs. Hopefully the 
banks do a good job and do not hand out loans unless people can 
actually repay them. And this will be a tool to move forward not only 
to help people, but to help the overall economy.
  Now, what I find very troubling about this is that my friends on the 
other side of the aisle want to terminate four antiforeclosure 
programs, but they have no alternative. It's sort of like their 
approach to jobs. They have not come forward with any program to help 
create jobs. They have not come forward with any program to help people 
stay in their homes. It's part of the ``so be it'' attitude. You're on 
your own. We're not going to help you.
  But this is a program that helps people help themselves adjust to the 
reality of what their homes are actually worth. And I think that it's 
important that this information of how many people, the 12 million 
people and where they live in America, is important information that 
should be part of this bill.
  And that's why I am now respectfully requesting unanimous consent to 
place into the Record the listing of where these 12 million people live 
so people will know these are the people we are saying ``no,'' ``so be 
it,'' ``we're not going to be there to help you.''
  And let me tell you, my follow colleagues. I would be cautious about 
voting for this, because you're voting against your economy. You're 
voting against your State. You are voting against your own colleagues, 
your own residents and neighbors who may need this. We know the trouble 
that's in this economy. Practically every family in America has some 
relative who's lost a job or is unemployed. So this is some way to help 
with this economic recovery. It is thoughtful. It is a good program.
  And I urge my colleagues to vote against the ``so be it'' bill the 
Republicans have before us today and to really work with, in a 
bipartisan way, the Obama administration to help working Americans, 
struggling Americans stay in their home.

                              {time}  1350

  It's the least that we can do as a caring Nation, absolutely the 
least we can do as a caring Nation. So I urge my colleagues, and I 
would be very cautious in your vote, because I believe your 
constituents are going to remember this vote if this program is 
terminated and their lifeline, their ability to stay in their homes, is 
terminated because of your vote today.

                                                                                                   TABLE 1: NEGATIVE EQUITY BY STATE*
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Properties With a Mortgage Outstanding                                                                                           $ Outstanding
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  Negative Equity    Near** Negative   Negative Equity   Near** Negative                             Mortgage Debt                             Loan-to-
                            State                                 Mortgages          Mortgages       Equity Mortgages       Share          Equity Share    Total Property Value       Outstanding      Net Homeowner Equity  Value Ratio
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.....................................................            340,665             35,610             19,188           10.5%                5.6%        65,482,055,550        43,970,078,384        21,511,977,166          67%
Alaska......................................................             87,286              7,801              5,160            8.9                  5.9        23,773,756,773        15,920,518,570         7,853,238,203           67
Arizona.....................................................          1,333,398            648,387             63,304           48.6                  4.7       263,693,025,194       243,760,655,061        19,932,370,133           92
Arkansas....................................................            238,011             27,580             14,360           11.6                  6.0        37,303,484,103        27,450,225,612         9,853,258,491           74
California..................................................          6,870,914          2,172,700            299,067           31.6                  4.4     2,864,273,476,858     2,008,766,937,342       855,506,539,516           70
Colorado....................................................          1,125,434            221,097             91,187           19.6                  8.1       301,289,945,528       217,120,459,818        84,169,485,710           72

[[Page H1689]]

