[Congressional Record (Bound Edition), Volume 154 (2008), Part 6]
[House]
[Pages 8037-8061]
[From the U.S. Government Publishing Office, www.gpo.gov]




                 NEIGHBORHOOD STABILIZATION ACT OF 2008

  The SPEAKER pro tempore. Pursuant to House Resolution 1174 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the state of the Union for the consideration of the bill, H.R. 5818.

                              {time}  1950


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the state of the Union for the consideration of the bill 
(H.R. 5818) to authorize the Secretary of Housing and Urban Development 
to make loans to States to acquire foreclosed housing and to make 
grants to States for related costs, with Mrs. Tauscher in the chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered read the 
first time.
  The gentlewoman from California (Ms. Waters) and the gentlewoman from 
West Virginia (Mrs. Capito) each will control 30 minutes.
  The Chair recognizes the gentlewoman from California.
  Ms. WATERS. Madam Chairman, I yield myself as much time as I may 
consume.
  Madam Chairman, I would like to first thank Chairman Frank and all of 
the members of the Financial Services Committee, and particularly those 
members who serve on the subcommittee that I chair, the Subcommittee on 
Housing and Community Opportunity. I'm thanking Members on both sides 
of the aisle for helping to bring this bill to the floor today.
  H.R. 5818, the Neighborhood Stabilization Act, authorizes a $15 
billion HUD administrative grant and loan program to State and local 
governments to purchase, rehabilitate and resell or rent foreclosed 
homes. To understand the urgent need to enact this legislation, one 
need only consider the sobering figures on foreclosures recently 
released by RealtyTrac, which show that foreclosure filings during the 
first quarter of 2008 are 112 percent higher than 1 year ago, and that 
actual bank repossessions of homes during March were a shocking 129 
percent above March 2007.
  The human reality behind these numbers is revealed if you visit, as I 
have the past year, cities and communities in cities like Cleveland, 
Ohio; Detroit, Michigan; or the San Bernardino and Stockton 
metropolitan areas in California, where block after block is dotted by 
foreclosed properties, many of them suffering from neglect or actual 
vandalism. These abandoned and foreclosed properties drag down the 
value of homes still occupied by working families, and contribute to a 
cascade effect whereby plummeting home prices erode the tax base of 
State and local governments and cause real estate related industries 
such as the construction trades to suffer.
  States and most local governments must balance their budgets each 
year and, as a result, 20 States have already had to make or are 
proposing budget cuts due largely to revenue losses resulting from the 
subprime crisis, which further reduces demand in the economy and 
deepens the recession.
  On April 10, the Financial Services Committee heard from Mayor Thomas 
  
  
[[Page 8038]]  
  
  
Menino of Boston, Governor Martin O'Malley of Maryland, and others, 
that despite severe physical constraints, many States and cities are 
already dedicating their own shrinking tax revenues to purchase foreclosed 
properties and attempt to stabilize these neighborhoods. But they are 
overwhelmed by the scale of the problem in comparison to their 
shrinking tax revenues. For this reason, the National Governors 
Association has stated that a ``one-time Federal funding commitment to 
support the acquisition and rehabilitation for foreclosed properties is 
vital.''
  The Governors are joined in their support for the stimulus contained 
in H.R. 5818 by the U.S. Conference of Mayors, National Association of 
Counties, National Association of Local Housing Finance Agencies, and 
the National Council of State Housing Finance Agencies. H.R. 5818 is 
also endorsed by nearly 40 civil rights, community development, labor 
and low income housing groups, including the AFL-CIO, Catholic 
Charities, Lutheran Services of America, the NAACP, the National Urban 
League, the National Low Income Housing Coalition, and the National 
Foreclosure Prevention and Neighborhood Stabilization Task Force.
  This bill targets assistance where it is most needed. The $7.5 
billion in grants and $7.5 billion in loans would be allocated to 
States based on two factors: The number of foreclosures, and the number 
of subprime loans 90 days delinquent. This is then subject to a limited 
adjustment for median home prices, a bipartisan compromise that was 
worked out in mark-up with the committee's members from Ohio, which, 
like many midwestern States, has faced skyrocketing foreclosures but 
did not experience an extraordinary run up in housing prices.
  Second, the bill puts flexible resources in the hands of government 
with the capacity to address the crisis and put funds on the street 
quickly enough to stimulate the economy. Rather than expect HUD to 
process plans from 1,200 entitlement jurisdictions, the balance we 
struck at mark-up was to allocate funding to States and to the Nation's 
largest 100 cities, largest 50 counties, and cities over 50,000 with 
especially high foreclosure rates. The areas of States outside of those 
cities and counties would be addressed in the State's plans.
  Under the bill's timelines, fund obligation must begin within 6 
months of enactment, be completed within a year, and fully spent within 
2 years of enactment. This is no ``big government,'' immortal program, 
as our colleagues across the aisle suggest. Rather, it is a timely, 
targeted and temporary shot in the economy's arm, exactly where one is 
needed.
  Indeed, using well-accepted construction activity multipliers, the 
National Foreclosure Prevention and Neighborhood Stabilization Task 
Force calculates that the bill's proposed $15 billion investment will 
generate at least $38 billion in direct and ripple effect economic 
activity nationwide, employ about 120,000 people, and restore nearly 
$225 million per year in local real estate tax collections.
  Some Republicans have tried to frame this bill as a bailout bill for 
investors. This simply is not so. Government and their nonprofit 
partners will drive a hard bargain with property owners because they 
are highly incentivized to make this money go as far as possible in 
their efforts to stabilize neighborhoods where many of them have been 
working for years, and because they must pay the government back any 
funds used to purchase homes.
  In no event, moreover, can they pay more than 110 percent of the 
average home sale price in the area. Creaming of properties and 
``sweetheart'' deals are prevented by the requirement that properties 
sit for 60 days before they are eligible.
  What H.R. 5815 does make possible is for States, cities and counties 
to stabilize a few neighborhoods, especially low income ones, that are 
in serious danger of an overcorrection and rapid deterioration past the 
tipping point, where it becomes very difficult to turn them around.
  I urge Members to hear the pleas of the Nation's governors, mayors, 
community-based organizations and ordinary citizens to provide this 
critical relief to stabilize neighborhoods and stimulate the economy.
  The administration and my friends on the opposite side of the aisle 
in this Chamber argue that we cannot afford to respond. I would like to 
just remind this body of what Mr. Frank said earlier today, we afforded 
$30 billion to bail out Bear Stearns, and certainly we can afford half 
of that amount, $15 billion for the entire country. We simply cannot 
afford not to.
  I urge passage of the Neighborhood Stabilization Act.
  I reserve the balance of my time.
  Mrs. CAPITO. Madam Chairman, today I want to thank, first of all, the 
chairwoman of the Subcommittee on Housing, of which I'm the ranking 
member, for her good hard work and dedicated service. We've had a lot 
of hearings and a lot of information, and I think we all want to try to 
achieve help for the homeowners or those who are on the edge.
  But today I rise in opposition to H.R. 5818, the Neighborhood 
Stabilization Act of 2008. We all recognize that we are experiencing a 
sharp increase in foreclosure statistics and starts. Over the past year 
alone, approximately 550,000 homeowners with subprime loans began the 
foreclosure process.
  However, we shouldn't rush to act. We must guard against adopting 
policies which create moral hazards and unintended consequences.

                              {time}  2000

  Unfortunately, we believe H.R. 5818, the Neighborhood Stabilization 
Act of 2008, is a bill which does both. H.R. 5818 is an unnecessary 
government intervention in the housing market which will bail out real 
estate speculators, servicers, and lenders while doing nothing to 
assist hardworking Americans struggling to make their mortgage 
payments. This bill will not keep one person in their mortgage or in 
their home.
  The bill does this through a $15 billion authorization for grants and 
loans to be used to purchase already foreclosed homes from lenders, 
servicers, and speculators who have made bad loans or unwise 
investments. The Neighborhood Stablization Act will allow investors and 
servicers to unload their foreclosed properties to the government with 
the taxpayer footing the bill. Servicers and investors might even be 
encouraged to pursue foreclosure if this bill is enacted.
  Instead of incentivizing foreclosure, Congress should be encouraging 
services to engage in voluntary loan work-outs and modifications. 
Furthermore, this bill calls on States and local governments to convert 
foreclosed properties into affordable rental and single-family housing. 
The increase in housing supply and decrease in prices creates housing 
affordability without government intervention.
  I'm also concerned that the overly broad income targeting provisions 
in this bill, which will allow families making 100 percent and 140 
percent of area median income respectively, to rent and purchase 
properties acquired with funds from this act. It is not appropriate for 
the government to provide housing assistance to individuals who can 
afford market-rate housing.
  Congress should focus its efforts on keeping hardworking Americans in 
their homes. We should not unnecessarily intervene in the housing 
market in the process of adjustment after years of what has proved to 
be unsustainable growth. It is imperative that we recognize the primary 
beneficiaries of this bill will not be the thousands of Americans 
struggling to hold on to their home, but the lenders, servicers and 
speculators who bear much of the responsibility for the current housing 
slump.
  Putting aside the issue of how massive this new program would be, the 
bill's ultimate beneficiaries, as I said, could be our lenders and 
investors and speculators; and indeed the FHA commissioner, Brian 
Montgomery, stated in testimony before our committee that ``this 
legislation may have the unintended consequences of making foreclosure 
a more attractive option for lenders thereby compounding the very 


[[Page 8039]]

