[Congressional Record (Bound Edition), Volume 154 (2008), Part 4]
[Senate]
[Pages 4578-4583]
[From the U.S. Government Publishing Office, www.gpo.gov]




                             HOUSING CRISIS

  Mr. DODD. Mr. President, I say amen to my colleague from Florida. I 
didn't hear everything he said; I missed the opening few sentences, but 
I think I heard about 99 percent of his comments. We have had good 
conversations privately over the last number of days. What the Senator 
from Florida probably didn't tell you is that in a previous life he was 
the Secretary of Housing and Urban Development, the person responsible 
for a lot of the housing issues in the country. Prior to that, he was 
involved in the State of Florida in housing issues. He has had a 
wonderful record of caring deeply about homeownership for those who 
would not have had the opportunity to acquire homes. So there is a 
history in his private life, as well as public life, as well

[[Page 4579]]

as understanding and caring about these issues.
  The last point the Senator made is the one I will address as well. 
This is not a time for partisan politics. We need to get the job done 
and start working on this immediately. We should have been at this 
weeks ago, in my view. There is nothing I can do about that, but there 
is something we can do about this today. I hope that in the coming 
hours we will do just that. No other issue is as important as this one.
  The Senator from Florida outlined in a broad way some of the very 
issues that need to be addressed. I agree with him and I thank him for 
his commitment to this and his willingness to see if we can pull 
together a package, and it may not solve every problem.
  I was talking earlier to some folks, saying that the word missing is 
``confidence''--the confidence of that family in Florida, the 
confidence of the investment banker, the confidence of the person 
involved in the equity markets globally--the word ``confidence.'' How 
do we restore that and give people a sense of confidence about where we 
are going.
  While I want to be careful about drawing too tight comparisons there 
is a key period that history has written volumes about, from March of 
1933 to June of 1933--the first 100 days of the Roosevelt 
administration--and there was nothing orderly about it. It was rather 
chaotic. During the Roosevelt administration, in the midst of a major 
economic crisis, on the very day of his inaugural, banks were closing 
their doors all across the country. We think of that line: ``There is 
nothing to fear but fear itself.'' That administration was trying 
everything they could to restore confidence. While a lot of their ideas 
didn't work, or were ill-conceived in some cases, there was a sense in 
the country that their Government was working on their problems, that 
the people in charge were trying to make a difference in their lives.
  We are not in a great depression, we are in a recession. We could end 
up in a very similar set of circumstances if we don't begin to act. The 
American people want to know we are acting, that we understand what 
they are going through, and that their Government, the legislative and 
executive branch, is worried about them and doing their best to make a 
difference in their lives. That is what this is all about.
  This morning I want to lay out, if I can, as chairman of the Banking 
Committee, what we are doing and trying to get done. I hope in this 
pivotal week we can make a difference in stepping forward. I thank 
Senator Kit Bond of Missouri. He and I have worked together on so many 
issues over the last number of years. We worked together on The Family 
and Medical Leave Act many years ago, and recently we coauthored the 
$180 million of counseling dollars to assist families who got 
themselves into a bad deal--whether it was their fault or the fault of 
a broker. We are trying to work that out so they can stay in their 
homes. That has made a huge difference. I thank Senator Bond for his 
understanding of this very early on, and for the importance of that 
significant step. He has pointed out--and I agree--this issue is no 
longer just a housing issue, a foreclosure issue. You only need to pick 
up this morning's business section to read this headline: ``Worst 
Quarter for Stocks Since '02.'' The first paragraph says:

       U.S. stocks ended the first quarter with the steepest loss 
     in nearly six years as turmoil in the financial markets 
     showed increasing signs of spilling over into the wider 
     economy and debate turned from whether a recession was coming 
     to how deep it would be.

  That is a very accurate statement. This is spilling over. The 
contagion is no longer limited to housing and foreclosures. It is 
spilling over into every aspect of our economy, spilling over the 
shores of our country and having global implications. The time is now 
to come together and make a difference on this issue.
