[Congressional Record (Bound Edition), Volume 154 (2008), Part 10]
[Senate]
[Pages 14079-14080]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       SAVING THE AMERICAN DREAM

  Ms. STABENOW. Mr. President, the effects of the housing crisis have 
rippled through our economy, affecting every state in the country. 
There are currently 1 million homes in foreclosure and in the next 2 to 
3 years it is estimated that 2 million Americans may lose their homes 
to foreclosure. Few States have felt these effects more than in my 
State of Michigan. Michigan has one of the highest foreclosure rates in 
the country at 3.6 percent with 1 in every 353 households receiving a 
foreclosure filing during the month of May. The high levels of 
foreclosures, coupled with growing inventories of houses, significant 
declines in house prices, and a decline in building activity have made 
efforts for recovery even more difficult. Americans are being squeezed 
from the grocery store to the gas pump and they desperately need 
relief. That is why I am pleased to support this bipartisan housing 
legislation. This bill is a significant step to provide relief to 
struggling homeowners throughout the country and to stabilize our 
economy.
  It would strengthen the regulatory oversight of government sponsored 
enterprises, GSEs, and provide FHA modernization reforms to help 
stabilize the housing finance system and begin to restore confidence to 
the market. The bill also contains the HOPE for Homeowners FHA 
refinancing program for at-risk homeowners. The Congressional

[[Page 14080]]

Budget Office estimates that the program is expected to help 400,000 
homeowners at risk of losing their homes to foreclosure. The bill also 
seeks to keep people in their home by providing $150 million in 
additional funding for housing counseling. These funds will help as 
many as 250,000 additional families connect with their mortgage lender 
to explore options that will keep them in their homes.
       Foreclosures not only affect individual homeowners, but 
     have community-wide ramifications. These properties attract 
     crime and vandalism, which drag down local property values 
     and create losses in wealth built up through home equity. 
     Estimates show that more than 40 million households will see 
     their property values decline as a result of a foreclosed 
     home in their neighborhood. To help communities mitigate 
     these impacts, this bill would provide almost $4 billion for 
     State and local governments to purchase and rehabilitate 
     foreclosed properties. In Michigan, this would provide $345 
     million in additional economic activity and 3,220 new jobs. 
     It would help restore 5,695 properties and raise $11 million 
     in taxes for the state.
  The bill also includes important tax benefits targeted to help the 
recovery of the housing market. It includes a simplification and 
temporary increase of the low-income housing tax credit to promote the 
construction of affordable rental housing. To reduce the growing 
inventory of unoccupied housing, the bill includes a one-time homebuyer 
tax credit of $8,000 to stimulate buyer demand. I am also pleased that 
the package includes my provision to allow struggling American 
businesses to invest in the economy and create jobs here at home. It 
would allow those companies hurting the most to utilize already 
accumulated tax credits to make critical investments in their 
businesses and create jobs.
  As the housing market continues to deteriorate, I applaud the work of 
our leadership in crafting this much-needed housing package. I would 
especially like to thank Chairman Dodd and Ranking Member Shelby for 
their leadership and work on this important issue. However, I am 
concerned with two provisions of the legislation that, if enacted, 
could have far reaching implications for our Nation's housing policy.
  The bill as currently drafted provides for an effective date upon 
enactment, immediately granting the new GSE regulator power over three 
very diverse and complex entities. The new oversight system must allow 
for a transition to ensure there are no lapses in regulatory authority 
or unnecessary market disruptions. The House-passed version of the bill 
establishes an effective date of 6 months after enactment, which allows 
all stakeholders in the housing finance system adequate time to adjust 
to the new system.
  I am also concerned with the language that would restrict the use of 
the GSEs mortgage portfolios as a source of liquidity for the housing 
market. The current language includes a bias in favor of the GSEs 
securitizing loans, which predisposes the regulator from being open to 
all available options. The portfolios are a critical tool to help 
struggling borrowers refinance risky mortgages and meet the needs of 
underserved communities. It is imperative that GSEs have flexibility 
over their portfolio authority. Without this flexibility, subprime, 
multi-family and other affordable lending could be hindered during a 
time when GSE investment is needed most for families and our economy. I 
look forward to a timely and appropriate resolution to both of these 
concerns.
  This housing package is an important first step to address the crisis 
facing our Nation and it cannot wait another day. In Michigan, we have 
been in a recession for too long. Our American dream is turning into an 
American nightmare for too many families. Working together today, we 
must save the American dream for the future.

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