problem of rising foreclosures that the bill purports to address.''
  Madam Chairman, I oppose this bill, and I would like to reserve the 
balance of my time.
  Ms. WATERS. Madam Chairman, I yield to the chairman of the Financial 
Services Committee 3 minutes.
  Mr. FRANK of Massachusetts. A former President once unfairly 
characterized a leader of this House as someone who couldn't walk and 
chew gum at the same time. The gentlewoman from West Virginia extends, 
frankly, that insult to the whole House. She suggests we can't do two 
bills in one night. She says we should work to try to help avoid 
foreclosure. I agree. That's the next bill which we will get to after 
all of this useless temper tantrum is over, we will get to it at 3 
o'clock in the morning, but we will get to it.
  That bill will help avoid foreclosure. I know the gentlewoman agrees. 
She voted for that bill in committee although a majority of her 
colleagues were against it.
  But I do not understand how anybody could argue that doing this bill 
now interferes with that bill later. They are totally not in conflict.
  So the notion that this bill doesn't keep people out of foreclosure 
is true. It doesn't combat global warming. It doesn't get troops out of 
Iraq. It won't help me lose weight. There are a lot of things this bill 
won't do that I very much want to do. None of them are a reason to vote 
against a bill that doesn't do what it doesn't say it's going to do but 
does what it does.
  What it does is to go to the aid of cities that have been victimized 
by the deregulation run rampant, perpetrated by this administration, 
which has led to the subprime crisis. We have vacant property 
everywhere in these areas.
  Now the argument that this is going to award speculators and be an 
incentive to do foreclosures is also flatly wrong. This is $15 billion. 
People will tell you it's a lot of money, and it is. Do you know how 
much money this is? This is half of the money that this administration 
made available to buy up the debts of Bear Stearns. Now, I think they 
had to do that. I think they were forced to do it. But I think we have 
to do this as well.
  I do think that the whole country, under this administration's 
calculation, ought to get at least half of what Bear Stearns got. 
That's all that this does.
  Now, unfortunately, it's not nearly enough to buy up the property 
that's foreclosed. So anyone who says, I'm going to foreclose today 
because I want to get in on this, would be nuts because there is 
already property ahead of them. And even when this bill becomes law, if 
it does, there's a 60-day wait, and I hope it will be part of the 
stimulus.
  Property that was once paying taxes because of this subprime crisis 
now eats taxes. It bites neighborhoods. And, yes, some of the people 
who foreclose may benefit here. But we are telling the cities and the 
States to be careful with this money. They have to buy it for 
affordable housing. That will put limits on what they will pay.
  And you can say, well, why don't the cities do it on their own? 
Because the very cities that need help here have lost revenue because 
of this foreclosure. These properties are fire traps; they attract 
people who break the law; they attract sanitary nuisances. They lead to 
water hazards.
  The Acting CHAIRMAN (Ms. Baldwin). The gentleman's time has expired.
  Ms. WATERS. I yield an additional minute to the gentleman.
  Mr. FRANK of Massachusetts. I always feel good when people make 
arguments against legislation that won't really deal with the 
legislation. The notion that the problem with this bill is that it 
doesn't help avoid foreclosure, when it was not the bill intended to 
avoid foreclosure, shows well, there's a dearth of arguments against 
it.
  The argument that it's going to reward the speculators, this will go 
to cities dealing with property that is causing them problems. Do we 
not trust the cities and States of this country to take this money and 
use it judiciously and wisely to prevent neighborhood decay?
  I don't understand the animus that motivates so many of my Republican 
colleagues that say, Oh, no, let's not have government intervention 
here. Well, we heard that a while ago, and people on the other side 
successfully blocked government intervention in regulating subprime 
mortgage origination outside of the banks. It was this religion of 
never intervening that brought us here. A limited intervention to undo 
the negative consequences is what this bill calls for.
  Mrs. CAPITO. I would like to make a comment in reference to the 
chairman's comments.
  I live in a small community, just barely over 50,000. And we have 
local government and State programs in effect right now that deal with 
foreclosed or blighted projects. They work together with the local 
nonprofits, with the local land owners and realtors, and we have 
problems that are moving forward.
  So to say that we're not in favor of programs that would deal with 
foreclosure-blighted neighborhoods I think is factually incorrect.
  I would like now to yield some time to the gentleman from Florida 
(Mr. Feeney), a member of the Financial Services Committee, 3 minutes.
  Mr. FEENEY. I thank the gentlewoman.
  I would say this bill tonight proves at least two maxims about 
Congress: One is that we have two speeds: zero and that we overreact; 
and the other is that the law of unintended consequences means that 
often the adverse or the harmful consequences of the things we do in 
Congress are much more meaningful than the positive things that we 
would like to accomplish.
  Let me give one example. Back in the early sixties and seventies and 
eighties, and all the way through the nineties, Madam Chairman, there 
were lots of complaints that low- and middle-income people, especially 
minorities, didn't have access to loans, that they didn't get the same 
opportunity that other people of above-modest means had to own a home 
in America. And there were complaints, and there were all sorts of 
animosity, to use the Chairman's word from a few minutes ago, towards 
lenders for being discriminatory against low- and middle-income people 
again, especially minorities.
  So the Community Redevelopment Act was enacted in 1977, and at that 
time one of the things that Congress had the power to do was to oversee 
and look at every single lender in America in order to determine that 
they were aggressively making loans in low and poor and minority 
neighborhoods so that we could measure those institutions so we could 
insist that there be more access to homeownership.
  We got exactly what we asked for, and part of that was the subprime 
loan crisis. And part of that was zero-document loans where people 
could literally line up without any proof of income. Part of that was 
instead of making it a 70-percent loan or 75-percent loan, which almost 
never fails, making 100-percent, or 110-percent loans. Part of that was 
teaser interest rates to get people into a home at 3 percent, which 
they could afford to make an $800 or $900 a month payment, and when 
that teaser rate readjusted to 7 or 8 or 9 percent, all of a sudden 
what used to be an $800 payment became a $2,000-a-month payment, and 
they couldn't make it. They got exactly what we anticipated.
  Countrywide is now bankrupt. Countrywide in 2005 got the Best in 
Minority Lending Award from the Lending Industry Diversity Conference. 
This Congress had great intentions. We wanted to make more money 
available so that everybody could have the American Dream. In fact, as 
of 2 years ago, America had an all-time high, approaching 69 percent of 
Americans that owned their own homes. That's great.
  The truth of the matter is because of easy money from the Feds, 
because of investor imprudence, because of greedy Wall Street 
speculators, we have now got a crisis because of a bubble that is 
collapsing.
  Who is being bailed out by this bill? The $15 billion will eventually 
end up, 

[[Page 8040]]

after it goes to the cities and counties, in the pockets of the 
investors and holders of these mortgages that went seeking higher 
profits that put people in homes that they couldn't afford. We are 
doing exactly what economists want us not to do: creating a moral 
hazard. It is going to make it more likely, rather than less, that 
foolish loans are made in the future.
  Ms. WATERS. Madam Chairman, I recognize for 1 minute the gentleman 
from Massachusetts to straighten out the gentleman on the opposite side 
of the aisle who does not know the history of CRA.
  Mr. FRANK of Massachusetts. Of all of the unfair accusations, the one 
that blames the Community Reinvestment Act for this is the strongest.
  The Community Reinvestment Act was passed in 1977. This subprime 
crisis, of course, did not appear until nearly 30 years later; but more 
important, the subprime loans that caused problems were overwhelmingly 
made by institutions not covered by the Community Reinvestment Act. It 
covers depository institutions: banks and thrifts and credit unions. 
Credit unions aren't covered. Banks and thrifts.
  If only those institutions, deposit-taking, regulated institutions 
covered by CRA had made these loans, we wouldn't have had the crisis. 
The loans were made by institutions not covered by CRA 30 years, 28 
years after CRA was passed.
  Mr. FEENEY. Madam Chairman, will the gentleman yield?
  Mr. FRANK of Massachusetts. I yield to the gentleman from Florida.
  Mr. FEENEY. Perhaps the chairman didn't take my point. The point is 
that it has been aggressive policies by Congress including evaluating 
everybody under the Community Reinvestment Act.
  The Acting CHAIRMAN. The gentleman's time has expired.
  Ms. WATERS. I yield the gentleman an additional minute.
  Mr. FRANK of Massachusetts. The gentleman is wrong to say that we 
evaluated everybody under CRA. We have evaluated banks and thrifts 
under CRA. Mortgage brokers, mortgage bankers were not evaluated----
  Mr. FEENEY. Will the gentleman yield?
  Mr. FRANK of Massachusetts. No. Not until I finish this factual 
statement.
  Mr. FEENEY. I didn't say what the chairman said I said.
  Mr. FRANK of Massachusetts. I will yield to the gentleman.
  Mr. FEENEY. I didn't say what the chairman said I said. I said that 
it has been the policy of many in this Congress for about 40 years now 
to criticize lenders all over the spectrum for not pushing more money 
into low- and moderate-income areas. I think the chairman will agree 
with me.
  Mr. FRANK of Massachusetts. I will take back my time.
  First of all, I thought I heard the gentleman talk about the 
Community Reinvestment Act. It's been late. I keep hearing, ``I move to 
adjourn.'' Maybe my ears got a little curdled.
  I thought the gentleman said, and we'll check the record later. If he 
didn't mention the Community Reinvestment Act, I will apologize.
  But no. I for one have been saying that we should not be pushing 
people into homeownership when they can't handle it, and part of the 
problem here was killing affordable rental housing.
  But let's have the record clear. There is no rational way to blame 
the Community Reinvestment Act passed in 1977 and not cover the 
nondepository institutions for this crisis caused by the nondepository 
institutions.
  Ms. WATERS. Madam Chairman, I yield to the gentleman from Texas (Mr. 
Al Green), who serves on our committee, for 1 minute.
  Mr. AL GREEN of Texas. Thank you, Madam Chairman.
  I have to say this. I have to apologize to the gentleman, too, 
because for a moment, I thought I heard a disjointed syllogism because 
I couldn't make that connection.
  This bill is needed by this country. This bill is going to help 
neighborhoods maintain their integrity.
  And I have to ask one question: Where was the moral hazards argument 
when Penn Central got $7 billion? When Lockheed Martin was bailed out? 
When Franklin National Bank was bailed out? When Chrysler was bailed 
out? Continental Illinois? When Bear Stearns received its $29 billion 
plus a $13 billion loan? Where was the moral hazards argument?
  It seems that this argument surfaces whenever poor people or whenever 
people who are living in the streets of life, whenever people who have 
not found their way into the well-off, the well-heeled, and the well-
to-do, it seems that it tends to surface. I think that it's time for us 
to do for others what we can do for these major corporations.

                              {time}  2015

  Ms. WATERS. Madam Chairman, I yield 1 minute to the gentleman from 
Georgia (Mr. Scott).
  Mr. SCOTT of Georgia. Thank you very much, Madam Chairman.
  This is an extraordinarily important measure. If we don't learn from 
history, we're doomed to repeat it. Around 1929, we had another crisis 
that happened as a result of one of our financial legs coming out from 
under us. At that time, there was a Republican administration that 
fostered so much of that. Franklin Delano Roosevelt, in a Democratic 
administration, had to come and realize that government had to act.
  We're not doing this because we don't have anything else to do. We're 
doing this because we have an economic crisis of soaring magnitude 
before us. The derivatives of this magnitude are affecting communities 
and neighborhoods where these foreclosures are leaving these empty 
homes, many of them in $200,000, $300,000, $400,000 neighborhoods. 
They're taking down the residential value of communities around them, 
and these communities in these cities and towns are already strapped 
with their own financial pressures, much like my own city of Atlanta, 
and they need help in rescuing these communities. We're coming to their 
rescue.
  Mrs. CAPITO. Madam Chairman, I yield 3 minutes to a member of the 
Financial Services Committee, Mr. Roskam from Illinois.
  Mr. ROSKAM. I thank the gentlelady for yielding and for the time.
  One of the underlying issues as it relates to this bill is I think 
the way in which it was contemplated. I'm not making a process 
argument, but what I am making is an argument that suggests there's a 
very serious oversight.
  And the oversight was the committee's rejection of the McHenry 
amendment. The McHenry amendment basically said, look, if you're going 
to have these grants and loans and there's going to be properties that 
are going to be purchased, there should be an open process, there 
should be a bidding process, and it should be something that everybody 
has access to. And I think the failure of the majority in this case was 
to dismiss that and put it aside.
  I've heard cities tonight described as victims. The chairman a minute 
ago said he has great confidence, and I'm paraphrasing, but great 
confidence that cities are going to use the money judiciously and 
wisely. Well, my congressional district falls in the shadow of a city 
with a different reputation that doesn't have a judicious and wise 
reputation always. Let me read you just a couple of headlines within 
the past couple of weeks about some of the schemes that have happened 
from a corruption point of view about the very people that you're 
contemplating entrusting $15 billion to.
  Here's one this month: ``Witness Details Pay-To-Play Schemes'' or 
``Ex-Illinois Official Pleads Guilty to Lying'' or ``Corruption Firmly 
Entrenched in State'' or ``Illinois: Corruption on Parade'' or ``Top 
Aide to Illinois Governor Is Indicted in Kickback Inquiry.''
  We have got deep troubles in northern Illinois, and what is 
conspicuously absent in this bill, and I've read it, I've looked at it 
all, within this bill there is no requirement of any kind of 
disclosure, no requirement of any kind of notice, no requirement of 
anything whatsoever. So, in other words, if you're a corrupt official 
working for an agency that has been entrusted with this $15 billion, 
there's absolutely nothing, nothing that prohibits you from selling 
this to a friend for whatever you want 