  About a month ago, Majority Leader Reid brought a bill to the floor, 
the Foreclosure Prevention Act. Unfortunately, progress on the bill was 
blocked and we were unable to even debate the bill, let alone vote on 
it. Since then, the challenges facing American homeowners have only 
grown worse. In the month of February alone, 223,651 more Americans 
entered foreclosure, according to RealtyTrac, a company that collects 
real estate-related data in the country. That amounts to 7,712 
foreclosures on a daily basis--over 7,700 today, yesterday, and 
tomorrow. That is roughly 8,000 people who will be in the process of 
losing their homes in America--8,000 people every single day--unless we 
act to do something about it. We gathered to listen to people, who 
managed to get together over the weekend, on the Bear Stearns-JPMorgan 
deal, where $29 billion of taxpayer money will go to that deal with 
that issue. I would like to know there is as much concern about these 
ordinary people as there is about the shareholders in Bear Stearns. I 
feel badly that they lost a lot of money, but they are not losing their 
homes. These people--almost 8,000 every day--are.
  So I am going to come to the floor every single day and recite the 
number on a daily basis of people losing their homes, until we do what 
I think we ought to do to step up to the plate and make a difference 
for them. If that foreclosure rate continues--and all indications are 
that it is actually increasing--almost 240,000 more Americans will have 
been foreclosed on during the month of March. UBS reports that 
foreclosures of this magnitude are on par with the severity of 
foreclosures during the Great Depression.
  These foreclosure rates are not simply high in relative terms; they 
are at record levels, according to the Mortgage Bankers Association. 
The Mortgage Bankers data shows that more than 1 in every 50 homes with 
a mortgage in this country is in foreclosure. Foreclosure rates have 
been growing at record levels for some time, unfortunately.
  Foreclosures are increasing because people are continuing to struggle 
to make their payments. The data tells us that 1 in every 13 homes with 
a mortgage has fallen behind on their mortgage. Every day that goes by 
without action means more families are losing their homes.
  Compounding the problem, nationally, home prices continue to fall. 
Home prices are down over 10 percent nationwide over the past 12 
months, and they continue to fall. This is the first time we have 
experienced such a deep and widespread decline--a national decline--in 
home prices since the Great Depression.
  Merrill Lynch is predicting that home prices will fall by 15 percent 
this year and another 10 percent next year. It is quite possible that 
over the past month, since the Senate last debated this issue, an 
American who owns a $200,000 home has seen the value of that home fall 
by $5,000 in 1 month. I will repeat that. If you have a home worth 
$200,000, in the last month that home has lost $5,000 in value and may 
do that every month for the coming months. That is $5,000 of wealth 
that American families have lost while we in this body have been 
waiting to even discuss potential legislation to address these 
problems.
  While we have waited, our country lost more jobs as well. We learned 
in the month of February that the American economy lost over 100,000 
private sector jobs. We have lost private sector jobs in each of the 
last 3 months. With job losses mounting at the same time mortgage 
payments are rising, families are falling further and further behind in 
their ability to pay the mortgage, to make car payments, and to buy 
groceries and educate their children. At the same time, the cost of 
these essentials is rising.
  Inflation has risen by 4 percent over the past year, far outstripping 
growth and wages. American families have to do a lot more with a lot 
less. They have to find a way to pay the bills that keep rising, while 
the value of their home keeps falling. Their job prospects continue to 
decline. It is no wonder that consumer confidence continues to fall, 
reaching record lows that have not been seen, by some measures, since 
the early 1970s.
  We are clearly in the midst of a recession. It hasn't been called 
that yet

[[Page 4580]]

by the professionals, but that is what it is. The only question we have 
is how deep it is and how long it will run. The answer to that question 
lies, in part, in what we do in this body to confront the challenges we 
face.
  The legislation before us, which our colleagues and the majority 
leader brought to the floor, will help address the problems we are 
facing in the housing and mortgage markets in a number of ways. Senator 
Martinez outlined the parameters briefly. I will go over them once 
again. These are not revolutionary or new ideas. Many of them already 
enjoy very broad bipartisan support, at least based on articles written 
by the American Enterprise Institute, comments by the Chairman of the 
Federal Reserve, comments by the Secretary of the Treasury, and 
comments by colleagues here and in the other body as well. So we are 
not talking about some radical new proposals here, untested, without 
much thought going into them.