 
Connecticut.................................................            816,560             97,244             29,957           11.9                  3.7       294,814,146,661       171,517,175,208       123,296,971,453           58
Delaware....................................................            179,322             23,906              8,937           13.3                  5.0        47,059,588,802        31,949,546,484        15,110,042,318           68
Florida.....................................................          4,459,951          2,029,128            182,323           45.5                  4.1       853,646,775,841       757,212,788,734        96,433,987,107           89
Georgia.....................................................          1,605,825            449,971            120,854           28.0                  7.5       319,934,838,691       255,319,644,351        64,615,194,340           80
Hawaii......................................................            229,600             24,664              8,280           10.7                  3.6       117,791,198,842        65,339,432,694        52,451,766,148           55
Idaho.......................................................            243,589             61,566             12,927           25.3                  5.3        48,204,517,879        35,737,930,659        12,466,587,220           74
Illinois....................................................          2,227,602            431,050            108,239           19.4                  4.9       534,999,520,161       377,625,407,977       157,374,112,184           71
Indiana.....................................................            603,484             68,196             28,936           11.3                  4.8        91,672,823,585        64,195,877,062        27,476,946,523           70
Iowa........................................................            334,689             28,976             14,366            8.7                  4.3        51,019,867,858        34,150,823,254        16,869,044,604           67
Kansas......................................................            295,839             32,787             16,284           11.1                  5.5        53,431,665,604        37,737,206,158        15,694,459,446           71
Kentucky....................................................            279,187             24,880             14,092            8.9                  5.0        47,549,597,328        32,335,774,221        15,213,823,107           68
Louisiana...................................................                 NA                 NA                 NA           NA                     NA                    NA                    NA                    NA           NA
Maine.......................................................                 NA                 NA                 NA           NA                     NA                    NA                    NA                    NA           NA
Maryland....................................................          1,358,672            298,554             67,580           22.0                  5.0       433,409,001,574       298,109,259,531       135,299,742,043           69
Massachusetts...............................................          1,494,099            222,599             51,704           14.9                  3.5       546,053,917,907       329,062,834,394       216,991,083,513           60
Michigan....................................................          1,381,232            519,716             76,403           37.6                  5.5       198,169,103,537       169,373,043,369        28,796,060,168           85
Minnesota...................................................            554,535             90,090             27,608           16.2                  5.0       124,901,317,584        81,787,965,185        43,113,352,399           65
Mississippi.................................................                 NA                 NA                 NA           NA                     NA                    NA                    NA                    NA           NA
Missouri....................................................            779,328            122,543             44,131           15.7                  5.7       137,735,363,892        98,445,466,785        39,289,897,107           71
Montana.....................................................            112,444              8,650              3,939            7.7                  3.5        28,244,797,730        16,968,913,610        11,275,884,120           60
Nebraska....................................................            221,686             21,388             13,072            9.6                  5.9        35,462,342,354        25,920,022,837         9,542,319,517           73
Nevada......................................................            586,515            390,192             23,037           66.5                  3.9       103,720,996,430       123,072,698,809       -19,351,702,379          119
New Hampshire...............................................            211,489             37,488             11,351           17.7                  5.4        51,974,243,397        35,837,313,271        16,136,930,126           69
New Jersey..................................................          1,882,603            286,293             78,230           15.2                  4.2       678,172,085,088       415,710,918,011       262,461,167,077           61
New Mexico..................................................            234,004             29,375             10,847           12.6                  4.6        55,009,963,072        36,551,762,344        18,458,200,728           66
New York....................................................          1,838,917            129,633             40,013            7.0                  2.2       835,125,621,032       415,765,632,474       419,359,988,558           50