[[Page 8041]]

to sell it for. The bill is absolutely silent.
  Now, is the majority trying to be complicit in a nefarious scheme? Of 
course not. But was it a gross oversight on the part of the majority in 
the committee to reject the McHenry amendment? I think so, and I think 
for that fundamental flaw alone, notwithstanding all the underlying 
policy questions, that fundamental flaw alone brings a great deal of 
skepticism to voters in my congressional district. And for that reason, 
I urge a ``no'' vote.
  Ms. WATERS. Madam Chairman, I yield myself 30 seconds.
  The gentleman from Illinois evidently has not read the bill. As a 
matter of fact, they have to have a plan that is adopted or accepted, 
reviewed by HUD. And so in the plan, all of the disclosure, everything 
that needs to be known about that city's plans will be reviewed.
  In addition to that, the amendment that the gentleman is referring to 
is an amendment that would bog down this ability to get money into the 
neighborhoods and on the street very quickly for the economic stimulus 
that we anticipate.
  I yield to the gentleman from New York (Mr. Higgins) 1 minute.
  Mr. HIGGINS. Madam Chairman, I rise today in strong support of H.R. 
5818, the Neighborhood Stabilization Act. I want to thank Chairman 
Frank and Chairwoman Waters for their persistent efforts to address the 
issue of how foreclosures and subprime lending contribute to the vacant 
and abandoned housing problem in cities like Buffalo.
  Buffalo and western New York are facing a vacant and abandoned 
housing crisis that gets progressively worse every day as more and more 
homes fall into foreclosure. While the City of Buffalo has been dealing 
with the negative effects of home foreclosures for some time, recent 
events have made their situation worse, necessitating this relief.
  Vacant homes wreak havoc on the neighborhoods in which they exist. 
These homes often serve as a haven for crime, endangering children and 
making entire neighborhoods dangerous. They also serve as a drain on 
local governments, which must deal with decaying homes long after 
owners and banks have abandoned them. Perhaps most distressing, 
abandoned homes discourage investment and influence urban flight.
  H.R. 5818 would provide immediate relief to these neighborhoods in 
several ways. It would empower local officials to take control of 
vacant and abandoned properties and increase homeownership.
  Local governments could use loan funds to purchase and rehabilitate 
vacant homes for sale to working families who otherwise may not be able 
to afford quality housing. If homes are beyond repair and within 
neighborhoods prone to vacancy and abandonment, local governments could 
use grant funds to demolish them. Both the loan and grant initiatives 
will provide a much needed and immediate injection of resources into 
these neighborhoods that have been hard hit by the foreclosure crisis, 
so that these communities will have a better chance to get back on 
their feet and move forward.
  It is highly dismaying to note that the housing market has gotten 
progressively worse in the last 12 months, creating the need for the 
stimulus provided in this bill.
  Mrs. CAPITO. Madam Chairman, I yield to the gentleman from Illinois 
(Mr. Roskam) 2 minutes.
  Mr. ROSKAM. I thank the gentlelady for yielding.
  And in response to the chairman's question, yeah, no question about 
it. There's a plan requirement on page 3, section 4 of the bill, but 
the plan requirement doesn't prohibit the type of conduct that I just 
described, a plan as it relates to goals for the sale to different 
groups, accessibility to different groups, but the plan is silent as it 
relates to this potentially corrupt practice.
  I think it's a flaw and I don't think it's a flaw that can't be 
redeemed. It can be very easily corrected. It doesn't help the 
underlying policy objections to the bill.
  But $15 billion put out there without any requirement whatsoever as 
it relates to a prohibition against self-dealing, a member of the 
housing development authority of a particular municipality calling up a 
cousin and saying, hey, come on by here, we just purchased this 
foreclosed property for $100,000, I'll sell it to you for $75,000, 
there's nothing in here. Notwithstanding the plan language, 
notwithstanding any other declaration of the majority, it is silent, 
and we can do much, much better.
  Ms. WATERS. I yield to myself 30 seconds.
  I'm glad the gentleman found the plan in the bill that I had advised 
him about because there is a plan, and perhaps it does not have 101 
things that he would like, and I'm sure you could add a lot more to it, 
but there is a plan. And the situation that he just described could not 
happen. As a matter of fact, you have to pay back the money that you 
get through the loan.
  Madam Chairman, I yield to the gentleman from Missouri (Mr. Clay) 2 
minutes.
  Mr. CLAY. Let me thank Chairwoman Waters for yielding and also for 
her leadership on this issue in getting this bill out of committee and 
to the floor.
  As an original cosponsor of this legislation, I support its speedy 
passage through the legislative process. This bill is sorely needed to 
help stabilize neighborhoods in various types of communities that have 
high incidences of housing foreclosures.
  This act establishes a loan and grant program administered by the 
Department of Housing and Urban Development to help States purchase and 
rehabilitate owner-vacated, foreclosed homes with the goal of 
stabilizing and occupying them as soon as possible, either through 
resale or rental to qualified families.
  I raised concerns about the distribution of loans and grants to 
Chairwoman Waters, and the bill's funds were originally designed for 
distribution to States with priority for the 25 most populated cities 
in the country.
  My concern was that many of us had districts that had higher density 
of foreclosures than many of the top 25 cities in population. 
Additionally, we needed to ascertain that housing was provided for low- 
and moderate-income families, inclusive of those who had already 
suffered foreclosures.
  My staff and I worked closely with Chairwoman Waters and her 
committee staff and placed provisions in the bill that address these 
concerns. My district, the First Congressional District of Missouri, 
has alarmingly high foreclosure rates and large numbers of low- and 
moderate-income families. The bill now mandates a priority for 
addressing this high foreclosure level area and others like it across 
the country.
  Again, I want to thank Chairwoman Waters for her leadership on this.
  Mrs. CAPITO. Madam Chairman, I yield 4 minutes to the gentleman from 
Texas (Mr. Hensarling), a member of the Financial Services Committee.
  Mr. HENSARLING. I thank the gentlelady for yielding, and I certainly 
rise in opposition to this bill. I have no doubt that it is certainly 
good-hearted but it is certainly wrongheaded.
  There is a great challenge in our housing markets today, but I come 
here with some interest and amusement to see how many of my friends on 
the Democratic side of the aisle bemoaned the Bear Stearns bailout by 
the Federal Reserve, only to come here and offer a bill that, 
ultimately, using the States and localities as a conduit, is going to 
bail out Wall Street. It's going to bail out the investors, the people 
who own these properties in the first place, the people who made bad 
debts.
  I wish somebody would introduce a bill to bail me out of my bad 
debts. Perhaps next time I invest in real estate or the stock market or 
the commodities, somebody will come here and say, if I failed, we will 
get the taxpayer to come in and bail me out.
  Second of all, it misses the point of what the true challenge is. The 
true challenge in our housing markets is a shrinking paycheck, and I 
know as much as our friends on the other side of the aisle wish to come 
and blame all the economic woes of our Nation on us, the truth is 
elections have consequences. They've been in charge of 


[[Page 8042]]


the economic policy of this Nation for almost 18 months now. 
And what have they done in 18 months?
  Number one, they passed a budget that has the largest single tax 
increase in American history, largest single tax increase in American 
history. After 3 years fully phased in, it's going to be a $3,000 
average burden on the American family. That shrinking paycheck causes 
people not to be able to pay their mortgage bills.
  We know what's happened to gasoline prices, almost $4 a gallon. 
Shrinking paycheck. Now supposedly they were going to bring the price 
of gas down when they were elected. The American people know 
differently, and it's not just gasoline that's $4 a gallon. Milk. I've 
got a 6-year-old and a 4-year-old back home in Dallas, Texas. They 
drink a lot of milk. Milk's expensive. The cereal they like, it's 
expensive, all happening under their watch. A shrinking paycheck.
  How are people supposed to afford their mortgage when they're having 
to pay historic high gasoline prices, historic high food prices and pay 
an extra $3,000 in taxes? Madam Chairman, that's the real challenge 
that America's families are facing now.
  And here's another problem with this particular piece of legislation 
that I find. It ignores the greater crisis in America, and that is the 
spending crisis, the one that is ignored on a daily basis here. Already 
we notice that when the new Member from Louisiana was sworn in today, 
we all saw that he had his baby in his arms, and, I don't know, it 
might have been a 1-year-old or 2-year-old child, but that child 
already has inherited a debt of almost $200,000 because Congress after 
Congress keeps on spending money and sends the burden to future 
generations.
  So, you know, what is it? It's $7.5 billion for grants here and $7.5 
billion for loans there. Well, Madam Chairman, sooner or later we're 
talking about real money.

