[Congressional Record (Bound Edition), Volume 154 (2008), Part 10]
[Senate]
[Pages 14187-14189]
[From the U.S. Government Publishing Office, www.gpo.gov]




     AMERICAN HOUSING RESCUE AND FORECLOSURE PREVENTION ACT OF 2008

  The PRESIDING OFFICER. Under the previous order, the Senate will 
resume consideration of the House message to accompany H.R. 3221, which 
the clerk will report.
  The legislative clerk read as follows:

       A message from the House of Representatives to accompany 
     H.R. 3221, an act to provide needed housing reform, and for 
     other purposes.

  Mr. DODD. Mr. President, we only have a few minutes before there is a 
rollcall vote. I wish to take a few minutes to give my colleagues an 
update on where we stand on this issue.
  The cover story in today's Congressional Quarterly Weekly is devoted 
to the housing crisis. One of the opening paragraphs in the story reads 
as follows:

       U.S. companies eliminated 91,000 jobs in June, on top of 
     the 487,000 dumped in the previous six months. Car sales fell 
     last month to their lowest level in 15 years. . . . Much of 
     this bad economic news comes back, at some point, to the 
     collapse in house prices and the resulting foreclosures.

  As we all know and as the article points out, home ownership is the 
largest investment most Americans will ever make. Middle-class families 
use home equity as a cushion against uncertainty, to finance a secure 
retirement, college costs, health care expenses, and the like. ``Now,'' 
to quote the Congressional Quarterly article again, ``that has come to 
a crashing halt, leaving many in the middle class working harder than 
ever and yet still hard-pressed to make ends meet.''
  That brings us to where we are today, with the consideration of the 
Housing and Economic Recovery Act of 2008, which the Banking Committee, 
which I am pleased to chair, reported out with a 19-to-2 vote. I 
compliment Senator Shelby from Alabama, the ranking Republican of the 
Committee, with whom I worked closely over the past number of months in 
grappling with the housing issue.
  Among the key elements of this bill is a new program to provide 
relief to these homeowners who would otherwise suffer through 
foreclosure--a provision that would help them salvage their American 
dream.
  It was my hope that this bill would have been on the President's desk 
by now, but regrettably we were unable to achieve that goal because of 
unfortunate delaying tactics. That failure has consequences. Because we 
failed to take action, there have been approximately another 90,000 
foreclosures that occurred over the week we were home during the 
Independence Day break. Had we passed the legislation and sent it to 
the President, as I argued for, before July 1, I think we would have 
avoided some 90,000 filings that occurred during the period we were on 
this recess. Not only are these families threatened with foreclosure, 
but their neighbors and their communities will see falling home prices, 
rising crime rates, and fewer resources for local schools, police, 
fire, libraries, and other services.
  I remind colleagues that this legislation has proven time and again 
to enjoy strong bipartisan support. In fact, shortly before we left for 
the recess, this bill passed by a vote of 79 to 16 on a cloture motion. 
Yet, because of a technicality, this measure is now being held up by 
one Senator because that Senator wants to add another vote on a 
completely unrelated matter.
  Let me review for my colleagues, as we prepare to renew our 
discussion on this bill, exactly what it is we are talking about and 
why it is so hard to achieve. The bill we are working on has a number 
of very key elements, all of which have been supported by strong 
bipartisan votes in either the Banking Committee or on the floor of the 
Senate.
  First, we have the HOPE for Homeowners Act, which will help 400,000 
to 500,000 American families save their homes from foreclosure. These 
families were simply seeking the American dream of home ownership. 
Sadly, in case after case, they were led astray, steered into mortgages 
they could not afford, often by mortgage brokers and loan officers who 
pretended to be trusted financial advisers but were really only out to 
make a buck for themselves. The HOPE for Homeowners Act