North Carolina..............................................          1,521,406            160,007            101,945           10.5                  6.7       317,535,658,347       223,145,876,102        94,389,782,245           70
North Dakota................................................             48,415              3,582              1,478            7.4                  3.1         8,291,290,055         4,967,349,459         3,323,940,596           60
Ohio........................................................          2,204,754            441,379            137,601           20.0                  6.2       324,006,229,515       242,010,058,915        81,996,170,600           75
Oklahoma....................................................            408,155             24,411             14,962            6.0                  3.7        60,039,397,170        42,451,471,333        17,587,925,837           71
Oregon......................................................            693,304            108,335             38,849           15.6                  5.6       179,130,635,748       122,988,902,147        56,141,733,601           69
Pennsylvania................................................          1,794,563            132,805             58,312            7.4                  3.2       401,020,775,572       248,939,681,403       152,081,094,169           62
Rhode Island................................................            227,897             45,511              8,120           20.0                  3.6        64,414,910,589        39,693,719,643        24,721,190,946           62
South Carolina..............................................            598,223             85,226             37,091           14.2                  6.2       131,254,482,178        92,349,858,129        38,904,624,049           70
South Dakota................................................                 NA                 NA                 NA           NA                     NA                    NA                    NA                    NA           NA
Tennessee...................................................            962,894            133,956             67,386           13.9                  7.0       166,572,683,790       118,119,771,078        48,452,912,712           71
Texas.......................................................          3,286,505            367,954            194,944           11.2                  5.9       602,239,776,419       418,772,404,728       183,467,371,691           70
Utah........................................................            472,867             98,093             30,339           20.7                  6.4       114,775,697,922        84,499,611,037        30,276,086,885           74
Vermont.....................................................                 NA                 NA                 NA           NA                     NA                    NA                    NA                    NA           NA
Virginia....................................................          1,252,705            276,910             73,763           22.1                  5.9       419,006,811,369       295,429,338,477       123,577,472,892           71
Washington..................................................          1,407,416            209,577             75,920           14.9                  5.4       441,789,933,181       292,406,352,738       149,383,580,443           66
Washington, DC..............................................            100,340             15,240              4,513           15.2                  4.5        49,085,895,573        28,782,522,751        20,303,372,822           59
West Virginia...............................................                 NA                 NA                 NA           NA                     NA                    NA                    NA                    NA           NA
Wisconsin...................................................            619,792             81,267             30,026           13.1                  4.8       120,246,415,775        80,769,544,053        39,476,871,722           67
Wyoming.....................................................                 NA                 NA                 NA           NA                     NA                    NA                    NA                    NA           NA
                                                             ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Nation..................................................         47,871,838         10,780,236          2,376,159           22.5                  5.0    12,711,358,863,378     8,850,515,659,256     3,860,843,204,122          70
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* This data only includes properties with a mortgage. Non-mortgaged properties are by definition not included.
** Defined as properties within 5% of being in a negative equity position.
Source: CoreLogic. The data provided is for use only by the primary recipient or the primary recipient's publication. This data may not be re-sold, republished or licensed to any other source, including publications and sources
  owned by the primary recipient's parent company without prior written permission from CoreLogic. Any CoreLogic data used for publication or broadcast, in whole or in part, must be sourced as coming from CoreLogic, a real estate
  data and analytics company. For questions, analysis or interpretation of the data contact Lori Guyton at [email protected] or Bill Campbell at [email protected]. Data provided may not be modified without the prior written
  permission of CoreLogic. Do not use the data in any unlawful manner. This data is compiled from public records, contributory databases and proprietary analytics, and its accuracy is dependent upon these sources.