                              {time}  2030

  We're on the verge of being the first generation in America's history 
to leave the next generation with a lower standard of living. And it's 
not just me that's saying it, it's the Congressional Budget Office, the 
Office of Management and Budget, the General Accountability Office. And 
yet again, the Democrat majority ignores that true crisis.
  I also find it quite interesting that while the Federal Government 
continues to be awash in the sea of red ink in passing on unfunded 
obligations to future generations, that almost every State and 
municipality in the Nation is running a surplus.
  The Acting CHAIRMAN. The gentleman's time has expired.
  Mrs. CAPITO. I yield the gentleman 1 additional minute.
  Mr. HENSARLING. So we're taking money away from a treasury that has 
none to supplement treasuries that do have some. We have a great 
challenge in our Nation.
  And clearly predatory lending took place, I might add, so did 
predatory borrowing. And so we need to help people, but the way to help 
them when people are struggling to pay their mortgages is not to raise 
their taxes and force them to pay the mortgages of their neighbor, 
particularly a number of neighbors and Wall Street investors who 
speculated, who might have engaged in fraud.
  But Madam Chairman, back to the States and localities. For example, 
the Commonwealth of Massachusetts spends $11 million a year on their 
Office of Tourism. If we're having a great housing crisis, maybe they 
could cut back a little on the tourism budget and help the people in 
need for housing.
  The Acting CHAIRMAN. The gentleman's time has again expired.
  Mrs. CAPITO. I yield the gentleman another 2 minutes.
  Mr. HENSARLING. Again, if this is such a great priority for the 
States and they're crying out for these loans and grants, why does the 
State of Massachusetts continue to spend $760,245 for pools and spray 
pools under the control of the Department of Conservation and 
Recreation?
  Michigan, $9.4 million to enhance public boating access and dock 
facilities. I have no doubt, Madam Chairman, that this is important. 
But again, if we have a housing crisis, maybe the good people of 
Michigan could cut back a little on their boating access facilities.
  State of Ohio. They apparently have a wonderful ``Discover Ohio'' 
tourism and marketing campaign, $8.2 million. Maybe they could use some 
of that money to assist the people in their State.
  How about some of the municipalities? According to the Daily News, 
Los Angeles spends a half a million dollars, $550,000 to be exact, for 
calligraphers to decorate proclamations and honors. I'm sure that those 
proclamations are very handsome, but again, if we're having a housing 
crisis, maybe people in Los Angeles can cut back on the calligraphy to 
assist the people in need. And yet the Democrat majority--and the 
gentlelady from California who perhaps is familiar with the 
calligraphy--has decided instead to take the money away from the 
Federal Treasury, help raise taxes on hardworking American families 
while they're trying to fill up their cars to take their children to 
school, to try to go to work, so that ultimately we're subsidizing Ohio 
tourism, L.A. calligraphy, water boating access in Michigan, and the 
list goes on and on. Surely we can find something that is more fiscally 
responsible and more creative than yet another grant and loan program 
to States and localities that ultimately bail out investors and Wall 
Street.
  This is bad legislation. It should be defeated.
  Ms. WATERS. Madam Chairman, I yield 2 minutes to the gentleman from 
Minnesota, a member of our committee, both the subcommittee and 
Financial Services, Mr. Keith Ellison.
  Mr. ELLISON. Madam Chairman, let me start by thanking Chairman Frank 
and Chairwoman Waters for bringing this critical and much-needed 
legislation to the floor. I'm proud to have worked with both of them on 
this important legislation which represents the most comprehensive 
response yet in the American mortgage crisis.
  The package of housing measures that we will vote on today and that I 
proudly support will help thousands of families facing foreclosure keep 
their homes. This bill will ultimately help other families avoid 
foreclosures in the future and help recovery of communities harmed by 
empty homes caught in the foreclosure crisis.
  This legislation comes before us at an important time in the mortgage 
foreclosure and housing crisis. The Pew Center has stated that between 
seven to eight thousand people per day are filing for foreclosure. 
Hennepin County alone, which is the largest county in the Fifth 
District of Minnesota that I represent, has experienced a 54 percent 
increase in foreclosures from the year before. Statewide foreclosures 
have risen by 39 percent.
  The legislation we're considering today establishes a $15 billion 
HUD-administered loan and grant program for the purpose of 
rehabilitation of vacant, foreclosed homes with the goal of occupying 
them as soon as possible.
  Madam Chairman, let me just say this: The fact of the matter is that 
for the people who paid every single mortgage payment and were never 
late even one time, they are suffering because of this mortgage crisis 
because they live on a block with foreclosed homes.
  This bill saves money. Can you imagine the cost to a city, in terms 
of fire, police and public works resources, just to be able to deal 
with a home that's foreclosed on a block? This is saving money. This is 
actually improving the quality of life for people all over America. And 
this amount of money that we will spend on this bill will pay thousand-
fold in terms of quality of life for people all over this country.
  And so I'm proud to be able to associate myself with this bill, proud 
to be able to say that when the people of America face a serious 
foreclosure crisis that is affecting not just the victims of 
foreclosure, but others, we responded.
  Mrs. CAPITO. Madam Chairman, I yield 4 minutes to the gentleman from 
Georgia (Mr. Price), who is also a member of the Financial Services 
Committee.



[[Page 8043]]



  Mr. PRICE of Georgia. I thank my good friend from West Virginia for 
her leadership on this and for cogently bringing the debate forward and 
stating why this is the wrong bill at the wrong time.
  I am pleased to hear from my friend, though, from Minnesota who said 
that this was going to save America money. If we keep saving money at 
this rate, our deficit ought to disappear in short order, $15 billion 
chunks going out the door. I'm not sure how that math adds up, but I'm 
certain that it works somewhere.
  I want to commend my friend from Illinois for raising the point, as I 
know that the chairwoman acknowledged, and that is that there was no 
bidding process. There is really no accountability in this bill. Yes, 
there are plans that have to be proposed and submitted, but there's no 
oversight, there is no oversight of this money. Fifteen billion dollars 
could go to anybody, truly, who was a friend or a crony of any official 
in a State or a city. And we're going to trust the cities, as the 
chairman said, it was important that we trusted the cities. And I 
believe primarily that that is important that we do trust cities. If we 
trusted cities so much, though, then why would we not adopt an 
amendment that I proposed in committee that said that we ought to let 
the city do with the property what they deemed appropriate? But we 
haven't done that. We said oh, no, even if this facility, this housing 
facility is public housing and is absolutely dilapidated, you couldn't 
demolish it. Oh, no, we wouldn't want that to happen. We wouldn't want 
the city to make a decision that they could do something better with 
that property. In fact, this bill precludes that opportunity.
  I heard the chairwoman say that she wouldn't want to add an amendment 
that would provide for that accountability or that oversight because it 
might bog down getting the money to the cities. Well, Madam Chairman, 
I'll tell you what will bog down getting money to the cities, if people 
were really sincerely interested in that, and that's a veto. And this 
bill will be vetoed by the President of the United States for 
appropriate reasons because it is irresponsible and it is not 
appropriate to spend the kind of money that we're talking about without 
any oversight and without any accountability. Remember, $15 billion.
  I am constantly surprised, truly, by my friends on the other side of 
the aisle who don't seem to remember where this money comes from. Where 
does this money come from? It comes from hardworking Americans. And I 
would suggest, Madam Chairman, as my friend from Texas said, that 
hardworking Americans have a significant challenge right now in some 
aspects of their life, trying to make certain that they can afford the 
increase in gas prices under this majority, for the increasing prices 
for commodities under this majority. And so it would be appropriate 
that we remember that, and that we allow more Americans to keep more of 
their hard-earned money.
  Now what is the solution? Well, I would suggest, Madam Chairman, that 
a couple of programs that are in place right now and are working 
diligently to make certain that people can stay in their homes, FHA 
Secure is a program that is administered by the Federal Housing 
Authority that provides greater flexibility for refinancing homes for 
hundreds of thousands of Americans. The Hope Now Alliance was a program 
that was put into place, a private sector cooperative effort that 
actually makes it so that struggling homeowners can get the kind of 
counseling and guidance to assist them to refinance their mortgages. 
More than 1.4 million Americans, Madam Chairman, have been shown the 
opportunity to be able to stay in their home.
  These are positive and productive programs that make it so that 
individuals can stay in their home. They aren't a bailout that is being 
proposed by the other side. They aren't taking $15 billion of hard-
earned taxpayer money and saying, ``It's okay. We'll cover it. Don't 
worry about that. The American people's pocketbook is absolutely 
endless.''
  This is a bad bill, wrong bill, wrong time. I urge my colleagues to 
vote ``no.''
  Ms. WATERS. I yield 1 minute to the gentleman from Ohio, a member of 
the Financial Services Committee, Mr. Charlie Wilson.
  Mr. WILSON of Ohio. Madam Chairman, I rise today in support of H.R. 
5818. As a Member from Ohio, one of the States that has been hardest 
hit by foreclosures, I know how important it is for us to pass this 
bill.
  Thirty-six percent of all the homeowners in Ohio will feel the 
effects of what's going on in the subprime crisis. The pain isn't 
limited to just the families losing their homes, but also the neighbors 
and the neighborhood around. What happens is homeowners are projected 
to each lose as much as $2,000 in property value during this crisis. 
And because of that, the State of Ohio will lose approximately $3 
billion in tax base. These are truly scary numbers.
  H.R. 5818 will help Ohio and America begin to heal. The flexible bill 
will give loans and grants directly to the States. States will then be 
able to clean up the blight, help families stay in their homes, and 
rehabilitate long vacant and decrepit homes. States will be able to 
stabilize their entire neighborhoods that are hurting from 
foreclosures.
  The Acting CHAIRMAN. The gentleman's time has expired.
  Ms. WATERS. I yield the gentleman 30 additional seconds.
  Mr. WILSON of Ohio. I would like to thank Congresswoman Waters for 
her hard work, for working with me on this vitally important issue. And 
I'm proud to support H.R. 5818 and urge my colleagues to do the same.
  Mrs. CAPITO. Madam Chairman, may I inquire as to how much time is 
remaining on each side.
  The Acting CHAIRMAN. The gentlewoman from West Virginia controls 7\1/
2\ minutes. The gentlewoman from California has 7\1/2\ minutes 
remaining.
  Mrs. CAPITO. I would like to reserve the balance of my time.
  Ms. WATERS. Madam Chairman, I yield 1 minute to the gentlewoman from 
California, Ms. Barbara Lee.
  Ms. LEE. Let me thank Chairwoman Waters for continuing to take on the 
tough issues as she once again is taking on this tough issue of the 
foreclosure crisis with this bill. I want to thank her for her 
leadership and also Chairman Frank.
  This bill will give HUD the tools to work with States and local 
governments to identify distressed neighborhoods and purchase and 
rehabilitate vacant houses before they become a blight on their 
neighborhoods.
  There are entire neighborhoods in my district in Oakland, California 
that are threatened, quite frankly, with complete collapse. The longer 
homes stay empty, the more likely they will further destabilize already 
fragile communities, discourage investment, depress home values, and 
create a spiraling cycle of foreclosures.
  This bill provides $15 billion in loans and grants to directly 
relieve these neighborhoods. This is just half of what this 
administration has already spent on bailing out Bear Stearns. Thank 
goodness Congresswoman Waters has provided this plan to help stabilize 
communities.
  I urge an ``aye'' vote.
  Ms. WATERS. I yield 1 minute to one of our newest Members, and a 
member of the Financial Services Committee, Mr. Andre Carson.
  Mr. CARSON of Indiana. Madam Chairman, I rise today in strong support 
of H.R. 5818, the Neighborhood Stabilization Act of 2008.
  This bill is extremely important to me as a representative from 
Indiana's Seventh Congressional District. My district has suffered with 
disproportionately high rates of foreclosures. In fact, Indiana has 
consistently rated among the top 10 States nationally for foreclosures, 
along with Michigan and Ohio.
  We frequently hear how housing vacancies have had a negative impact 
on property values, but as someone who has spent their career in law 
enforcement, I know that vacancies can also foster violence and theft 
in our neighborhoods.
  This bill could help communities rebuild property value and maintain 
stability in our neighborhoods. I want to 

[[Page 8044]]

thank Congresswoman McCarthy and
Congressman Capuano for working with me on an amendment in committee to 
include first responders to those States that may establish preferences 
in their housing priorities.