  The question is whether we can sit down over the next few hours and 
package something together and speak with one voice to the American 
people, saying we hear you. For those 8,000 people, you deserve at 
least as much of our attention as Bear Stearns and JPMorgan get. If we 
cannot do that, then every day, those numbers go up--8,000 a day, every 
day, people losing homes and falling into foreclosure. That is what I 
hope we will be able to do. These ideas involve counseling services and 
I thank Senator Bond for his efforts. We joined together to provide 
resources that are working.
  Last week, I spent the week back home in my State. This issue was the 
dominant issue. We have in one city alone in my State, Bridgeport, 
Connecticut, where according to the mayor, there are between 5,000 and 
6,000 foreclosures--in one of the largest cities in my State. I had to 
read the most bizarre headlines on the same day in my State, saying 
that Connecticut ranks No. 1 in per capita earnings in the country, and 
No. 2 with 6,000 foreclosures in the city of Bridgeport. There is great 
affluence, on one hand, because some have done very well, and on the 
other hand, some people are struggling to keep their noses above water. 
I listened to people at an event in Bridgeport, with the mayor, talking 
about how counseling services have been helpful, where they can work 
out a financial arrangement with the lender so they can stay in their 
homes, pay a mortgage they can afford, and the lender is getting its 
money--not as much as they would have liked, but more than getting a 
foreclosed property. So counseling works. It can make a difference for 
people. That is one of the provisions we are talking about here. I 
thank Senator Martinez for highlighting that important issue. I thank 
Senator Bond for his earlier efforts. We need to do more. That is part 
of the leader's package.
  We are also dealing with bankruptcy reform, improving disclosures, 
increasing the availability of mortgage revenue bonds, and 
appropriating emergency funds for local communities struggling with 
foreclosed and abandoned properties.
  I commend the majority leader for his leadership in putting this kind 
of a package together. But I know there are other ideas out there. In 
fact, some of these ideas need to be moderated or fixed in some way. 
But that only happens when we work together, when we sit down and try 
to iron out these differences and then step up with our proposals and 
allow others who want to offer some ideas to this to be heard as well. 
It takes time, it is laborious, but that is the job of this body, not 
to sit there and walk away and do nothing. That is not an option, and 
failure ought not be an option either. So we need to roll up our 
sleeves and go to work.
  These provisions can make a real difference for homeowners and the 
communities in which they live and our national economy as well. They 
are meaningful proposals, but they are also, I might add, modest, 
particularly in relation to some of the administration's actions.
  The administration just took the historic action to support the 
takeover of Bear Stearns by JPMorgan Chase. This action was a major 
commitment of taxpayers' money--almost $30 billion. The Senate Banking 
Committee will conduct a hearing later this week on this particular 
arrangement and other recent actions by the Treasury, the Federal 
Reserve, and other Federal agencies to address the recent turmoil in 
the financial markets.
  Without prejudging the outcome of our oversight and investigation of 
this unprecedented commitment of taxpayers' money, one thing is clear: 
It is now time to turn our attention to Main Street. As bold as the 
action was to help Wall Street, we must be bold to help millions of 
Americans who live on Main Street. Inaction, as I said a moment ago, is 
not an option, and failure is not either. Every day that passes creates 
new risks for the financial future of our Nation. We cannot hope this 
problem is going to go away and solve itself. Our competitors in the 
global economy are the only ones who will benefit if we do nothing to 
stem the rising tide of foreclosures that is hurting communities, 
families, the credit markets, and the overall economy.
  The question is not whether we should act, but how. The majority 
leader has laid out what I believe is a series of responsible policies 
that will help American families to keep their homes and help 
communities throughout our Nation deal with the foreclosure crisis. Let 
me briefly describe several of these critical elements of the package.
  The legislation increases funding for foreclosure prevention 
counseling. I have already addressed this issue. Again, we appropriated 
$180 million before. There is $200 million in the proposal before us 
that can make a huge difference to these nonprofit organizations out 
there working with lenders and borrowers, bringing them together for 
these workouts.