  Ms. JACKSON LEE of Texas. Mr. Chairman, I move to strike the last 
word.
  The CHAIR. The gentlewoman from Texas is recognized for 5 minutes.
  Ms. JACKSON LEE of Texas. I am very sorry that Congresswoman 
Maloney's amendment was subject to a point of order. I would like to 
simply add that you need to put faces on what this legislation is 
doing. It is a simple act. It guts and eliminates all remaining 
funding. It does say that if you are in the midst of the program you 
might continue.
  But everyone knows how solid FHA is. Whenever you hear FHA, you know 
that there is a framework that really provides for protection for the 
Federal Government and a fiscally responsible program that provides the 
Federal Government with protection for those who are able to utilize 
it.
  But even traveling through airports, Mr. Chairman, I had a man with a 
family who indicated that in the midst of the holiday season, even 
though he had been told by the banking institution that his mortgage 
was intact, they would allow him to continue to pay, he was keeping up 
but having difficulty looking for modification, a few days into the new 
year, January 6, he was foreclosed on, and a few days later, or at 
least on that day foreclosed with a sign or a notice on his door, 
``Vacate in 3 days.'' These are the faces of individuals who probably 
would have fared better under FHA.
  At the same time, a law enforcement, a police officer came to me and 
said the very same thing, naming an institution that I had never heard 
of, had no national standing, some fly-by-night. Here is a law 
enforcement officer, a local police officer putting his life on the 
line every day, and he needed to sell his home. He had managed to find 
a buyer. He had communicated that to the bank. But lo and behold, the 
lowlife thing to do was what this financial institution did. And I 
would call it not a bank, but probably a mortgage entity. They took the 
house right from underneath a man that goes out every day and projects 
himself into the community and could lay his life on the line.
  I am against H.R. 830 and H.R. 836. It doesn't make sense when we've 
got hundreds of thousands of individuals who are in need of this 
program. I will venture to say that if a program needs fixing, have we 
ever heard of fix it, don't end it? Mend it, don't end it? Of course it 
is always important to do due diligence and have oversight over these 
programs. But I would think that the Financial Services Committee, 
under our past chairman and now the ranking member, working with the 
chairman now, could come up with the genius to make FHA work better if 
that is the case.
  But the nonsensical plan of eliminating it, not helping the 
underwater mortgagees, the individuals who have these mortgages, with 
homes that are distressed, with mortgages that are worth more than the 
homes--we know there are many communities like this, and my colleague 
mentioned some, but let me cite three States again because it's so 
enormous, and we have heard so much from them: Florida, 2 million; 
California, 2 million; Nevada, 390,000. They are still in distress.
  Everyone knows that the housing market has a lot to do with this 
economy. And even without the help of my good friends on the other side 
of the aisle, we still saw the unemployment go down and 192,000 jobs 
created. But I can tell you that this does nothing to create jobs. It 
simply puts Americans out on the street. It devastates families. And 
who knows, with the lack of sales of homes and remodification or 
modification of these, it puts people out of work, not in work.
  So I argue vigorously, a little too late on the gentlelady's 
amendment, but I want to thank her for her astuteness, carefully 
defining what impact this bill would have. And it's unfortunate that 
the good work of FHA that requires documentation, a current job, a 
decent salary, all that is needed is