                              {time}  2045

  I see firsthand the dedication and passion these firefighters, 
emergency medical service providers, and police officers have for 
others. They put their lives at risk every day for the safety of those 
in our city.
  This bill is responsible and thoughtful, and I want to thank 
Congressman Frank and Chairwoman Waters for their outstanding work on 
H.R. 5818.
  Mrs. CAPITO. Madam Chairman, I would like to yield 3 minutes to the 
gentleman from New Jersey (Mr. Garrett), a member of the Financial 
Services Committee.
  Mr. GARRETT of New Jersey. I thank the gentlewoman for the time.
  Madam Chairman, I come to the floor optimistic inasmuch as I have 
heard, I think, where maybe five or six Members on the other side of 
the aisle raised the issue of exactly what transpired with regard to 
Bear Stearns and that circumstance some 2 months ago. I come optimistic 
but at the same time somewhat perplexed because, as I say, this did 
occur with regard to the Federal Reserve some 2 months ago, and 
immediately thereafter my office contacted the full body of our 
committee, both Republicans and Democrats, saying should not our 
committee be investigating what transpired there? And we extended a 
hand to the other side to say let's do two things: First, let's contact 
the Federal Reserve and Secretary Paulson to raise the issues that are 
now being raised at this belated date by the other side of the aisle. 
We came through at that time with a list of upwards of nine pertinent 
questions, questions such as, the SEC states that it monitored Bear 
Stearns' capital and liquidity positions on a regular basis and that 
levels of both capital and liquidity appeared adequate right up into 
the week of March 11, but given the subsequent rapid deterioration in 
Bear Stearns' financial condition, does the SEC have the capacity and 
authority it needs to assess these risks? Secondly, why wasn't the loan 
made in a traditional manner? If, as stated in President Geithner's 
testimony to the Senate Banking Committee that the Federal Reserve did 
not have the authority to acquire interest, what authority does it have 
now?
  These were the questions that we were posing that should have been 
answered several months ago. We extended the opportunity to the other 
side at that time to join with us in this letter to make this 
investigation. Oddly enough, at that time no one on the other side of 
the aisle found a need to do so.
  Also what is odd with regard to the investigation in this matter, the 
committee of jurisdiction looking into what the Federal Reserve did 
would be the Financial Services Committee. Once again, our side of the 
aisle suggested to the chairman that we should be delving into the 
issues that the other side is raising tonight, belatedly. We extended 
the opportunity to send a letter to Chairman Frank, with signatures of 
most Members on our side of the aisle to the chairman, saying should we 
not be looking at these issues, these nine issues that I just 
referenced before to the Federal Reserve and also Paulson? Should we 
not be looking into this in Financial Services? Two months ago no one 
from the other side of the aisle saw it as pertinent. Tonight, as we go 
into it here and from the rhetoric that comes to the floor, they all 
say that they are interested in examining what the Federal Reserve is 
doing.
  That's why I say I come to the floor optimistic and a little bit 
happy because now I believe that when I leave the podium tonight, I can 
go to the other side of the aisle and I will be more than happy to do 
two things: To make an addendum to our questions to Secretary Paulson 
and the Federal Reserve and to make an addendum to Chairman Frank to 
say that in both cases we should be investigating it and that we would 
ask that Chairman Frank schedule hearings forthwith, immediately, so 
that we can go into the matters that you are raising and that I have 
raised as well to see what authority the Federal Reserve has to conduct 
these activities.
  Ms. WATERS. Madam Chairman, I would like to yield to the gentlewoman 
from Cleveland, Ohio (Mrs. Jones) 1\1/2\ minutes and remind her that it 
was 2 years ago when I was in her city that she asked me to come to a 
town hall meeting where this issue was being discussed at that time and 
most of us really didn't understand the depth of it.
  Mrs. JONES of Ohio. Chairman Waters, I want to salute you and the 
work you've done in the housing area in Financial Services. Everybody 
knows that the Housing Subcommittee under your leadership has focused 
on issues important to everyday people, and I want to thank you for 
that leadership.
  And, Madam Chairman, you know what is the most amazing thing when I 
sit on the floor of this House? All the superfluous stuff that is 
discussed when a piece of legislation that's sorely needed by the 
people of America comes to the floor.
  Now it was a Republican administration for the past 8 years that has 
oversight on oil. If they wanted to do something about it, they could 
have done it by now. Why are they bringing it up on the housing 
legislation? Let's talk about oversight of all those billions of 
dollars that got lost in that truck in Iraq. This Republican 
administration.
  But before I get lost, let me come to why I'm standing here. I stand 
here to support the legislation because the city of Cleveland is in 
desperate straits around this particular problem: Housing and 
foreclosures. I am so pleased that I have been able to add an amendment 
that would simplify the Federal historic rehabilitation tax credit in 
the process of this so that we can use some of this historic housing to 
be able to make some changes in the lives of the people.
  It's just an amazing thing. I know the people of America are out 
there listening, and they're looking at who is it that is stepping up 
for them when they're in trouble? Who is it that understands that they 
need to pay their homeowner costs, their costs for their housing? And 
who is it to say, no, we're going to wait to try to figure out 
something else, add a new law. Come on now.
  Vote for this legislation.
  Mrs. CAPITO. Madam Chairman, I yield to the gentleman from New Jersey 
(Mr. Garrett) 1 additional minute.
  Mr. GARRETT of New Jersey. Madam Chairman, actually at this time I'd 
just like to put into the Record the letter that was signed by Members 
from our side of the aisle to Chairman Frank back on April 7, which 
would have been a month ago now, requesting an expedited hearing with 
regard to the Financial Services situation with regard to the Federal 
Reserve and the Financial Services hearing. Also, I will put in the 
Record a letter dated April 16 to Secretary Paulson from the Department 
of Treasury and Chairman Bernanke of the Federal Reserve as well, 
itemizing the nine particular questions with regard to their authority 
and activity; and also the letter in response dated April 14 from 
Chairman Barney Frank with regard to not setting forth a date for any 
hearing going forward.

                                     House of Representatives,

                                    Washington, DC, April 7, 2008.
     Hon. Barney Frank,
     Chairman, Committee on Financial Services,
     Washington, DC.
       Dear Chairman Frank: We are writing to respectfully request 
     you hold a hearing of the full Financial Services Committee 
     regarding the recent collapse of the investment bank Bear 
     Stearns and the subsequent actions taken by the Federal 
     Reserve to facilitate Bear Stearns' sale to J.P. Morgan 
     Chase. These steps have had an immediate impact on the 
     financial markets and are also expected to have a long-term 
     effect on our financial regulatory structure.
       For the first time since the Great Depression, the Fed 
     voted to open its discount window to primary dealers. While 
     this authority has been available to the Fed since 1932, the 
     decision to use it at this time has raised questions about 
     whether and when the Fed should intervene to help a 
     particular industry or firm in the name of market stability.
       With the Fed approving the financing arrangements of the 
     sale of Bear Stearns to 
     
     
   [[Page 8045]]  
     
     J.P. Morgan Chase as well as 
     guaranteeing $29 billion in securities currently held by
     Bear Stearns, the Fed has possibly exposed the American 
     taxpayers to unknown amounts of financial loss and 
     established a precedent that could lead to future instances 
     of companies in similar financial trouble expecting the same 
     assistance.
       These extraordinary actions have raised a number of complex 
     and multifaceted questions. As members of the committee of 
     jurisdiction over our nation's financial markets and the 
     regulatory bodies that oversee them, we feel it is imperative 
     to have a full and public vetting of this unique situation. 
     Therefore, we strongly urge you to convene a hearing on this 
     subject of the Financial Services Committee on the soonest 
     possible date.
       Thank you for your consideration of this request.
                                  ____



                                Congress of the United States,

                                   Washington, DC, April 16, 2008.
     Hon. Henry M. Paulson,
     Secretary, Department of the Treasury,
     Washington, DC.
     Hon. Ben S. Bernanke,
     Chairman, Board of Governors of the Federal Reserve System, 
         Washington DC.
       Dear Secretary Paulson and Chairman Bernanke: We are 
     writing regarding the recent collapse of Bear Stearns and the 
     subsequent actions taken by the Federal Reserve to facilitate 
     Bear Stearns' sale to J.P. Morgan Chase. These steps have had 
     an immediate impact on our nation's financial markets and 
     have the potential to drastically alter the future regulatory 
     structure of our entire financial system.
       For the first time since the Great Depression, the Federal 
     Reserve voted to open the discount window to primary dealers. 
     While it has been suggested that this authority has been 
     available to the Federal Reserve since 1932, the decision to 
     use it at this time has raised questions about whether and 
     when the Federal Reserve should intervene to help a 
     particular industry or firm in the name of market stability.
       With the Federal Reserve approving the financing 
     arrangements of the sale of Bear Stearns to J.P. Morgan 
     Chase, as well as guaranteeing $29 billion in securities 
     currently held by Bear Stearns, the Federal Reserve has 
     possibly exposed the American taxpayers to a tremendous 
     amount of financial loss. We have concerns that this will 
     establish a precedent that could lead to future instances of 
     companies in similar financial trouble expecting the same 
     government intervention.
       We know the long-term health of our economy is of the 
     utmost importance to you both. However, these extraordinary 
     actions have raised a number of complex questions. Below, we 
     have included a list of some of the specific questions that 
     we believe highlight areas of significant importance.


                               Questions

       1. In testimony before the Senate Banking Committee on 
     April 3, 2008, it was indicated that the assets the Federal 
     Reserve will accept as collateral for the $29 billion loan 
     are highly-rated, that J.P. Morgan Chase will keep the 
     riskiest and most complex Bear Stearns assets, and that the 
     Federal Reserve set parameters for the quality of assets that 
     it would or would not accept. What was the minimum threshold 
     for asset quality?
       2. The Securities and Exchange Commission (SEC) states that 
     it monitored Bear Stearns' capital and liquidity positions on 
     a regular basis, and that levels of both capital and 
     liquidity appeared adequate going into the week of March 11-
     17. Given the subsequent rapid deterioration in Bear Stearns' 
     financial condition, does the SEC have the capability and/or 
     authority it needs to assess risk in systemically-important 
     broker/dealers, especially at the holding company level?
       3. Now that primary dealers are granted the privilege of 
     borrowing directly from the Federal Reserve (through the 
     Primary Dealer Credit Facility), should they be subject to 
     the same oversight that commercial banks must undergo to be 
     eligible to borrow at the discount window? What are the 
     possible negative implications of such regulations?
       4. Bear Stearns has been described by some as ``too 
     interconnected to fail,'' as opposed to ``too big to fail.'' 
     How can regulators identify which firms are too 
     interconnected to fail? Also, some administration 
     participants have justified federal involvement with this 
     transaction by suggesting that one interconnected company 
     could unilaterally bring down our country's entire financial 
     markets system. How would that be possible in this instance?
       5. Why wasn't the ``loan'' made as a traditional discount 
     window loan to J.P. Morgan Chase? If, as stated in President 
     Geithner's testimony to the Senate Banking Committee, the 
     Federal Reserve did not have the authority to acquire an 
     equity interest in J.P. Morgan, Chase or Bear Stearns, what 
     authority allows it to create and finance an LLC to purchase 
     assets?
       6. If the $29 billion is not to be made available to J.P. 
     Morgan Chase until the merger with Bear Stearns is completed, 
     why is the loan necessary at all? Why is J.P. Morgan Chase 
     unwilling to hold assets that have been priced at current 
     market value and are highly rated?
       7. In 1991, the Federal Deposit Insurance Corporation 
     Improvement Act (FDICIA, P.L. 102-242, 105 Stat. 2236) set a 
     limit on the Federal Deposit Insurance Corporation's (FDIC) 
     ability to borrow from Treasury at $30 billion. The statute 
     establishes certain standards, including rate of interest 
     standards but leaves other terms to the Secretary of the 
     Treasury and the FDIC. At the pertinent part it reads:
       The Corporation is authorized to borrow from the Treasury, 
     and the Secretary of the Treasury is authorized and directed 
     to loan to the Corporation on such terms as may be fixed by 
     the Corporation and the Secretary, such funds as in the 
     judgment of the Board of Directors of the Corporation are 
     from time to time required for insurance purposes, not 
     exceeding in the aggregate $30,000,000,000 outstanding at 
     anyone time, subject to the approval of the Secretary of the 
     Treasury. . . . Any such loan shall be used by the 
     Corporation solely in carrying out its functions with respect 
     to such insurance. . . . (12 U.S.C. Sec. 1824)
       Did this $30 billion limit have any role in the Bear 
     Stearns negotiations? How did that figure emerge?
       8. A separate provision of the FDIC Act added by FDICIA 
     requires the FDIC to resolve failed institutions on the basis 
     of least cost to the insurance fund but permits the 
     suspension of that requirement when following the least cost 
     standard ``would have serious adverse effects on economic 
     conditions or financial stability . . . and . . . any action 
     or assistance [beyond what would be the least cost 
     resolution] would avoid or mitigate such adverse effects.'' 
     [12 U.S.C. Sec. 1823(c)(4)(G)(i).] This authority may not be 
     invoked, however, without consultation with the President and 
     the written recommendations from the FDIC and the Federal 
     Reserve Board.
       Was the President consulted? Were there any written 
     findings by the Federal Reserve or the Department of the 
     Treasury or any documents projecting the potential adverse 
     effects without the intervention and the mitigation that 
     would be effectuated by the intervention?
       9. Is there any known information regarding any potential 
     conflicts of interest of any of the parties involved in this 
     transaction?
       We appreciate your service to the country and look forward 
     to working with you closely on these issues as we move 
     forward. Thank you for attention to these concerns.
                                  ____