[[Page 14188]]

is a voluntary program that will help save these homes by forcing the 
lenders to choose to participate and take significant losses. There are 
no bailouts here. The homeowners will have to pledge at least 50 
percent of all new equity and future appreciation in order to get the 
benefit of the new FHA-insured mortgage.
  There are many protections built into the program: Only homeowners 
can qualify; no investors or speculators will be allowed to 
participate; borrowers would have to show they cannot afford their 
current mortgages; and all loans will be underwritten at a level the 
borrower can afford to pay. New loans will be 30-year fixed-rate 
mortgages.
  All of this is done at no cost to the taxpayer. In fact, over the 
next 10 years, the Congressional Budget Office tells us that the 
program could actually raise some $250 million for the Treasury.
  This provision, combined with the GSE regulatory reform section of 
the bill, passed the Banking Committee by a vote of 19 to 2, receiving 
strong bipartisan backing.
  We desperately need this legislation. As I have said over the past 
number of weeks, every day that we wait, somewhere between 8,000 and 
9,000 new foreclosures are filed in our country.
  In late June, the census reported that the home ownership rate, after 
reaching an alltime high in 2005, fell to 67.8 percent--the sharpest 
decline in home ownership in 20 years. Minorities, who were 
disproportionately likely to get subprime loans, are suffering 
especially badly. That is why this legislation is widely supported by 
the community and civil rights organizations around our country. They 
see a generation of wealth being lost as a result of this foreclosure 
crisis.
  The Senate expressed its strong bipartisan support for the HOPE for 
Homeowners Act when it defeated an amendment to strip this program out 
of the larger bill on a vote of 69 to 21.
  Second, the bill includes the FHA Modernization Act. This passed in 
early April as part of the Foreclosure Prevention Act by a vote of 84 
to 12 in this body. The provisions in the current bill are identical to 
that legislation, with the exception that the loan limits have been 
increased in high-cost areas to a maximum of $625,000.
  As the administration has repeatedly said, modernizing the FHA 
program will put it in a far better position to help keep future 
borrowers away from subprime loans.
  A number of our colleagues have spent some time citing the problems 
at FHA. Clearly, FHA has suffered some losses in recent months, as have 
all players in the mortgage market. Yet the program has about $18.5 
billion in reserves, and the performance of FHA loans improved over the 
past quarter, even as the performance of both prime and subprime loans 
has declined, according to data provided by the Mortgage Bankers 
Association.
  Moreover, for the past several months, credit scores of FHA borrowers 
have been rising, and the percentage of refinance loans--loans to 
borrowers with a proven track record of making timely payments--has 
actually increased. In addition, this bill eliminates the seller-funded 
downpayment assistance program which has been the largest source of 
losses in the FHA program.
  In other words, with its hefty reserves, an improving mix of 
business, and the reforms in this bill, we can have confidence that FHA 
will be safe and sound for years to come.
  Third, this legislation creates a strong and effective world-class 
regulator with the housing government-sponsored enterprises--Fannie 
Mae, Freddie Mac, and the Federal Home Loan Banks. These entities have 
kept the housing and conforming mortgage markets going while other 
capital markets have frozen.
  Madam President, I ask for 2 additional minutes.
  The PRESIDING OFFICER (Ms. Stabenow). Without objection, it is so 
ordered.
  Mr. DODD. We need to make sure these crucial market players are 
appropriately capitalized, well regulated, and properly supervised so 
the American people can continue to depend on them to ensure that 
affordable mortgages are always available. Recent losses at Fannie Mae 
and Freddie Mac speak to the urgency of this need, and the bill before 
us accomplishes that goal.
  Finally, there are other important provisions in this bill. The bill 
includes $3.9 billion in community development block grants to help 
local communities revitalize neighborhoods devastated by foreclosures. 
All the major organizations representing Governors and mayors across 
the country strongly support this provision as well.
  Lastly, this bill also has an affordable housing program in it which 
is absolutely critical for the long-term needs of our country.
  In short, this is a good bill. It is a balanced bill that goes to the 
heart of our Nation's current economic problems. The bill has very 
broad support, including from the Conference of Mayors, the League of 
Cities, the Mortgage Insurance Companies of America, the Leadership 
Conference of Civil Rights, the Mortgage Bankers Association, the 
Consumer Federation of America, the National Association of 
Homebuilders, the NAACP, ACORN, the Financial Services Roundtable, and 
numerous other business, consumer, and civil rights organizations.
  Senator Shelby and I urge that this legislation be supported. I hope 
we have a chance to pass it quickly, to send it to the other body for 
their consideration, and then give this bill to the President for his 
signature. This will be the major achievement and accomplishment of 
this Congress, when it comes to dealing with the underlying economic 
crisis which, at its heart, is the foreclosure rate.
  I appreciate the indulgence of the Chair. I yield the floor.