[[Page H1690]]

now thrown to the wolves with no other plan. So we go home, and 
constituents will ask us about modification or the viability of FHA, 
which has been in place for a long period of time. All we have to do is 
give them our empty hands and our blank face, saying obviously greater 
minds than you, who knew this was a good program, decided to eliminate 
it with no substitute in place.
  So Mr. Chairman, let me conclude by simply saying to the hundreds of 
thousands of borrowers, have faith, because this is only the first 
step. We know this is wrongheaded, the wrong direction. Thank goodness 
for the Founding Fathers that gave us the House and the Senate and a 
President. I can be assured that this legislation, I hope, is destined 
for a route of no return.


                       Announcement by the Chair

  The CHAIR. The Chair would remind the gentlewoman to direct her 
comments to the Chair, and not the viewing public.
  The Clerk will designate section 2.
  The text of section 2 is as follows:

     SEC. 2. RESCISSION OF FUNDING FOR FHA REFINANCE PROGRAM.

       Effective on the date of the enactment of this Act, there 
     are rescinded and permanently canceled all unexpended 
     balances remaining available as of such date of enactment of 
     the amounts made available under title I of the Emergency 
     Economic Stabilization Act (Public Law 110-343; 12 U.S.C. 
     5211 et seq.) that have been allocated for use under the FHA 
     Refinance Program (pursuant to Mortgagee Letter 2010-23 of 
     the Secretary of Housing and Urban Development) of the Making 
     Home Affordable initiative of the Secretary of the Treasury.


              Amendment No. 11 Offered by Mr. Fitzpatrick

  Mr. FITZPATRICK. Mr. Chairman, I have an amendment at the desk made 
in order under the rule.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 5, line 12, after the period insert the following: 
     ``All such unexpended balances so rescinded and permanently 
     canceled shall be retained in the General Fund of the 
     Treasury for reducing the debt of the Federal Government.''.