                                     House of Representatives,

                                   Washington, DC, April 14, 2008.
     Hon. Scott Garrett,
     Congressman, House of Representatives,
     Washington, DC.
       Dear Mr. Garrett: I received the letter signed by you and 
     sixteen of your Republican colleagues on the Financial 
     Services Committee expressing your concern that the recent 
     actions by the top financial appointees of the Bush 
     administration in the matter of Bear Stearns have ``possibly 
     exposed the American taxpayers to unknown amounts of 
     financial loss and established a precedent that could lead to 
     future instances of companies in similar financial trouble 
     expecting the same assistance.'' It does occur to me as I 
     read your letter that I have somewhat more confidence in the 
     judgment exercised by Secretary of the Treasury Paulson and 
     his aides and Federal Reserve Chairman Bernanke and other 
     officials of the Federal Reserve System than you appear to 
     have, but that is no reason for us not to give this the 
     fullest possible airing. So I do agree that we should be 
     thoroughly examining this matter.
       Where we may disagree is the context in which this happens. 
     That is, I agree with you that we should have a ``full and 
     public vetting of this'' matter, but I do not think it is 
     necessary that we have the hearing ``on the soonest possible 
     date.'' I say this for two reasons.
       First, the Committee, as you know, is now engaged in 
     serious consideration of the appropriate response to the 
     foreclosure crisis that now confronts us. I realize that 
     there are some who believe that we should take no action at 
     all, but I think the recent movement by the Bush 
     administration to expand the reach of the FHA, even though I 
     do not agree with it in all respects--is recognition of the 
     need for some action. I therefore believe that it is 
     important that the Committee continue its efforts on dealing 
     with the current crisis, in cooperation with our Senate 
     colleagues who as you know in a bipartisan way have also 
     moved forward on legislation, although I do not agree myself 
     with all aspects of it. My intention is to ask that the 
     Committee continue to focus on this for the next several 
     weeks.
       Secondly, I do believe it is important for the Committee to 
     begin an investigation, including hearings, into the Bear 
     Stearns issue, but not in isolation. It is important that we 
     look at what happened with regard to Bear Stearns, not 
     primarily as a matter of hindsight because in fact we cannot 
     undo what was done, but rather from the standpoint of 
     anticipating what the public response should be in similar 
     matters going forward. This includes of course discussing 
     whether or not these specific actions taken in the Bear 
     Stearns case were the best ones from the public standpoint, 
     but also beginning the very important issue of what we 
     
     
[[Page 8046]]

     might do in Congress to make it less likely
     that situation of this sort will recur. You correctly note in 
     your letter that what the Bush Administration did in this 
     case did establish ``a precedent that could lead to future 
     instances of companies . . . expecting the same assistance.'' 
     I think it is important that we therefore empower some 
     federal entities to take actions that may make this less 
     likely, and would also allow them to accompany any such 
     intervention if it should later be decided to be necessary 
     with appropriate remedial matters.
       In summary, I agree that the Committee should be looking 
     into this, not from the standpoint of rebuking Chairman 
     Bernanke or Secretary Paulson, but rather as part of a 
     serious consideration of the causes of the current crisis and 
     more importantly, what we can do to make a recurrence of the 
     events that led up to the Bear Stearns response much less 
     likely in the future.

  At this time I again will extend a hand, and I will yield to the 
other side to identify which Members from the other side of the aisle 
will be willing to sign onto the letter to Chairman Frank or to 
Chairman Bernanke, if there is anyone from the other side who is 
willing to sign onto the letters. If not, I will be waiting and I will 
be glad to do an addendum.
  Ms. WATERS. Madam Chairman, I have no further requests for time, and 
I reserve the balance of my time.
  Mrs. CAPITO. Madam Chairman, could I inquire of how much time we have 
remaining.
  The Acting CHAIRMAN. The gentlewoman from West Virginia controls 3\1/
2\ minutes. The gentlewoman from California controls 4 minutes.
  Mrs. CAPITO. Madam Chairman, I am ready to close. I have no 
additional speakers as well.
  I think we have heard a stark difference in opinion on this bill. I 
would like to make a distinction, as we have heard the discussion going 
back and forth, and I think the good-natured way that the debate has 
gone forward but also the intent of this bill is unquestionably a good 
intent.
  But I would like to clarify to those who are listening that this bill 
is separate and apart from that person who can't sleep at night, that 
family who stays up at night trying to figure out how to meet the high 
cost of gas, how to meet the higher cost of food, and how to make their 
mortgage payment. We've been working with FHA to get people to 
refinance and to redo their loans so they can stay in their house, and 
I don't want there to be confusion concerning this bill and the next 
bill that we are going to be considering shortly after this.
  This bill, separate and apart, is not going to help that family who 
can't figure out in the middle of the night how they are going to stay 
in their home, how they are going to pay their mortgage. These 
properties that we're also discussing are already foreclosed-upon 
properties. They're owned by investors, speculators, and financial 
institutions. And that's our objection. I don't believe we are in a 
position, and I don't think any of the speakers on our side believe 
we're in a position for a costly bailout for the lenders, servicers, 
and real estate speculators who have made risky bets on the housing 
market and who are now going to off-load their properties into a 
government program. I think that penalizes every single taxpayer, and 
it really penalizes that person at night who can't figure out how 
they're going to get up and pay their mortgage the next day, and that's 
the person we desperately need and we want to help and it's proper that 
we should help.
  So I believe that H.R. 5818 is overly broad. It's a new government 
program that is going to end up creating a moral hazard, and it's going 
to end up benefiting not individuals, not people who are having trouble 
making their mortgage payments, not people who find themselves upside 
down in their house. It's going to end up benefiting, at the cost of 
the taxpayers, and I repeat again, lenders, servicers, and real estate 
speculators.
  And with that, I urge a ``no'' vote on H.R. 5818.
  Madam Chairman, I yield back the balance of my time.
  Ms. WATERS. Madam Chairman, I yield myself the balance of my time.
  Madam Chairman and Members, I would like to thank all of the Members 
who have come to the floor today in support of this legislation because 
they understand the devastation to neighborhoods all over this country.
  I have listened very carefully to the arguments from the opposite 
side of the aisle, and none of them rise to the merit of being able to 
oppose this bill because they're substantive arguments.
  First of all, I have heard Members on the opposite side of the aisle 
talk about taxes. They have talked about gasoline. They have talked 
about everything except what we are here to talk about: the fact that 
there has been a subprime meltdown in this country and many 
neighborhoods are devastated. We have homes that are being stripped of 
the copper. We have homes that have been boarded up with vandals inside 
those homes, oftentimes living inside those homes, with the weeds 
growing up in many of these properties, and the value of the homes in 
the neighborhood where people are attempting to maintain their homes is 
going down every day.
  We had one Member on the opposite side of the aisle talk about how 
flush these cities are with money. Evidently, he has not looked at what 
is going on in the cities and States. Many of them are in deficit 
situations. They're in deficit situations because we're in this 
recession, this nonperforming economy under the leadership of the 
President of the United States where the price of food has risen, 
gasoline prices are up, and the subprime mess is fueling the problems 
of our economy. And with all of this that has taken place under this 
President and this administration, you would think that the Members on 
the opposite side of the aisle would want to come to the aid of their 
constituents.
  We have talked about the $30 billion bailout under the Fed Chairman 
that was appointed by this President. And I am sure, since we did not 
get a call in the middle of the night to even discuss with us that the 
bailout was going to take place, I'm sure that the Fed Chairman called 
the President that appointed him. And I would give anything--I would 
place money on the line--to tell you that the President approved of 
that bailout. And so why not bail out the people who deserve to be 
helped? People, many of them who got into loans that were lured into 
these loans, lured into these mortgages by unscrupulous real estate 
brokers who told them to just sign on the dotted line, by unscrupulous 
folks representing some of the financial institutions who said get into 
this ARM and when it resets, I will be there to help you refinance it, 
and, of course, they're not there. These people, many of them have lost 
these homes through no fault of their own.
  But the neighborhoods are being devastated. We have information here 
that tells us how much crime will be fostered on the neighborhoods. As 
a matter of fact, what we have learned is that when there is one 
foreclosure, it leads to not only vandalism that affects the entire 
neighborhood, but it also increases the crime. This has all been 
documented.
  I would think that the representatives who have been sent here by the 
people who have voted for them would want to be able to go home and say 
to their constituents, I understand what's going on in the 
neighborhoods; to say to their mayors and to say to their Governors and 
to say to their county commissioners, ``We are here to help.'' Yes, we 
are spending a lot of money on other things. As a matter of fact, many 
of the Members on the opposite side of the aisle, in a matter of hours, 
are going to vote for over $107 billion in supplemental funding to 
continue the war in Iraq.

                              {time}  2100

  Many of these Members have voted to give tax increases to the richest 
1 percent in America. The least they could do is vote for the citizens 
and for their cities.
  I yield back the balance of my time.
  The Acting CHAIRMAN. All time for general debate has expired.
  Pursuant to the rule, the amendment in the nature of a substitute 
printed in the bill shall be considered as an original bill for the 
purpose of amendment under the 5-minute rule and shall be considered 
read.


[[Page 8047]]


  The text of the committee amendment is as follows:





                               H.R. 5818

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the 
     ``Neighborhood Stabilization Act of 2008''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title and table of contents.
Sec. 2. Congressional purposes.
Sec. 3. Loans and grants to States.
Sec. 4. Qualified plans.
Sec. 5. Allocation of amounts.
Sec. 6. Loans.
Sec. 7. Grants.
Sec. 8. Eligible housing stimulus activities.
Sec. 9. Shared appreciation agreement.
Sec. 10. Spending requirements.
Sec. 11. Servicer contact.
Sec. 12. Accountability.
Sec. 13. Definitions.
Sec. 14. Funding.
Sec. 15. Regulations and implementation.

     SEC. 2. CONGRESSIONAL PURPOSES.

       The purposes of this Act are--
       (1) to establish a loan and grant program administered by 
     the Department of Housing and Urban Development to help 
     States, metropolitan cities, and urban counties purchase and 
     rehabilitate owner-vacated, foreclosed homes with the goal of 
     stabilizing and occupying them as soon as possible, either 
     through resale or rental to qualified families;
       (2) to distribute these loans and grants to areas with the 
     highest levels of foreclosure and delinquent subprime 
     mortgages;
       (3) to provide incentives for States, metropolitan cities, 
     and urban counties to use the funds to stabilize as many 
     properties as possible; and
       (4) to provide housing for low- and moderate-income 
     families, especially those that have lost homes to 
     foreclosure.