  In addition to effectively fighting foreclosures, we must limit the 
damaging impact that foreclosures inflict on our communities. That is 
why we need to help our local communities cope with the serious 
economic and social problems that vacant properties create. Every one 
of my colleagues understands this point. I don't need to go through a 
long description of what happens when we have vacant properties in our 
towns, communities, and neighborhoods. It is axiomatic what happens. 
Everyone understands. First, we understand the value of the neighbors' 
houses goes down immediately. As I mentioned earlier, we are watching a 
$5,000 decline on a house worth $200,000 in a month alone, merely 
because of what is happening to declining prices. Throw a foreclosed 
property into that mix, and obviously you get a further deterioration. 
Property values for each home located within one-eighth of a square 
mile of one foreclosed house fall significantly. An average city block, 
in most of our cities, is one-eighth of a square mile. That is a rough 
calculation. If you have one foreclosure in that one city block, even 
though every other home on the block is current on their mortgage 
obligations, the value of every home on that block declines immediately 
by 1 percent and crime rates go up in that neighborhood by 2 percent. 
That happens immediately. Property values decline on an average of 
$5,000 with one foreclosure in that neighborhood.
  We have 44.5 million homes adjacent to subprime foreclosed 
properties--44 to 50 million adjacent properties next to foreclosed 
properties. Let me repeat the statistic again. Every day, almost 8,000 
people in this country are going into foreclosure--more than 220,000 in 
the month of February and at least, if not more, that number in the 
month of March. When that happens, other property owners suffer. So it 
is not just the family in the foreclosed property who is affected, it 
is that hard-working family who lives down the block who is also paying 
a price for this situation because we are not acting to try to come up 
with a way to get people to work out something that allows them to stay 
in their homes.
  Localities are losing close to $4.5 billion in property taxes. Again, 
this is axiomatic. You end up with foreclosed properties, and you end 
up losing your tax base. Fire protection, police, social

[[Page 4581]]

services, and schools all pay a price as well. There is a domino effect 
in this situation, and that is what Senator Bond was talking about 
earlier. This is no longer just a foreclosure problem. It is far 
deeper, far wider, and growing by the day. This is exactly what happens 
when we end up with foreclosures in a neighborhood, what can happen to 
other properties in that area.
  That is why the issue of providing some additional assistance makes 
sense. I recommended $4 billion to go out to the community development 
block grants targeted specifically for restoring abandoned properties, 
making them more marketable, providing assistance to the communities. 
That is a lot of money, $4 billion. It is not $30 billion. That is what 
we are on the line for in the Bear Stearns-JPMorgan Chase deal. That 
deal was cut over the weekend. We never voted on it in this body; that 
is just a deal they cut. The Federal Reserve has the authority, 
apparently, to do that. I am not asking for $29 billion or $30 billion; 
I am asking for $4 billion to go back to our cities and communities to 
help mayors and towns in urban areas and rural areas where this is 
happening to provide help for them so they can put these properties in 
better shape so they can be sold.
  The leader's bill also includes a Finance Committee provision that 
would allow State housing finance agencies to use proceeds from 
mortgage revenue bonds to help extend mortgage credit to people now 
trapped in predatory loans, as well as to new homeowners. It would also 
help expand affordable rental housing, helping people who need a place 
to go if they cannot hang on to their homes.
  This provision, by the way, is one I heard over and over again, and 
you hear it in every State you go. They reached the max and they need 
relief, if that housing finance authority is going to be able to 
provide the kind of relief they need. This is an idea which has broad 
bipartisan support. I am told the Finance Committee--Senator Baucus and 
Senator Grassley care about it. They believe it is the right step to 
take. Senator John Kerry of Massachusetts has talked about this issue.
  Mr. President, I ask for 5 additional minutes.
  Mrs. BOXER. Mr. President, reserving the right to object, and, of 
course, I will not object, I just want to make sure that when Senator 
Dodd finishes, I be recognized for 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DODD. Mr. President, others have made this recommendation as 
well. It has some value.
  Senator Durbin's banking provision is a controversial provision. 
Simply let me state what it is. Under an agreement reached in the 
1970s, in order to get lending institutions to provide more credit to 
risky borrowers, there was an agreement struck that would not allow a 
workout to occur in bankruptcy when the primary residence is involved. 