  The CHAIR. The gentleman from Pennsylvania is recognized for 5 
minutes in support of his amendment.
  Mr. FITZPATRICK. Mr. Chairman, I want to thank my colleague from 
Illinois (Mr. Dold) for introducing this legislation to end a failed 
Federal program, the FHA Refinance Program. This amendment ensures that 
the savings realized from ending this program go directly to debt 
reduction.
  Last month, Mr. Chairman, this Chamber began a process of examining 
the Federal budget line by line, asking tough questions and making 
tough decisions on Federal spending. While our work was substantial, it 
is also continuing. In order to encourage economic growth and job 
creation, the Federal debt is and must remain public enemy number one. 
Over the past 2 years, Federal discretionary spending has increased by 
24 percent. The rate of growth is simply unsustainable.
  Despite the record pace of new spending over the last 2 years, that 
spending continues today. Just this week, Mr. Chairman, we learned that 
the Federal deficit for the month of February 2011 was the highest 
ever, and exceeded the deficit for the entire fiscal year 2007, $233 
billion, Mr. Chairman, the biggest monthly deficit in the history of 
our country.
  Over the past decade, we have seen the excesses and unsustainable 
growth in sectors of our economy that can have disastrous effects 
across the entire economy. Unless we take dramatic action now, the tax 
burden placed on small businesses and families in my own Bucks County 
and across the Nation will outpace our ability to pay, killing jobs and 
straining family budgets.
  Just as troubling is the fact that the money our government is using 
to feed today's spending is being borrowed from future generations, 
much of it borrowed from foreign Nations. The sheer amount of cash owed 
to foreign powers led the chairman of the Joint Chiefs of Staff, 
Admiral Michael Mullen, last year to declare the deficit as the number 
one security threat facing our Nation. Reduce the debt.
  I ask my colleagues to support the amendment, support the underlying 
bill.
  I yield back the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Chairman, I move to strike the last 
word.
  The CHAIR. The gentleman from Massachusetts is recognized for 5 
minutes.
  Mr. FRANK of Massachusetts. First, I would repeat that I am glad to 
hear the support for Admiral Mullen--earlier we heard of Secretary 
Gates--in their warning about the deficit. I just wish that all of 
those who were accepting their warning on the deficit would refrain 
from forcing money on them that they don't want. We have people citing 
the military leadership and then voting for weapons systems, swelling 
an already swollen military budget, that they don't want.
  As to this amendment, I am tempted to come to the defense of the 
drafters of the bill, because if you read the bill, the bill purports 
to do what the amendment purports to do. Apparently the author of the 
amendment didn't think the bill did a good enough job, or somebody 
thought the author of the amendment, being a nice fellow, ought to get 
in on the credit. So this is an amendment that is either editorial 
refinement or political redundancy. In either case, it does not have 
much effect; so I urge the Members to adopt it.
  Mrs. MALONEY. Madam Chairman, I move to strike the last word.
  The Acting CHAIR (Mrs. Miller of Michigan). The gentlewoman from New 
York is recognized for 5 minutes.
  Mrs. MALONEY. I would just like to point out to Congressman 
Fitzpatrick from the great State of Pennsylvania that there are over 
132,000 homes that are underwater now that could benefit from this 
program, and urge my colleagues to support the program.
  The Acting CHAIR. The question is on the amendment offered by the 
gentleman from Pennsylvania (Mr. Fitzpatrick).
  The amendment was agreed to.

                              {time}  1400

  The Acting CHAIR. The Clerk will designate section 3.
  The text of section 3 is as follows:

     SEC. 3. TERMINATION OF FHA REFINANCE PROGRAM.

       (a) Termination of Mortgagee Letter.--The Mortgagee Letter 
     referred to in section 2 shall be void and have no effect and 
     the Secretary of Housing and Urban Development may not issue 
     any regulation, order, notice, or mortgagee letter based on 
     or substantially similar to such Mortgagee Letter.
       (b) Treatment of Remaining Funds.--Notwithstanding 
     subsection (a) of this section, any amounts made available 
     for use under the Program referred to in section 2 of this 
     Act and expended before the date of the enactment of this Act 
     shall continue to be governed by the Mortgagee Letter 
     specified in subsection (a) of this section, and any other 
     provisions of law, regulations, orders, and notices, 
     applicable to such amounts, as in effect immediately before 
     such date of enactment.
       (c) Termination.--After the enactment of this Act, the 
     Secretary of Housing and Urban Development may not newly 
     insure any mortgage under the FHA Refinance Program referred 
     to in section 2 of this Act except pursuant to a commitment 
     to insure made before such enactment, and upon the completion 
     of all activities with respect to such commitments under the 
     provisions of law, regulations, orders, notices, and 
     mortgagee letters referred to in subsection (b) of this 
     section, the Secretary of Housing and Urban Development shall 
     terminate the FHA Refinance Program referred to in section 2.
       (d) Study of Use of Program by Members of the Armed Forces, 
     Veterans, and Gold Star Recipients.--
       (1) Study.--The Secretary of Housing and Urban Development 
     shall conduct a study to determine the extent of usage of the 
     FHA Refinance Program referred to in section 2 by, and the 
     impact of such program on, covered homeowners.
       (2) Report.--Not later than the expiration of the 90-day 
     period beginning on the date of the enactment of this Act, 
     the Secretary shall submit to the Congress a report setting 
     forth the results of the study under paragraph (1) and 
     identifying best practices, with respect to covered 
     homeowners, that could be applied to the FHA Refinance 
     Program.
       (3) Covered homeowner.--For purposes of this subsection, 
     the term ``covered homeowner'' means a homeowner who is--
       (A) a member of the Armed Forces of the United States on 
     active duty or the spouse or parent of such a member;
       (B) a veteran, as such term is defined in section 101 of 
     title 38, United States Code; or
       (C) eligible to receive a Gold Star lapel pin under section 
     1126 of title 10, United States Code, as a widow, parent, or 
     next of kin of a member of the Armed Forces person who died 
     in a manner described in subsection (a) of such section.