     SEC. 3. LOANS AND GRANTS TO STATES.

       The Secretary of Housing and Urban Development shall, 
     subject to the availability of amounts under section 14, make 
     grants under section 5(a) to qualified States and make loans 
     under section 6 in accordance with the approved plans of 
     qualified States, for use to carry out eligible housing 
     stimulus activities under section 8.

     SEC. 4. QUALIFIED PLANS.

       (a) In General.--The Secretary may make a grant under this 
     Act only to a State, and may allocate a loan authority amount 
     under this Act only for a State, that has submitted to the 
     Secretary a plan that meets the requirements under this 
     section and has been approved under this section. A State 
     shall reallocate amounts under subsection (f) or (g) of 
     section 5 only to a qualified metropolitan city or qualified 
     urban county, respectively, that has submitted to the 
     Secretary a plan that meets the requirements under this 
     section and has been approved under this section.
       (b) Contents.--A plan under this section for an allocation 
     recipient shall--
       (1) designate a housing finance agency of the allocation 
     recipient, or other agency, department, or entity of the 
     allocation recipient, or any other designee, as the 
     allocation recipient administrator to act on behalf of the 
     allocation recipient for purposes of this Act;
       (2) describe the housing stimulus activities under section 
     8 to be carried out with assistance under this Act for the 
     allocation recipient by the entity identified pursuant to 
     paragraph (1) of this subsection;
       (3) prioritize the allocation of funds to low- and 
     moderate-income neighborhoods with high concentrations of 
     foreclosures and describe how such activities will help 
     restore or improve the viability of such neighborhoods by 
     providing for purchase or occupancy of qualified foreclosed 
     properties as soon as practicable and in a manner that will 
     facilitate repayment of the loans provided under this Act for 
     carrying out such activities;
       (4) set forth the procedures that the allocation recipient 
     will use to allocate grant and loan amounts and monitor for 
     compliance with the requirements of section 8;
       (5) provide that grant and loan amounts provided under this 
     Act for the allocation recipient will be used only for 
     eligible housing stimulus activities under section 8 that are 
     eligible under such section for assistance with grant or loan 
     amounts, as applicable;
       (6) contain such assurances as the Secretary shall require 
     that the housing stimulus activities to be carried out with 
     assistance under this Act shall not result in a significant 
     net loss in rental housing in an area in which such 
     activities are undertaken;
       (7) give priority emphasis and consideration to 
     metropolitan areas, metropolitan cities, urban areas, rural 
     areas, low- and moderate-income areas, census tracts and 
     other areas having the greatest need, including those--
       (A) with the greatest percentage of home foreclosures;
       (B) with the highest percentage of homes financed by 
     subprime mortgage loans over 90 days delinquent; or
       (C) identified by the State, qualified metropolitan city, 
     or unit of general local government as likely to face a 
     significant rise in the rate of home foreclosures.
       (8) provide preference for activities that serve the lowest 
     income families, who otherwise meet the income requirements 
     under section 8, for the longest period and homeowners, who 
     otherwise meet such income requirements, whose mortgages have 
     been foreclosed;
       (9) provide preference for use of grant and loan amounts in 
     connection with acquisition of qualified foreclosed 
     properties that are acquired no earlier than 60 days after 
     the owner of the property described in section 13(7)(B) 
     acquired such ownership;
       (10) describe any other preferences the allocation 
     recipient may establish, such as housing for first 
     responders, for veterans, for nurses serving underserved 
     areas or homeless persons, or for homeless persons in 
     accordance with the 10-year plan of the State to end 
     homelessness, or providing housing for public school teachers 
     or workforce who are employed by the city or locality in 
     which the housing is located;
       (11) provide for obligation and outlay of grant amounts, 
     and for loan commitments and disbursement, in accordance with 
     the requirements under section 10; and
       (12) in the case of any grant or loan amounts that will be 
     invested with the possibility of a return on investment, 
     provide for use of any return on such investment only for one 
     or more eligible housing stimulus activities under section 8.
       (c) Submission.--
       (1) In general.--The Secretary shall provide for allocation 
     recipients to submit plans under this section to the 
     Secretary and shall establish requirements for the contents 
     and form of such plans. Except in the case of plan 
     resubmitted pursuant to subsection (d)(3), the Secretary may 
     not accept or consider a plan unless the plan is submitted to 
     the Secretary before the expiration of the 30-day period 
     beginning upon the date of the enactment of this Act.
       (2) Public approval.--An allocation recipient may not 
     submit a plan to the Secretary unless the plan is approved by 
     the chief executive officer of the allocation recipient after 
     a public hearing on the plan held pursuant to reasonable 
     public notice.
       (d) Review and Approval.--
       (1) Timing.--The Secretary shall review, and approve or 
     disapprove, each plan submitted or resubmitted pursuant to 
     paragraph (3) in compliance with the requirements established 
     under this section before the expiration of the 30-day period 
     beginning upon the submission of the plan. If the Secretary 
     does not approve or disapprove a plan that is submitted or 
     resubmitted in accordance with the requirements under this 
     section before the expiration of such 30-day period and 
     notify the allocation recipient of such approval or 
     disapproval, the plan shall be considered approved for 
     purposes of this section.
       (2) Standard for disapproval.--The Secretary may disapprove 
     a plan only if the plan fails to comply with the requirements 
     of this Act.
       (3) Resubmission.--If the Secretary disapproves the plan of 
     an allocation recipient, the Secretary shall submit to the 
     allocation recipient the reasons for the disapproval, and the 
     allocation recipient may, during the 15-day period that 
     begins upon notification of such disapproval and the reasons 
     for such disapproval, submit to the Secretary a revised plan 
     for review and approval in accordance with this subsection.

     SEC. 5. ALLOCATION OF AMOUNTS.

       (a) Grants.--From the total amount made available under 
     section 14(a) for grants under this Act, the Secretary shall 
     make a grant to each qualified State in the grant amount 
     determined under subsection (c) of this section for the 
     qualified State.
       (b) Loans.--From the aggregate amount of authority for the 
     outstanding principal balance of loans made under this Act 
     pursuant to section 14(b)(1), the Secretary shall allocate 
     such authority for loans under this Act for each qualified 
     State in the loan authority amount determined under 
     subsection (c) of this section for the qualified State.
       (c) Grant Amounts and Loan Authority Amounts.--
       (1) In general.--The grant amount or loan authority amount 
     for a qualified State shall be the foreclosure grant share or 
     foreclosure loan share, respectively, for the State 
     determined under subsection (d), as such share is adjusted in 
     accordance with an index established or selected by the 
     Secretary to account for differences between qualified States 
     in the median price of single family housing in such States.
       (2) Limitation on adjustment.--If such adjustment would 
     result in a grant amount or loan authority amount for any 
     State that exceeds 125 percent of the foreclosure grant share 
     or foreclosure loan share, respectively, for the State, the 
     grant amount or loan authority amount for the State shall be 
     125 percent of foreclosure grant share or foreclosure loan 
     share, respectively, for the State and the Secretary shall 
     increase the grant amounts or loan authority amounts for all 
     other States on a pro rata basis, except as provided in 
     paragraph (3), by the amount necessary to account for the 
     aggregate of any such decreases in grant amounts or loan 
     authority amounts for States to comply with the 125 percent 
     limitation.
       (3) Limitation on reallocation.--No increase in the grant 
     amount or loan authority amount for any State from amounts 
     reallocated pursuant to paragraph (2) shall result in the 
     grant amount or loan authority amount for any State exceeding 
     125 percent of the foreclosure grant share or foreclosure 
     loan share for the State, respectively.
       (4) Priority preference for unused amounts.--States which 
     have their grant or loan amounts reduced under paragraph (2) 
     shall be granted a priority preference for any loans or 
     
     
 [[Page 8048]]    
     
     
     grants which may be reallocated under subsection (i) 
     (relating to reallocation of funds).
       (d) Foreclosure Shares.--For purposes of this section:
       (1) Grant share.--The foreclosure grant share for a 
     qualified State shall be the amount that bears the same ratio 
     to the total amount made available under section 14(a) as the 
     number of foreclosures on mortgages for single family housing 
     and subprime mortgage loans for single family housing that 
     are over 90 days delinquent, occurring in such State during 
     the most recently completed four calendar quarters for which 
     such information is available, as determined by the 
     Secretary, bears to the aggregate number of such foreclosures 
     and such delinquent subprime mortgage loans occurring in all 
     qualified States during such calendar quarters.
       (2) Loan share.--The foreclosure loan share for a qualified 
     State shall be the amount that bears the same ratio to the 
     aggregate amount of the principal balance of loans that may 
     be outstanding at any time under this Act pursuant to section 
     14(b)(1) as the number of foreclosures on mortgages for 
     single family housing and subprime mortgage loans for single 
     family housing that are over 90 days delinquent, occurring in 
     such State during the most recently completed four calendar 
     quarters for which such information is available, as 
     determined by the Secretary, bears to the aggregate number of 
     such foreclosures and such delinquent subprime mortgage loans 
     occurring in all qualified States during such calendar 
     quarters.
       (e) Distribution of Full Amount.--The Secretary shall 
     establish the index referred to in subsection (c) and the 
     grant and loan authority amounts for the qualified States in 
     a manner that provides that--
       (1) the aggregate of the grant amounts for all qualified 
     States is equal to the total amount made available under 
     section 14(a); and
       (2) the aggregate of the loan authority amounts for all 
     qualified States is equal to the aggregate amount of 
     authority for the outstanding principal balance of all loans 
     made under this Act pursuant to section 14(b)(1).
       (f) Requirement To Allocate to Qualified Metropolitan 
     Cities.--Of any grant amounts and loan authority amounts 
     allocated pursuant to this section for a State, such State 
     shall allocate for each qualified metropolitan city located 
     in such State a portion of such grant amounts and such loan 
     authority amounts that bears the same ratio to such grant 
     amounts and loan authority amounts, respectively, allocated 
     for the State as the number of foreclosures on mortgages for 
     single family housing and subprime mortgage loans for single 
     family housing that are over 90 days delinquent, occurring in 
     such qualified metropolitan city during the most recently 
     completed four calendar quarters for which such information 
     is available, as determined by the Secretary, bears to the 
     aggregate number of such foreclosures and such delinquent 
     subprime mortgage loans occurring in the State during such 
     calendar quarters. A State may adjust such allocation to 
     account for differences between median single family housing 
     prices in the State and in qualified metropolitan cities in 
     the State.
       (g) Requirement To Allocate to Qualified Urban Counties.--
     Of any grant amounts and loan authority amounts allocated 
     pursuant to this section for a State, such State shall 
     allocate for each qualified urban county located in such 
     State a portion of such grant amounts and such loan authority 
     amounts that bears the same ratio to such grant amounts and 
     loan authority amounts, respectively, allocated for the State 
     as the number of foreclosures on mortgages for single family 
     housing and subprime mortgage loans for single family housing 
     that are over 90 days delinquent, occurring in such qualified 
     urban county during the most recently completed four calendar 
     quarters for which such information is available, as 
     determined by the Secretary, bears to the aggregate number of 
     such foreclosures and such delinquent subprime mortgage loans 
     occurring in the State during such calendar quarters. A State 
     may adjust such allocation to account for differences between 
     median single family housing prices in the State and in 
     qualified urban counties in the State.
       (h) Allocation Exception.--If the aggregate grant and loan 
     authority amount to be allocated pursuant to subsection (f) 
     or (g) to a qualified metropolitan city or qualified urban 
     county is less than $10,000,000, a State may, but is not 
     required to, allocate such grant and loan authority amount to 
     such qualified metropolitan city or qualified urban county, 
     and the allocation for such State shall be increased by the 
     grant and loan authority amount not allocated to such 
     qualified metropolitan city or qualified urban county.
       (i) Reallocation of Unused Amounts.--The Secretary shall 
     recapture any grant amounts and loan authority amounts 
     allocated to a State that are not used in a timely fashion in 
     accordance with section 10, as the Secretary shall prescribe, 
     and shall reallocate such amounts among all other qualified 
     States in accordance with the provisions of this Act for 
     allocation of grant amounts and loan authority amounts.