You can have a workout where your secondary residence or farm is 
involved.
  Senator Durbin, I believe, rightly says: Why should that be the case? 
In bankruptcy, shouldn't the courts be able to work out something that 
allows people to stay in their homes or to afford a new mortgage? There 
is a lot of resistance to this issue, and there is an argument on the 
other side. I am not going to suggest there is not. My hope is we can 
work something out in this area. This cramdown, as it is called, this 
one provision has provoked a lot of objection to this bill, but I am 
committed to do everything I can to work it out, to allow a vote to 
occur and allow us to do something in this area.
  Senator Jack Reed of Rhode Island has a provision in the legislation 
that will improve disclosures to borrowers and make those disclosures 
available sooner in the mortgage shopping process. This provision will 
help borrowers avoid the kinds of abusive loans that are leading to so 
many foreclosures. I commend Senator Reed for this proposal. Again, I 
think it is a pretty noncontroversial provision.
  I understand there are other ideas as well. This is not 
comprehensive.
  Again, Senator Martinez mentioned one idea that Johnny Isakson has 
argued for, and I think it has value, to incentivize people to move 
into foreclosed properties by giving some kind of tax credit to lure 
people in. This is where the property has been foreclosed, the owner 
who occupied it is out, and we need to get the property owned and 
occupied. I think that idea has some value, and we should be able to 
debate and include that in a package as well.
  I wish to mention a few other steps we might consider as well, in 
addition to the Isakson proposal.
  We need to finish the job and enact legislation to modernize FHA. 
Senator Shelby and I are working on this issue. Barney Frank, a 
Congressman from Massachusetts, the chairman of the House Financial 
Services Committee, has been doing a great job, along with his 
committee members. I hope we can resolve the few remaining issues on 
modernization of FHA. We have 19 States that are high-cost States. We 
want to make sure FHA can do business in those States as well. I hope 
we can work out something to the satisfaction of all. That bill passed 
this body 93 to 1 late last year, and we have been working with the 
House to resolve our differences in that area.
  I believe we need to enact comprehensive reform of the GSEs. Senator 
Martinez mentioned this point, and I agree with it. A strong regulator 
is necessary, and we are going to get that job done to make sure Fannie 
Mae and Freddie Mac and Federal Home Loan Banks will be well regulated 
and can expand.
  In addition, I believe we need to establish a new way to deal with 
the unprecedented wave of foreclosures. This is the legislation I have 
offered called the Hope for Homeowners Act of 2008. The legislation 
closely mirrors the approach recommended by the Chairman of the Federal 
Reserve, Ben Bernanke, and it has been approached by people across the 
ideological spectrum, including the American Enterprise Institute and 
the Center for American Progress. This legislation is not a bailout at 
all. It would provide no windfall to anyone. It says the lender takes a 
haircut, but you are going to keep people in their homes. The Presiding 
Officer liked the ``haircut'' analysis, I see. The borrower would end 
up paying a price by paying insurance on the property. They have to 
stay in the home to qualify for this provision. It is not going to be 
easy on them, but nonetheless we believe it allows for a bottom to be 
achieved, a floor. We think this will help some people facing 
foreclosures, but, as importantly, it provides a floor. And until we 
get to a floor of the foreclosure crisis, we are not going to find 
capital beginning to flow again. This idea of a voluntary program, only 
going to owner-occupied residences--not speculators and, frankly, not 
people who never should have gotten into a mortgage in the first 
place--it is targeted, designed to keep people in their homes and 
provide that floor we are looking for.
  I hope something such as that can be included in this bill as well 
because we need to deal with the problem of credit. If we do not 
address the credit issue, we are not addressing the core of this 
problem. To only address the effects of the problem is not to address 
the underlying issue, and that is on seizing, if you will, the capital 
that needs to flow again. This idea, we believe, could do just that. So 
my hope is, in the coming days, we can enact something very much like 
that. It is an idea about which Congressman Frank and I have talked.
  I raised this idea several months ago, and I am delighted so many 
people across the spectrum have said this is a good idea. It was tried, 
actually, 40, 50 years ago in a different form than we are suggesting 
but, nonetheless, could make a difference.
