[Congressional Record (Bound Edition), Volume 154 (2008), Part 2]
[Senate]
[Pages 2669-2671]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                SCHEDULE

  Mr. REID. Mr. President, following my remarks and those of the 
Republican leader, there will be a period of morning business for an 
hour, with the Republicans controlling the first half, the majority 
controlling the final half. Following morning business, we will resume 
the motion to proceed to S. 2633, a bill that calls for the safe 
redeployment of the troops in Iraq. Today, the Senate will stand in 
recess from 12:30 until 2:15 p.m.


                                  iraq

  Mr. President, another day in Iraq. As we see from the morning 
papers--the Washington Post is a good example--headline: ``Suicide 
Bomber Hits Bus in Iraq's North.'' Among other things, the article goes 
on to state:

       A suicide bomber detonated his explosives belt outside a 
     bus in northern Iraq on Tuesday, killing at least eight 
     people and injuring many more.

  In a different paragraph:

       The Tall Afar bombing followed a bloody weekend of attacks 
     against Shiite pilgrims, the deadliest incident taking place 
     on Sunday when a suicide bomber killed at least 63 pilgrims 
     near the southern town of Iskandariyah. Even as overall 
     violence has fallen, the recent attacks underscore the 
     tenuous security environment and the resiliency of the 
     insurgency.
       In volatile Diyala province, armed men set up a fake 
     checkpoint and kidnapped 21 people.
       Near the oil-rich city of Kirkuk, gunmen attacked a 
     checkpoint manned by Sunni volunteers, killing the Sunni 
     volunteers.

  Mr. President, this is 1 day and a half billion dollars. That is what 
is going on in Iraq.
  What impact does that have? General Casey testified here yesterday. 
General Casey said:

       The cumulative effects of the last 6-plus years of war have 
     left the Army out of balance, consumed by the current fight, 
     unable to do the things we know we need to do.

  And I failed to mention in my earlier comments that below the article 
about the suicide bomber is the report of three more dead American 
soldiers: CPT Nathan R. Raudenbush, LCpl Drew W. Weaver, and SPC Keisha 
M. Morgan.
  So that is where we are on the Iraq debate today. I will sum up in a 
short time, after I make a few other remarks, and I will ask consent so 
that we have some idea today as to how we will proceed.
  I would tell all Senators that we will have, sometime today, either 
after the 30 hours or before a vote on the motion to proceed to the 
matter that is now before the Senate--immediately after that, no matter 
what happens on that--we will have a cloture vote on the second matter, 
which is, as we all know, a piece of legislation that calls for 
periodic reports by the President on the war on terror. Following that, 
when that is disposed of, we will go to the housing stimulus package. 
That is what I would like to spend a few minutes on because we will get 
to that sometime this week. It is only a question of when we get to it.


                                housing

  Mr. President, the sights and signs of America's housing crisis are 
all around us. There is not a State in the Union that doesn't feel the 
housing crisis. Neighborhood streets are dotted with one ``For Sale'' 
sign after another. And once we have one ``For Sale'' sign or, even 
worse, the bank has a foreclosure sign on it, it affects the whole 
neighborhood.
  One of my boys lives in Las Vegas, in a nice neighborhood. The 
housing prices there in the last 3 months have dropped 20 percent--20 
percent. In Las Vegas, last month, there were more foreclosures than 
there were sales of new homes. This is very unusual because Las Vegas 
has been the fire that has burned upward for 20 years, creating such an 
economic strong point that it has been known for 20 years as the most 
rapidly growing State in the Union.
  In these struggles, construction workers are having trouble finding 
jobs. Construction workers are having trouble making payments on their 
homes. In desperation, hard-working people have been talked into bad 
mortgages and are now seeing their homes just slip away. Every day, new 
statistics illuminate the depth of this growing crisis in the housing 
market.
  The crisis is everyplace. Today, the Associated Press reported that 
the number of homes facing foreclosure across our country grew by 57 
percent in the month of January. That is compared to a year ago. We 
also now know that sales prices have lost almost 10 percent in the 
final quarter of last year, and I am sure this quarter is going to be 
even worse. The last quarter marked the steepest drop in the 20-year 
history of the Standard & Poor's housing index.
  In the crisis in Nevada, I have mentioned briefly last month that we 
saw the rate of foreclosures rise 95 percent from the previous year; in 
Reno and Sparks, 611 percent. Now, who suffers from these foreclosures? 
Families who own the homes? Of course they do, but they aren't the only 
ones. It is the whole neighborhood, those who live near foreclosures, 
families who have done nothing wrong, who have paid