                  Amendment No. 3 Offered by Mr. Lynch

  Mr. LYNCH. Madam Chair, I have an amendment at the desk.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:


[[Page H1691]]


       Page 5, strike lines 14 through 19.
       Page 5, line 20, strike ``(b)'' and insert ``(a)''.
       Page 5, lines 20 and 21, strike ``Notwithstanding 
     subsection (a) of this section, any'' and insert ``Any''.
       Page 5, line 25, strike ``specified in subsection (a) of 
     this section'' and insert ``specified in section 2''.
       Page 6, line 3, strike ``(c)'' and insert ``(b)''.
       Page 6, lines 10 and 11, strike ``subsection (b)'' and 
     insert ``subsection (a)''.
       Page 6, line 14, strike ``(d)'' and insert ``(c)''.

  The Acting CHAIR. The gentleman from Massachusetts is recognized for 
5 minutes.
  Mr. LYNCH. Thank you, Madam Chair.
  I want to, first of all, clarify what this bill is intending to do. 
The goal of the bill by my colleagues is to end the FHA Refinance 
Program. While I do support voluntary workouts--and I think that's the 
best way to approach the problem--I want to point out that the bill as 
it is written does not allow that to be accomplished by the FHA. Not 
only does the bill eliminate the targeted programs that have been 
identified, but it also, in its breadth, eliminates the possibility of 
any voluntary agreements outside this program. That's what my amendment 
would seek to address.
  I do know that the CQ House Action Report indicated that I was 
amending section 2. However, I want to make sure that they understand 
that the language my amendment addresses is section 3: Termination of 
FHA Refinance Program.
  Basically, to understand it, what this amendment would do is: The FHA 
facilitates mortgage workouts and other actions under its purview 
through mortgagee letters. These are written guidances to mortgagees, 
lenders, HUD-approved counselors and appraisers--essentially, anyone 
who is actively providing services on behalf of or with the permission 
of HUD. Similar guidance is done for other HUD programs.
  Administrative law dictates that the agencies can issue 
administrative guidance that interprets statutes and regulations that 
we adopt, and it requires public notice and comment, and must be based 
on an authorizing statute. The FHA's guidance for lenders comes in the 
form of handbooks and these mortgagee letters, which essentially 
provide periodic advice and clarification while we are trying to do 
these voluntary agreements. Last year, the FHA issued 43 separate 
versions of this mortgagee letter. So far this year, it has issued 
about 14.
  My amendment would strike the text that I believe and that the FHA 
believes would interfere with the rest of the work that the FHA is 
doing in its operation. These are not areas targeted by the bill by the 
gentlewoman from Illinois. The bill provides that anything 
substantially similar to what they have prohibited in section 2, which 
is a mortgagee letter titled 2010-23, would also be prohibited.
  That creates a problem. That stops the FHA from doing a lot of the 
other work that both sides agree needs to be done. We are talking about 
voluntary agreements where the bank and the servicer and the homeowner 
agree. Basically, that would be stopped by this legislation. So I'm not 
trying to undo the targeted work that you're trying to do. I'm just 
trying to let the FHA do its job in general.
  I also want to remind the gentlewoman from Illinois that the FHA, by 
itself, cannot recreate the finance program through a mortgagee letter. 
It can only do so if it is legislation that is clearly underlying its 
action. All the mortgagee letters must go through departmental 
clearance and must be viewed by OMB before they become official 
guidance. So I am asking that this amendment be accepted to clarify the 
action of the bill, itself.
  I yield back the balance of my time.
  Mrs. BIGGERT. Madam Chairman, I rise in opposition to the amendment.
  The Acting CHAIR. The gentlewoman from Illinois is recognized for 5 
minutes.
  Mrs. BIGGERT. This amendment came up in committee and failed during 
our committee markup by a vote of 33-22. The amendment removes all 
references to the mortgagee letter issued by HUD concerning the FHA 
Refinance Program, and I think that this announcement was the defining 
document for the program and provided guidance to lenders on the FHA 
Refinance Program.
  I think our concern is that the amendment leaves the door open for 
the Treasury and for HUD to at a later date create another 
substantially similar program to the FHA Refinance Program, again, 
without the express consent of Congress.
  As the sponsor of the bill mentioned, this program was never 
authorized by Congress. The funding came from the TARP moneys that were 
set aside for the HAMP program, and the mortgagee letter was 
effectively the authorizing document for the program. If this were to 
be in, there would be no nullification of the program; it wouldn't be 
terminated. This mortgagee letter speaks directly to this program, and 
I don't think that it affects the other parts of the FHA. It really 
just voids the letter, in doing so, to end the program.
  We don't need to further burden the FHA with this program. An FHA 
program right now is currently operating below its congressionally 
mandated 2 percent capital reserve ratio, and this program has the 
potential to further expose taxpayers to FHA losses. Even the 
administration has expressed concerns over the new program loan 
performance. During testimony delivered to the Financial Services 
Committee, the FHA Commissioner testified ``these loans may perform 
worse than refinanced loans that were not previously under water.''
  This is another example of the administration's using TARP dollars in 
questionable ways. I think that the program is similar in scope to the 
failed HOPE for Homeowners program established under FHA in 2008, and 
even that program has helped fewer than 200 borrowers since its 
inception.
  So we are concerned that the method of funding for this program 
exposes taxpayers to higher levels of TARP money. I don't think that it 
affects FHA other than that this program is terminated. This program, 
along with its companion programs and the failed HAMP program, should 
be terminated, and all unobligated funds associated with the program 
should instead be used to pay down the Nation's unsustainable debt. I 
would oppose the amendment.
  I yield back the balance of my time.
  Mr. FRANK of Massachusetts. Madam Chair, I move to strike the last 
word.
  The Acting CHAIR. The gentleman is recognized for 5 minutes.
  Mr. FRANK of Massachusetts. Madam Chair, I regret the fact that my 
colleague from Massachusetts, who is a good lawyer and a careful 
student of what we do, has drafted a very specific amendment aimed at a 
particular point. He has been answered with a lot of general rhetoric, 
and I don't think his point was understood. The gentlewoman simply 
repeated general rhetoric about the bill.
  He is not trying by the back door to reestablish this program. He has 
talked to thoughtful people, and is worried about an overreach. I think 
the only thing we're seeing now is pride of authorship by whoever 
drafted this bill for them. The gentlewoman from Illinois is, as I 
said, using a lot of general rhetoric, which is totally unresponsive to 
the very specific point my friend from Massachusetts made.
  With that, in the hope that if he says it again he might get them to 
pay attention to the specifics, I yield to my friend, the gentleman 
from Massachusetts (Mr. Lynch).
  Mr. LYNCH. Madam Chair, look, I will concede that the gentlelady from 
Illinois has raised a lot of good points. Unfortunately, none of them 
are relevant to my amendment. If you look at section 2, which is what 
you just talked about, that remains intact. That remains intact.

                          ____________________