[Congressional Record (Bound Edition), Volume 154 (2008), Part 12]
[Senate]
[Pages 16576-16577]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                HOUSING

  Mr. BROWN. Mr. President, I thank the majority leader for bringing 
the housing bill to the Senate today. It was met in the past by a 
filibuster, but the good work of Chairman Dodd and Ranking Member 
Shelby and the majority leader means we finally have housing 
legislation that will matter to Ohioans and matter to Americans. In 
Ohio's Morgan County, for instance, a small rural county in southeast 
Ohio, foreclosures were up 60 percent over last year, and the year, 
obviously, is only half over. More than 200 families in my State lose 
their homes every day.
  This housing legislation will make a difference in helping people 
stay in their homes. It will help communities deal with the costs they 
bear in fixing up abandoned homes, sometimes knocking down those homes 
because homes that are blighted homes in any community cause the value 
of homes in the neighborhood owned by people who are paying and keeping 
up, keeping their houses looking good and paying their mortgages--their 
homes decline in value because of the foreclosures in their 
neighborhoods.
  This legislation, in addition to all the other things it does, 
provides help to communities to fix up those blighted homes, to knock 
down those that are beyond repair, and provides money--as has been 
cosponsored, worked on assiduously by the Presiding Officer, the 
Senator from Pennsylvania--provides money for neighborhood counselors 
so they can work out these loans and stay in their homes, people who 
might be delinquent but, if they can get a 30-year fixed mortgage, are 
able to stay in their homes.
  This is particularly good news this week, moving forward on housing 
legislation to deal with this crucial problem that afflicts so many in 
our community.
  Every day we delayed has meant more families who were not able to 
refinance their homes through the HOPE for Homeowners program. Every 
day we spent slogging through procedural hoops meant more communities 
that were unable to keep up with the flood of foreclosures they are 
facing. And every day of delay denied help to homebuyers that might 
help stem the slide that is hurting everyone.
  This legislation was adopted in the Banking Committee by a vote of 19 
to 2, thanks to the leadership of Senator Dodd and Senator Shelby. It 
has the support of the overwhelming majority of the Senate.
  The bill before us would provide critical relief to homeowners and 
communities across the country. By no means will it help everyone. Some 
people just took on too big a mortgage. Even with a reasonable 
mortgage, they would be unable the home they purchased. Other people 
have encountered trouble--like job loss or a divorce--that this 
legislation cannot cure. Still others got caught speculating on 
endlessly rising prices.
  But hundreds of thousands of families could afford to stay in their 
homes if they had a fair and stable mortgage, one with a reasonable 
interest rate rather than a predatory one, without hidden strings or 
traps that make it impossible to pay off.
  These are the families that need our help. They may be a minority of 
the people who face foreclosure in the next two or three years, but 
their numbers are substantial.
  And every home we do save makes this effort worthwhile. Every home we 
save spares a family from the trauma of foreclosure. It saves their 
neighbors from the drag that foreclosures have on the price of 
surrounding homes. And it saves their towns and cities from the 
increased costs that often stem from abandoned buildings.
  Up until this week, President Bush planned to veto this legislation. 
He argued that cities whose neighborhoods are being hollowed out by 
foreclosures do not need help from the Federal Government. I strongly 
disagree.
  This legislation contains close to $4 billion that will be allocated 
to the States and towns that have been hardest hit by the foreclosure 
crisis. Ohio is certainly one of these States. By most measures it is 
in the top three to five States based on foreclosures, subprime loans, 
and defaults.
  The $4 billion in this legislation would be used to provide grants to 
cities and towns across the country to deal with vacant properties--
renovating some and tearing down others.
  Ironically, years ago many cities in my home State tried to block 
predatory lending in their communities since the Federal and State 
governments were standing on the sidelines. They were prevented from 
doing so.
  Many are now taking these lenders to court, to try to get some help 
in cleaning up the damage from a decade of irresponsible lending. Does 
the President really think that the mayors of Ohio are going to bail 
out these very same lenders?
  Of course they won't. What they will do is try to reclaim and rebuild 
their neighborhoods.
  In addition to helping Ohio's cities, this legislation will provide 
vital help to homeowners. The HOPE for Homeowners Act we are adopting 
will provide hundreds of thousands of families the opportunity to 
refinance their current, unaffordable loans into a fixed rate loan at 
an affordable interest rate.
  This is a voluntary program. It will only work if lenders are willing 
to recognize a significant loss on these loans. But I hope it will be 
in the interest of many lenders to take a partial loss rather than 
force people needlessly into foreclosure.
  This legislation will also modernize the FHA loan program so that 
homeowners will have a good alternative to the subprime loans that have 
led to so much trouble for so many.
  It will provide some $15 billion in tax benefits to help families and 
shore up the housing market. First-time homebuyers will be eligible for 
a refundable tax credit to help finance the purchase of a home.
  People who do not itemize their taxes will be able to claim an 
additional deduction for property taxes this year.
  And housing agencies will be given increased authority to issue tax-
exempt bonds to refinance subprime loans, help first-time homebuyers, 
and build low-income rental housing.
  This legislation also provides an additional $180 million in funds 
for counseling to help people figure out how to stay in their homes.
  This is so important. The changes in mortgage finance have been 
effective in spreading risks around the globe, but responsibility has 
followed.

[[Page 16577]]

  Very rarely these days can you go downtown to your local bank and 
rework your mortgage. Borrowers are understandably confused and 
frustrated in their efforts to rework their loans. The nonprofit 
counseling agencies in Ohio and around the country have performed a 
vital service in saving home after home.
  Finally, this legislation will strengthen the regulation and 
oversight of Fannie Mae and Freddie Mac. They play a critical role in 
our economy. Today they hold or guarantee some $5 trillion in 
mortgages. With the weakness in the credit markets, they are providing 
important liquidity to the housing market.
  Treasury Secretary Paulson came before the Banking Committee a week 
and a half ago and made the case for providing extraordinary power to 
the executive branch to backstop Fannie Mae and Freddie Mac. This 
legislation provides it to him and his successor for the next 18 
months.
  I hope the market stabilizes over the months ahead and the regulatory 
changes we have put in place will ensure that the Treasury Secretary 
never has to utilize the power given to him. It can only be exercised 
if taxpayers are first in line to be paid back and the financial 
consequences of inaction would be worse than intervention.
  We don't know what the months ahead will bring, but we do know that 
we cannot stand by and watch any longer.
  I regret that it has taken so long for the Government to act--
regulators, State government, and Congress. But at long last we are 
about to take action, and for that I am grateful.
  The PRESIDING OFFICER. The Senator from Washington State.

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