  There are a number of other ideas we could consider, but more 
importantly, as Senator Martinez said, we need to get together on this 
issue. We cannot wait another day. There are almost 8,000 foreclosures 
a day--8,000 yesterday, 8,000 tomorrow, and every single day may be 
worse if we do not act. That is what this chart points to. It requires 
our attention and our serious energy to make a difference.
  I hope in the coming hours we can reach an agreement to go forward to

[[Page 4582]]

allow us to debate these issues and offer some sound ideas that will 
offer the American people and others involved in this issue the word 
``confidence,'' that their Congress, their Senate, their Government is 
not sitting idly by and hoping the problem miraculously will go away. 
We are working on their problem. We understand what they are going 
through. We care about it, and we want to make a difference for them. 
That is the challenge for us. I believe we can do this. This is not 
that heavy a job to get done--a simple amount of will in deciding it is 
deserving of our time and attention. If we do that, I am confident we 
can resolve these issues and set a very high standard for the action of 
this body in helping to step forward and make a difference in people's 
lives.
  I yield the floor, and I thank my colleague from California.
  The PRESIDING OFFICER. The Senator from the California.
  Mrs. BOXER. Mr. President, I thank Senator Dodd so much for his great 
leadership on this issue. The reason I very much wanted to speak this 
morning is because California is on the front lines of this crisis. We 
have about 25 percent of all the foreclosures in our State. I want to 
show Senator Dodd where we rank in terms of the cities.
  We make up 7 of the top 10 highest foreclosure filing rates 
nationwide. First is Stockton, Modesto, Merced--Merced is No. 4, 
actually. These are very much in the farmland countryside. Riverside-
San Bernardino, which is east of Los Angeles and one of the fastest 
growing areas--and by the way, the place where all of the freight goes 
through to get to the rest of the country as it comes in from Los 
Angeles. Bakersfield is No. 7, Vallejo-Fairfield, 8, and Sacramento, 
right near our capital, 9.
  We have 7 of the top 10 highest foreclosure filing rates nationwide. 
And the reason I stress it is because the things I am about to say are 
not theoretical. I have seen them happening. I held five roundtable 
discussions in various parts of my State, in many of these communities, 
and everything Senator Dodd is saying about what occurs in a community 
is right on target because when you start with one foreclosure, and a 
house gets boarded up, and then someone else puts their house up for 
sale and it sits, suddenly you have a circumstance where crime is going 
up and properties are going down. It is a vicious cycle. Suddenly 
people owe more on their home than the home is worth, and it is a very 
dangerous circumstance.
  The way I would describe it, Senator Dodd, in thanking you so much, 
is this: This crisis keeps getting away from us because while this 
administration definitely cares about Wall Street--and, by the way, I 
used to work on Wall Street, and I think what they did makes sense--the 
question is, where are they when it comes to my communities, to your 
communities, to the communities all over the country that are 
struggling? Why don't they bring that same sense of purpose?
  Today, we are going to see if our Republican friends have a change of 
heart because, of course, they stopped us the last time we tried to do 
this. But the commonsense things that are in your bill, and now I guess 
it is the leadership bill as well--and I thank you, Senator, I know you 
need to rush off--are just so sensible.
  It provides $200 million in additional funding for housing 
counselors. And let me tell you anecdotally what I know from having 
spoken to counselors. When the counselors sit down with the mortgage 
lender and they sit down with the homeowner, miracles happen, and 
anecdotally I can tell you about 50 percent of the cases are resolved.
  Now, times have changed. In the old days--and I would say that is 
when I bought my house, the old days--you had the banker down the 
street. If you wanted to refinance, you visited the banker down the 
street, and you told him the purpose of the refinance. Maybe you wanted 
to borrow on the equity of the home because you wanted to send a child 
to school. Maybe you wanted to add a new bedroom, expand the house, do 
some landscaping. It was very much a face-to-face situation. But 
because of the way the markets have changed, a lot of people don't even 
know who holds on to their mortgage. That mortgage may have been 
securitized, may have been put inside a big package of other things and 
may be sitting somewhere in a hedge fund. They do not know who actually 
holds their mortgage.