                             Cloture Motion

  The PRESIDING OFFICER. Under the previous order, pursuant to rule 
XXII, the Chair lays before the Senate the pending cloture motion, 
which the clerk will report.
  The legislative clerk read as follows:

                             Cloture Motion

  We, the undersigned Senators, in accordance with the provisions of 
rule XXII of the Standing Rules of the Senate, hereby move to bring to 
a close debate on the motion to concur in the amendments of the House, 
striking title VI through XI, to the Senate amendment to H.R. 3221, the 
Foreclosure Prevention Act.
         Harry Reid, Christopher J. Dodd, John D. Rockefeller, IV, 
           Debbie Stabenow, Jeff Bingaman, Ken Salazar, Joseph R. 
           Biden, Jr., Max Baucus, Patty Murray, Barbara A. 
           Mikulski, Charles E. Schumer, Sheldon Whitehouse, 
           Sherrod Brown, Bill Nelson, John F. Kerry, Robert P. 
           Casey, Jr., Benjamin L. Cardin, Frank R. Lautenberg.

  The PRESIDING OFFICER. By unanimous consent, the mandatory quorum 
call is waived.
  The question is, Is it the sense of the Senate that the debate on the 
motion to concur in the amendments of the House, striking title VI 
through XI, to the Senate amendment to H.R. 3221, shall be brought to a 
close?
  The yeas and nays are mandatory under the rule. The clerk will call 
the roll.
  The legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from Ohio (Mr. Brown), the 
Senator from Massachusetts (Mr. Kennedy), the Senator from Illinois 
(Mr. Obama), the Senator from Arkansas (Mr. Pryor), and the Senator 
from Montana (Mr. Tester) are necessarily absent.
  Mr. KYL. The following Senators are necessarily absent: the Senator 
from Minnesota (Mr. Coleman), the Senator from Nevada (Mr. Ensign), the 
Senator from South Carolina (Mr. Graham), the Senator from New 
Hampshire (Mr. Gregg), the Senator from Arizona (Mr. McCain), the 
Senator from Alaska (Ms. Murkowski), the Senator from South Dakota (Mr. 
Thune), the Senator from Louisiana (Mr. Vitter), and the Senator from 
Mississippi (Mr. Wicker).
  Further, if present and voting, the Senator from Minnesota (Mr. 
Coleman) would have voted ``yea.''
  The result was announced--yeas 76, nays 10, as follows:

[[Page 14189]]



                      [Rollcall Vote No. 163 Leg.]

                                YEAS--76

     Akaka
     Alexander
     Allard
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Brownback
     Byrd
     Cantwell
     Cardin
     Carper
     Casey
     Chambliss
     Clinton
     Cochran
     Collins
     Conrad
     Corker
     Craig
     Dodd
     Dole
     Domenici
     Dorgan
     Durbin
     Feingold
     Feinstein
     Grassley
     Hagel
     Harkin
     Hatch
     Hutchison
     Inouye
     Isakson
     Johnson
     Kerry
     Klobuchar
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     Martinez
     McCaskill
     McConnell
     Menendez
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Reed
     Reid
     Roberts
     Rockefeller
     Salazar
     Sanders
     Schumer
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Sununu
     Voinovich
     Warner
     Webb
     Whitehouse
     Wyden

                                NAYS--10

     Barrasso
     Bunning
     Burr
     Coburn
     Cornyn
     Crapo
     DeMint
     Enzi
     Inhofe
     Kyl

                             NOT VOTING--14

     Brown
     Coleman
     Ensign
     Graham
     Gregg
     Kennedy
     McCain
     Murkowski
     Obama
     Pryor
     Tester
     Thune
     Vitter
     Wicker
  The PRESIDING OFFICER (Mr. Sanders). On this vote, the yeas are 76, 
the nays are 10. Three-fifths of the Senators duly chosen and sworn 
having voted in the affirmative, the motion is agreed to.
  Mr. KYL. I move to reconsider the vote and to lay that motion on the 
table.
  The motion to lay on the table was agreed to.
  Mr. KYL. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Ms. KLOBUCHAR. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________