[Congressional Record Volume 157, Number 92 (Friday, June 24, 2011)]
[Extensions of Remarks]
[Pages E1209-E1210]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      NATIONAL HOMEOWNERSHIP MONTH

                                 ______
                                 

                          HON. RUBEN HINOJOSA

                                of texas

                    in the house of representatives

                         Friday, June 24, 2011

  Mr. HINOJOSA. Mr. Speaker, I rise today in strong support of June 
2011 National Homeownership Month.
  The most current data show that of 130.7 million homes in the United 
States, 74.9 million serve as principal residences. Another 37.0 
million homes are renter-occupied, and the remaining 18.8 million are 
either for sale, for rent, or for seasonal use.
  Despite the recent economic decline, the people of the United States 
remain one of the best-housed populations in the world. Owning a home 
remains a fundamental part of the American dream and the largest 
personal investment many families will ever make. High homeownership 
rates help communities through higher property values, lower crime, and 
higher civic participation. Homeownership promotes a more even 
distribution of income and wealth, and establishes greater individual 
financial security. It improves living conditions, which can lead to a 
healthier population.
  Homeownership creates neighborhood stability since owners are more 
inclined to remain in the community for a longer period of time than 
renters. It has been proven to increase social and political 
involvement due to the concern about one's property value. 
Homeownership correlates with lower neighborhood crime. It fosters more 
responsible behavior among youths in the community, such as higher 
academic achievement and lower teen pregnancy rates, due to the 
monitoring mechanism put in place to maintain the attractiveness of a 
community. Economists have been able to establish that a correlation 
between homeownership and these positive neighborhood effects does 
exist.
  Improving homeownership opportunities requires the commitment and 
cooperation of the private, public, and nonprofit sectors, including 
the Federal Government and State and local governments. It is of the 
utmost importance that we maintain the mortgage interest deduction and 
the 30-year fixed rate mortgage as their elimination would damage the 
availability and cost of mortgage capital for millions of Americans, 
especially while the housing market recovery remains fragile. The same 
can be said of the ill-conceived downpayment portion of the ``Qualified 
Residential Mortgages'' proposal.
  As part of the financial reform legislation, we here in Congress 
designed a clear framework for improving the quality of mortgage 
lending and restoring private capital to the housing market. To 
discourage excessive risk taking, we required securitizers to retain 
five percent of the credit risk on loans packaged and sold as mortgage 
securities. However, because across-the-board risk retention would 
impose significant costs on responsible, creditworthy borrowers, we 
also created an exemption for ``Qualified Residential Mortgages,'' 
defined to include mortgages with product features and sound 
underwriting standards that have been proven to reduce default. Rather 
than creating a system of penalties to discourage bad lending and 
incentives for appropriate lending, regulators have developed a rule 
that is too narrowly drawn. Of particular concern are the provisions of 
the proposal mandating high downpayments.
  The principal barrier to homeownership is accumulating the money 
needed for downpayment and closing costs. It is estimated that it would 
take the average American family, living frugally and saving at the 
current national rate, nearly seven years to save for a 5 percent down 
payment on a $200,000 home and more than 10 years to save for 10 
percent down.
  The regulators' proposal to require a 20 percent downpayment is 
tantamount to declaring war on homeownership. Only the elite in the 
United States would be able to afford such a downpayment. The 
supermajority of residents in Hidalgo County located in my district in 
Texas would not be able to meet the downpayment requirement, thereby 
depriving them of the American Dream. Hidalgo County is the second 
poorest county in the country. 89 percent of my constituents are 
Hispanic, the poorest of the poor, and tend to operate in a cash 
society. My constituents already have difficulty meeting current 
downpayment requirements, much less an even higher, ill-conceived 20 
percent downpayment. It has been proven that once my poorest 
constituents actually own a home, they manage to make the monthly 
mortgage payments and turn a household into an actual ``home.''
  The proposed qualified residential mortgage definition harms 
creditworthy borrowers while frustrating housing recovery. It violates 
congressional intent and makes homeownership more expensive for 
millions of responsible consumers.

[[Page E1210]]

  At this time in history, given our economic and political climate, 
changes should not be made to the mortgage interest deduction, the 30 
year fixed interest mortgage, or downpayment requirements that are 
pragmatic and beneficial to our constituents and our economy, 
especially while the housing market recovery remains fragile. They 
would reduce the availability and increase the cost of mortgage capital 
for millions of Americans.
  President Obama has declared June 2011 as National Homeownership 
Month. It is my sincere hope that this Administration will do the right 
thing and leave time tested deductions, requirements, and downpayments 
alone.
  I strongly support June 2011 as declare my steadfast opposition to 
the proposed qualified residential mortgages proposal, modifications to 
the mortgage interest deduction, and changes to the 30-year fixed 
interest mortgage.

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