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their bills on time. Yet they are seeing the value of their property 
zapped.
  The Center for Responsible Lending has estimated that 40 million 
neighboring homes will experience a loss in equity if the expected 
foreclosures materialize. That would likely lead to a total decline of 
more than $200 billion in home equity, and some say that is very 
conservative. This could mean more than $3 billion in losses for Nevada 
alone.
  If that is not bad enough for homeowners, it is very bad for local 
governments that have already been forced to cut services as a result 
of the shrinking tax base. One example: Washaw County--that is Reno--is 
facing a $26 million cut to its local budget, and they say it is mainly 
due to the housing crisis, and $26 million to Washaw County is a lot of 
money.
  These numbers are staggering. We all know the housing crisis isn't 
just about statistics, it is about families. I have had, in the State 
of Nevada, six mobile resource centers where I bring in people. We do 
advertising and let them know we are going to be there. We bring in 
experts to talk, and we have people who service the loans there, we 
have credit counselors, and we have representatives from FHA. We have a 
wide range of experts there to talk to these desperate people to see if 
anything can be done to help them, and there are some things that can 
be done to help. These centers bring borrowers and mortgage services 
together to talk about how to help homeowners facing foreclosure.
  The stories they tell are heartbreaking. I could tell lots of 
stories, but the one that stands out in my mind is a man by the name of 
Elisario. What extraordinary challenges this man and his family face. 
He is a marine veteran of the Iraq war. He has three children, three 
little girls. Like thousands of others of these heroes returning from 
Iraq and Afghanistan, the war took its toll on him. He suffers from 
post-traumatic stress disorder and is recovering from many surgeries 
related to injuries he sustained in Iraq. As a result of the injuries 
he suffered in service to our country, his family was forced, for a 
time, to rely on the income from his wife's part-time job. Now, 
remember the three little girls. They fell behind in their mortgage 
payments. That doesn't surprise anyone. He called his lender but was 
told it was his responsibility to pay the loan. They weren't willing to 
work with them at all. He was told to sell the home and get an 
apartment.
  All across the country, people just like Elisario are looking to us 
for help. In far too many cases, people like him saw their mortgage 
payments skyrocket after the interest rate on their loan was reset. The 
sudden loss of income combined with the dramatic increase in the 
monthly payment is lethal for any homeowner. These are the families 
whom the legislation we will get to--hopefully sooner rather than 
later--this week will help.
  This legislation we have is not for speculators. It is not for 
speculators who lost a bet. Are we going to bail out lenders who 
underwrote mortgages? No. They shouldn't have made those loans. That is 
their problem. We are not trying to bail out borrowers who should have 
known better. We are trying to give families like Elisario's a chance 
to keep their homes and stabilize the Nation's economy in the process.
  The administration deserves credit for taking some first steps. I 
appreciate Secretary Paulson and like him a lot. He has led the efforts 
to gather mortgage servicers, investors, and housing counselors to form 
the Hope Now Alliance and Project Lifeline. These efforts should help, 
but it is such a tiny bit of help, and they are all voluntary. They 
fall completely short. Some estimate that less than 3 percent of at-
risk families will be reached under his proposals--less than 3 percent. 
We have to help the 97\1/2\ percent who won't be reached.
  The legislation before us does that. It will keep families in their 
homes by increasing preforeclosure counseling funds, expanding 
refinancing opportunities, and amending the Bankruptcy Code to allow 
more home loans on primary residences to be modified. This will help 
communities impacted by foreclosures by allowing parts of the country 
with high foreclosure rates to access Federal funds to purchase 
foreclosed properties for rehabilitation, rent, or resale.
  The bill will help struggling businesses by making it easier for them 
to utilize losses incurred in 2006, 2007, and 2008 to offset prior 
years' income to recoup previously paid income taxes. This was the 
provision that was in our previous stimulus package that our colleagues 
on the other side of the aisle stopped us from moving forward on. It is 
one the home builders liked very much.
  The legislation that will be before the Senate shortly will help 
families avoid foreclosure in the future by improving loan disclosures 
during the original loan and refinancing process. And one of the 
provisions that was also in our package that we had, that my good 
friends on the other side of the aisle defeated, was one the President 
called for in his State of the Union Message--revenue bonds to help 
people get into some of these homes that are being foreclosed upon.
  Title IV of the legislation makes changes to the Bankruptcy Code. 
These changes would allow a bankruptcy judge to modify the terms of a 
mortgage on a primary residence but only under very limited 
circumstances, limited in scope and duration. Only families who can 
pass a strict means test in bankruptcy and are currently struggling 
with an adjustable rate mortgage and subprime loan that already exists 
are eligible. That is all.
  There are limits to the modifications a judge can make to the 
interest rate, term, the principal amount of the mortgage. We do not 
aim to drive struggling families into bankruptcy with this proposal. No 
one should abuse the Bankruptcy Code to get out of debts they owe.
  The means test provided in this legislation should prevent that from 
happening. Remember the reason this is necessary today. For example, in 
Las Vegas, if you own a home down on the oceanfront in Malibu, you buy 
that and finances go bad, you can go to bankruptcy court. The 
bankruptcy court can readjust that loan on your vacation property, your 
second home, but cannot do that on your primary residence. That is not 
the way it should be.
  We are also mindful of concerns that this provision could make access 
to mortgages more difficult by increasing costs, it could inject more 
uncertainty into the market. All the experts say that is untrue. 
Georgetown has completed a study.
  In today's New York Times, there is an article: ``Getting Real About 
the Rescue.'' That is what it is about. And they go on to state how 
important it is that we do this stimulus package but especially we do 
this bankruptcy provision. This editorial says, among other things:

       If the bankruptcy provision becomes law, as it should, 
     lenders will have a powerful incentive, which they currently 
     do not have, to modify troubled loans voluntarily. If they 
     can't or won't come to new terms with borrowers, then they 
     would run the risk that a bankruptcy court would do the 
     modifying for them.

  But most, or all, I repeat, independent experts agree that any 
increase in costs would be nonexistent. Meanwhile, this modified 
bankruptcy language would help more than 200,000 families avoid 
foreclosure. It would stabilize the housing market, prevent future, 
perhaps deeper losses to families, investors--and that is so important, 
we have to do that. That is why we have to act.
  There may be no perfect solution to the growing housing crisis, but 
standing back and doing nothing would be a real mistake. The 
legislation that will shortly be before us will make a real difference 
to homeowners, neighborhoods, and our economy.
  More than 700,000 families will benefit from the policies in this 
measure, 80,000 vacant foreclosed homes will be put back to productive 
use, 30,000 jobs, and $10 billion in economic activity will be created.
  I hope my colleagues will join us to support cloture on the motion to 
proceed to this matter so we can pass the legislation and bring the 
relief to hundreds of thousands of Americans.

[[Page 2671]]



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