  So you get a counselor who understands how to go about following this 
trail, and it makes a huge difference.
  One would think, and I certainly would, that it is to everybody's 
benefit to save a home, not only for the lender and the homeowner but 
the community. So counselors are important.
  We provide $4 billion in community development block grants for 
localities so they can get involved as part of the solution. We are in 
Washington, but the city council people, the mayors, the county 
supervisors, the Governors and the rest, they are on the ground where 
all this is happening. Give them some tools and give them some 
standards and let them have a chance to resolve some of this.
  Allow bankruptcy judges to modify loans on principal residences. 
Right now--and I was struck to find this out, as most of my 
constituents are--if you declare bankruptcy and go to court, the judge 
can do a lot of refinancing to straighten you out, but he can't touch 
the principal home. If you have a second home, a third home, a yacht, a 
car, all that can be refinanced. But the judges have been blocked.
  Now, I know there are some on the other side of the aisle who don't 
like this provision. Well, if you don't like it, please explain why 
because it doesn't make sense. They say it will raise interest rates. 
It is just not true the way this provision has been modified. But if 
you want to change it, then vote to proceed to this bill and then fix 
that provision. Don't stop us from going to this bill.
  We provide an additional $10 billion in tax refunds for housing 
refinance agencies to refinance subprime loans. This is just another 
very good way to set up an agency that can help you out of your mess. 
If you want to stay in your home and you prove that you can stay in it, 
that you have the financial wherewithal, you can go to this to get 
these funds.
  This increases transparency and accountability by simplifying 
disclosure on mortgage documents. We all know that is key. And we allow 
struggling companies to apply current losses to tax returns from prior 
profitable years.
  This has hit home builders very hard, this downturn, and they need 
this help with Uncle Sam and the Tax Code.
  So I want to say to my colleagues who may be listening--maybe there 
is one or two--that to stop us from going to this bill is very hurtful 
to the American people. It is very harmful to the American people. 
Experts are predicting that over 2 million Americans with subprime 
loans, including more than 460,000 Californians, will lose their homes. 
Let's grab this crisis finally by the tail and pull it toward us and 
resolve it. Don't let it get away further.
  I can tell you, since we are in many ways at ground zero of this 
crisis, it is a very sad thing to watch what is happening. We have the 
ability to do a lot, and this is a modest bill. It is a good bill. It 
certainly doesn't spend as much as the bailout of Wall Street, which, 
again, I think was a good idea, but we certainly need to know more 
facts about it, and we certainly need to give the same attention and 
concern to the middle class of this great country.
  From all the meetings I held around my State, I can tell you that 
people are looking to us, and they are not going to understand it when 
a colleague votes no to proceed to a bill because they didn't like one 
out of the six things in it. It just doesn't make any sense.
  Let me give you from this chart one more look at the crisis in my 
State. This shows you nationwide that there have been 223,000-plus 
filings for foreclosure. That is 1 in every 557 homes nationwide. That 
is a 60-percent jump from 2007. In my State, which is a huge State, 
about 37 million, 38 million people now, we saw 53,000-plus filings, or 
1 in every 242 homes, for an increase of 131 percent from 2007 to 2008. 
And then we break it down by counties here and we see the desperate 
situation that

[[Page 4583]]

some of our counties and cities are going through.
  We have already made some progress, and I want to thank my colleagues 
for the stimulus package where we did a few things that helped our 
State. One of them, in particular, was raising the conforming loans by 
Fannie and Freddie. That was very helpful. We also have moved to work 
to get more counselors out there. But there is not enough counselors 
out there.
  So there is no question it is time but for us to act. We have faced, 
I don't know what it is now, 60, 70 filibusters by my Republican 
friends, and they have every single right to do it, but they also 
know--I know they know this--they will take the blame for this if 
nothing gets done. So I say to my friends, I understand you don't like 
everything on our list. I totally get it. By the way, there are things 
that are missing from this list that I would like to add. But I am not 
going to vote no to go to solving this crisis because there is 
something on here that I feel is missing.
