[Congressional Record (Bound Edition), Volume 151 (2005), Part 22]
[Senate]
[Pages 30674-30675]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         SUBMITTED RESOLUTIONS

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SENATE RESOLUTION 340--EXPRESSING THE SENSE OF THE SENATE THAT LENDERS 
 HOLDING MORTGAGES ON HOMES IN COMMUNITIES OF LOUISIANA DEVASTATED BY 
  HURRICANES KATRINA AND RITA SHOULD EXTEND CURRENT MORTGAGE PAYMENT 
     FORBEARANCE PERIODS AND NOT FORECLOSE ON PROPERTIES IN THOSE 
 COMMUNITIES UNTIL SUCH TIME THAT CONGRESS CAN CONSIDER LEGISLATION TO 
                   PROVIDE RELIEF TO THOSE HOMEOWNERS

  Ms. LANDRIEU submitted the following resolution; which was referred 
to the Committee on Banking, Housing, and Urban Affairs:

                              S. Res. 340

       Whereas the Gulf Coast of the United States has experienced 
     one of the worst hurricane seasons on record;
       Whereas Hurricane Katrina and multiple levee breaks 
     destroyed an estimated 205,330 homes in Louisiana;
       Whereas 18,752 businesses in Louisiana, 41 percent of the 
     overall number of businesses in the State, sustained 
     catastrophic damage from Hurricane Katrina and Hurricane 
     Rita;
       Whereas according to the Bureau of Economic Analysis at the 
     Department of Commerce, personal income has fallen more than 
     25 percent in Louisiana in the third quarter of 2005;
       Whereas in the time since Hurricanes Katrina and Rita, the 
     Small Business Administration has only approved 20 percent of

[[Page 30675]]

     disaster loan applications for homeowners in Louisiana and 
     has a backlog of more than 101,400 applications for this 
     assistance as of December 20, 2005;
       Whereas of the 11,644 homeowner disaster loan applications 
     that have been approved in Louisiana by the Small Business 
     Administration, only 835 have been fully disbursed;
       Whereas, in response to these circumstances, commercial 
     banks, mortgage banks, credit unions, and other mortgage 
     lenders instituted 90-day loan forbearance periods after 
     Hurricane Katrina and did not require home owners in 
     Louisiana to make mortgage payments until on or about 
     December 1, 2005;
       Whereas after the termination of the 90-day forbearance 
     period, many home and business owners have received notice 
     from their lenders that they face foreclosure unless they 
     make a lump sum balloon payment in the amount of the mortgage 
     payments previously subject to forbearance; and
       Whereas foreclosure on homes and businesses in Louisiana 
     will have a detrimental impact on the economy of the State, 
     will deprive property owners of their equity at a time when 
     they can least afford it, and will have a negative impact on 
     lenders who will be holding properties that may not be 
     readily saleable on the open market: Now, therefore, be it
       Resolved, That it is the sense of the Senate that--
       (1) Congress should consider legislation to provide relief 
     to homeowners in Louisiana whose properties were devastated 
     by Hurricanes Katrina and Rita; and
       (2) commercial banks, mortgage banks, credit unions, and 
     other mortgage lenders should extend mortgage payment 
     forbearance to March 31, 2006, in order to allow Congress the 
     time to consider such legislation.

  Ms. LANDRIEU. Mr. President, right after Katrina hit the financial 
services industry responded with compassion to their customers in 
Louisiana. Every bank, credit union, mortgage broker, and other 
mortgage holders instituted a 90 day forbearance period during which 
they did not collect mortgage payments. They deserve to be commended 
for this policy. They gave peace of mind to the thousands of families 
who lost their homes to Katrina and Rita, or whose homes were damaged 
by the storms.
  Many of these forbearance periods have now ended, most effective 
December 1st. I have heard from homeowners throughout the state who are 
now being told by their lenders that in addition to making December's 
mortgage payment, they now also have to come up with a lump sum payment 
for the payments they missed. A lot of these people were under the 
impression that their loans would be restructured to add the three 
months on to the end of the loan term. Instead, they are getting a bill 
for thousands of dollars.
  Can you imagine what it must be like for a person in New Orleans or 
St. Bernard Parish to get this notice from their lender? Their home is 
gone. Their community has been wiped out. We have lost over 200,000 
homes in Louisiana to these storms and more than 18,000 businesses have 
been destroyed. Personal income in Louisiana has fallen by more than 25 
percent in the third quarter of 2005. And now these homeowners--in this 
kind of situation--face foreclosure.
  People in Louisiana are hard working and want to pay what they owe. 
Most lenders have reported that even with the forbearance period, close 
to 80 percent of borrowers continued to make their mortgage payments. 
People who have called my office have said that they can make the 
monthly payment, but the balloon payment is out of reach and will be 
for some time.
  I was hoping that Congress could pass legislation before we adjourned 
to establish a Louisiana Recovery Corporation that would bring some 
stability and guide the redevelopment of the state after these storms. 
It would create an entity that will give homeowners the opportunity to 
sell destroyed properties if they feel that it would be in their best 
interest. The bill that we were working on with the leaders of the 
Senate Banking Committee--Chairman Shelby and Ranking Member Sarbanes--
as well as Congressman Baker in the House of Representatives, still 
needed a lot of work. We simply were not going to have time to complete 
the bill before the holidays. It will be one of my top priorities when 
we return in the Second Session.
  In the meantime, homeowners in Louisiana need more time before they 
can begin making mortgage payments. Today I am submitting a sense of 
the Senate Resolution calling on mortgage lenders to continue their 
forbearance periods through March 31, 2006. This will give the Congress 
more time to consider and develop legislation to restore peace of mind 
to our homeowners.
  It is my hope that this resolution will prompt the Senate to make 
passing legislation to give our homeowners peace of mind a priority 
when we return next year.

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