  In conclusion--the words everybody waits for when a Senator speaks--
it is our turn to step forward, and if we fail to do so, we are 
irrelevant to this country. If we cannot have the courage to cast a 
vote to go to solving the housing crisis, we are irrelevant to this 
country when every leading economist tells us that it is the housing 
crisis that is at the heart of this recession.
  I thank the Chair for this chance to speak. We need this bill to help 
our families stay in their homes.
  Mr. LEVIN. Mr. President, I am hopeful that we can proceed to a 
debate on this important Foreclosure Prevention Act without further 
delay. Homeowners across the country are suffering, and there are a 
number of things Congress could do to improve the worsening situation. 
We need to put aside partisan bickering and work together to keep 
families in their homes and keep this crisis from further weighing down 
our economy.
  Since we last voted on whether to take up this measure in February, 
it has become even more obvious that the mortgage crisis is triggering 
a domino effect that threatens to weaken and undermine substantial 
portions of our financial system.
  The situation is dire. In Michigan alone, nearly 80,000 homes are 
expected to be lost to foreclosure by 2009. My State has seen an 
increase in the number of foreclosure filings of 282 percent since 
2005.
  Michigan is not alone in this crisis, nor are homeowners facing 
foreclosure and declining housing values the only ones being affected. 
Over the past few weeks we have seen the near collapse of investment 
bank giant Bear Stearns and an unusually active Federal Reserve working 
overtime to ease widespread concerns over our financial markets. At the 
root of these concerns is the fact that there is a long chain of 
investors and lenders relying on American homebuyers to pay what, in 
many instances are, shaky home loans.
  It is urgent that we move forward on this bill to provide immediate 
help. Since we last tried to take up this bill, I have continued my 
series of roundtable meetings in Michigan communities. I have met with 
leaders from local and State government as well as organizations who 
are in the trenches working with families facing foreclosure to discuss 
practical ways to help homeowners and protect our economy from further 
damage. When I have asked for their feedback on this bill, they think 
it would help address a number of the problems they highlighted.
  Across Michigan, everyone recognizes that declining home values 
affect not just those who are being forced into foreclosure or to sell 
at a loss but everyone who owns a home and the neighborhoods in which 
those homes are located. Many communities would like to rehabilitate 
abandoned and foreclosed properties so that surrounding property values 
do not continue to fall. But currently there are not funds to meet the 
growing demand. This bill provides $4 billion in Federal block grants 
to areas with the highest foreclosure rates and filings to help 
rehabilitate abandoned or foreclosed properties and prevent further 
damage to local housing values and neighborhoods.
  I am encouraged by the work of many counseling organizations, such as 
those I met with during my roundtable meetings in Michigan, that are 
trying to help families avert foreclosure. But across Michigan, 
foreclosure prevention counselors are overwhelmed, and a lack of funds 
is tying the hands of local groups trying to help keep families on 
track. This bill would provide $200 million for this much needed pre-
foreclosure counseling.
  Because each new foreclosure affects the value of properties around 
it, in Michigan and across the Nation, there are also many homeowners 
who are facing the financial pressures of owing more on their mortgages 
than the current dollar value of their houses, a situation known as 
being ``underwater.'' There is a critical need for more affordable 
loans to be made available to help these families refinance and stay in 
their current homes. Most homeowners do not want to uproot their 
children and leave their community behind, even if the balance of their 
mortgage is greater than the current market value of their home.
  This bill would help address this problem by authorizing States to 
issue $10 billion in new tax-exempt bonds to help homeowners refinance 
adjustable rate mortgages. Providing refinancing options for homeowners 
in potentially solvent situations is an important component in the 
effort to reverse the current tide of foreclosures.
  Ending the foreclosure crisis will require a team effort among 
Federal, State, and local governments, community and neighborhood 
organizations and lenders, brokers, and borrowers. This bill recognizes 
that fact. It provides an opportunity to help keep struggling families 
in their homes. It provides an opportunity to help restore our housing 
markets by keeping declining property values stable. It will protect 
neighborhoods from a glut of vacant homes. We need to take up this bill 
now, debate it, consider amendments, and then pass it. To not do so 
would be to sit idly by while too many needlessly suffer.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, I understand I have 30 minutes, and I now 
ask unanimous consent that it be formalized.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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