     SEC. 6. LOANS.

       (a) Requirement of Loan Authority Amount.--The Secretary 
     may make a loan under this Act for use in the area of an 
     allocation recipient only to the extent and in such amounts 
     that loan authority amounts for such allocation recipient are 
     available.
       (b) Revolving Availability of Loan Authority Amount.--The 
     loan authority amount allocated for each allocation recipient 
     shall--
       (1) upon the Secretary entering into a binding commitment 
     to make a loan under this Act for use in the area of such 
     allocation recipient, be decreased by the amount of the 
     principal obligation of such loan; and
       (2) upon the repayment to the Secretary by any borrower of 
     any principal amounts borrowed under a loan this Act for use 
     in the area of such allocation recipient, be increased by the 
     amount of principal repaid.
       (c) Assisted Entities.--The loan authority amount of an 
     allocation recipient may be used for activities described in 
     section 8(a) undertaken by--
       (1) the allocation recipient;
       (2) a unit of local government or a local governmental 
     entity; or
       (3) any other entity, as provided in the approved plan of 
     the allocation recipient under section 4.
       (d) Loan Terms.--Each loan provided under this Act from the 
     loan authority amount of an allocation recipient shall--
       (1) bear no interest;
       (2) have a term to maturity of--
       (A) 3 years, in the case of any loan made to purchase or 
     finance the purchase of qualified foreclosed housing for use 
     under section 8(a)(1) for homeownership; and
       (B) 5 years, in the case of any loan made to purchase or 
     finance the purchase of qualified foreclosed housing for use 
     under section 8(a)(2) for rental;
       (3) not provide for amortization of the principal 
     obligation of the loan during such term;
       (4) be non-recourse;
       (5) require payment of the original principal obligation 
     under the loan only upon the expiration of the term of the 
     loan; and
       (6) have such other terms and conditions as the Secretary 
     may provide.
       (e) Procedure.--A qualified State or, upon its election, a 
     qualified metropolitan city or qualified urban county shall--
       (1) enter into a loan agreement on behalf of the Secretary 
     on terms established under this Act and any other terms such 
     State, qualified metropolitan city, or qualified urban county 
     determines appropriate;
       (2) disburse the loan amount in accordance with such terms, 
     subject only to the absence of sufficient loan authority 
     amount for such State, such qualified metropolitan city, or 
     such qualified urban county;
       (3) monitor such loans; and
       (4) collect and transmit to the Secretary any loan 
     repayments.
       (f) Eligibility for Repeat Lending.--A loan under this Act 
     may be made to an entity that has previously borrowed amounts 
     under a loan under this Act only if such entity has repaid 90 
     percent or more of the amounts due under all previous such 
     loans. The Secretary may waive such requirement upon a 
     request by an allocation recipient if the borrower has 
     demonstrated satisfactory progress in utilizing outstanding 
     loans and sufficient capacity to utilize additional loan 
     amounts effectively.
       (g) Sunset.--The Secretary may not enter into any 
     commitment to make a loan under this Act, or make any such 
     loan, after the expiration of the 48-month period beginning 
     on the date of the enactment of this Act.

     SEC. 7. GRANTS.

       The grant amount of an allocation recipient may be used 
     under section 8(b) by the allocation recipient, a unit of 
     local government or a local governmental entity, or a 
     nonprofit organization.

     SEC. 8. ELIGIBLE HOUSING STIMULUS ACTIVITIES.

       (a) Loan Amounts.--Amounts provided under a loan under this 
     Act for an allocation recipient shall be used, in accordance 
     with the approved plan of such allocation recipient, only for 
     the following activities:
       (1) Homeownership housing provision.--To purchase or 
     finance the purchase of qualified foreclosed housing for 
     resale as housing for homeownership to families having 
     incomes that do not exceed 140 percent of the median income 
     for the area in which the housing is located.
       (2) Rental housing provision.--To purchase or finance the 
     purchase of qualified foreclosed housing for use as rental, 
     lease-purchase, or rent-to-own housing, subject to the 
     following requirements:
       (A) Qualified tenants.--All dwelling units in the housing 
     purchased or financed using any loan amounts shall be 
     available for rental only by families whose incomes do not 
     exceed 100 percent of the median income for the area in which 
     the housing is located.
       (B) Rents.--Rents for each dwelling unit in the housing 
     purchased or financed using any loan amounts shall be 
     established at amounts that do not exceed market rents for 
     comparable dwelling units located in the area in which the 
     housing is located and in accordance with such requirements 
     as the Secretary shall establish to ensure that rents are 
     established in a fair, objective, and arms-length manner.
       (3) Housing rehabilitation.--To rehabilitate qualified 
     foreclosed housing acquired with assistance provided pursuant 
     to this subsection, to the extent necessary to comply with 
     applicable laws, codes, and other requirements relating to 
     housing safety, quality, and habitability, or to make 
     improvements to the housing to increase the energy efficiency 
     or conservation of the housing or provide a renewable energy 
     source or sources for the housing, for the purpose of 
     reselling the housing, to the extent possible, during the 3-
     month period that begins upon completion of rehabilitation 
     and at a price that is as close as possible to the 
     acquisition price of the housing.
       (b) Grant Amounts.--Grant amounts provided under this Act 
     to an allocation recipient

[[Page 8049]]

     shall be used, in accordance with the approved plan of such 
     allocation recipient, only for the following activities:
       (1) Operating and holding costs.--For costs of holding and 
     operating qualified foreclosed housing acquired pursuant to 
     subsection (a), including costs of management, taxes, 
     handling, insurance, and other related costs.
       (2) Costs relating to property acquisition.--For incidental 
     costs involved in acquiring qualified foreclosed housing 
     pursuant to subsection (a), including reasonable closing 
     costs, except that grant amounts may not be used to pay any 
     portion of the purchase price for the housing under section 
     13(7)(C).
       (3) Administrative costs.--For costs of the allocation 
     recipient in administering loan authority amounts and grant 
     amounts under this Act, except that the amount of grant 
     amounts provided under this Act to an allocation recipient 
     that may be used under this paragraph shall not exceed the 
     amount equal to 8 percent of the sum of the grant amounts 
     provided to the allocation recipient pursuant to subsection 
     (a), (f), or (g) of section 5, as applicable, and the loan 
     authority amount allocated to the allocation recipient 
     pursuant to subsection (b), (f), or (g) of section 5, as 
     applicable.
       (4) Planning costs.--For planning costs of the State in 
     connection with this Act, except that the amount of grant 
     amounts provided under this Act to an allocation recipient 
     that may be used under this paragraph shall not exceed the 
     amount equal to 2 percent of the sum of the grant amounts 
     provided to the allocation recipient pursuant to subsection 
     (a), (f), or (g) of section 5, as applicable, and the loan 
     authority amount allocated to the State pursuant to 
     subsection (b), (f), or (g) of section 5, as applicable.
       (5) Housing rehabilitation.--For activities set forth in 
     subsection (a)(3), except that an allocation recipient shall 
     not use more than 20 percent of a grant amount allocation for 
     such activities.
       (6) Demolition.--For costs of demolishing qualified 
     foreclosed housing that is deteriorated or unsafe, but 
     amounts may be used under this paragraph only if the 
     Secretary determines that the neighborhood or other area in 
     which the housing is located has a high incidence of vacant 
     and abandoned housing (or other vacant and abandoned 
     structures) and is experiencing a significant decline in 
     population.
     Notwithstanding any other provision of this subsection, grant 
     amounts provided under this Act may not be used to provide 
     assistance of any kind (including grants, loans, and closing 
     cost financing) to provide amounts for downpayments for any 
     homebuyers of single family housing.
       (c) Prohibited Uses.--The Secretary shall, by regulation, 
     set forth prohibited uses of grant or loan amounts under this 
     Act, which shall include use for--
       (1) political activities;
       (2) advocacy;
       (3) lobbying, whether directly or through other parties;
       (4) counseling services;
       (5) travel expenses; and
       (6) preparing or providing advice on tax returns.
       (d) Income Targeting Requirement.--
       (1) Very low-income families.--Not less than 50 percent of 
     the total grant amounts an allocation recipient makes 
     available under this Act shall be used for activities under 
     subsection (b) in connection with providing housing for 
     families whose incomes do not exceed 50 percent of the median 
     income for the area in which the housing is located.
       (2) Extremely low-income families.--Not less than 50 
     percent of the total grant amounts an allocation recipient 
     makes available under paragraph (1) shall be used for 
     activities under subsection (b) in connection with providing 
     housing for families whose incomes do not exceed 30 percent 
     of the median income for the area in which the housing is 
     located.
       (3) Waiver.--
       (A) In general.--The Secretary may establish a percentage 
     for purposes of paragraph (2) that is less than 50 percent if 
     an allocation recipient certifies that, in addition to any 
     other requirements the Secretary may establish--
       (i) such allocation recipient has attempted to use all 
     other federally related resources available to it in 
     combination with the resources available under this Act to 
     meet the requirements of paragraph (2); and
       (ii) the failure to comply with paragraph (2) will not 
     result in an overall loss of housing affordable to families 
     whose incomes do not exceed 30 percent of area median income 
     in the area of such allocation recipient.
       (B) Consideration of housing needs.--In establishing an 
     alternative percentage for purposes of paragraph (2) for an 
     allocation recipient that meets the certification 
     requirements of subparagraph (A), the Secretary shall take 
     into consideration the housing needs in the area of such 
     allocation recipient of families whose incomes do not exceed 
     30 percent of area median income.
       (e) Use for Rural Areas.--An allocation recipient receiving 
     any grant or loan amounts under this Act that includes any 
     rural areas shall use a portion of its grant and loan 
     authority amount for eligible activities located in rural 
     areas that is proportionate to the identified need for such 
     activities in such rural areas.
       (f) Security.--A qualified State, or at its election, a 
     qualified metropolitan city or qualified urban county, shall 
     record a lien in the name of the Secretary on any qualified 
     foreclosed housing purchased or financed with a loan under 
     this section in the amount of the principal obligation under 
     the loan and interest due under the loan.
       (g) Qualified Homeowners.--This Act may not be construed to 
     prevent the resale of qualified foreclosed housing to a prior 
     owner or occupant of such housing who meets the income 
     requirements of this Act.
       (h) Voucher Nondiscrimination.--
       (1) Prospective tenants.--A recipient of amounts from a 
     loan or grant under this Act may not refuse to lease a 
     dwelling unit in housing assisted with any such loan or grant 
     amounts to a holder of a voucher or certificate of 
     eligibility under section 8 of the United States Housing Act 
     of 1937 (42 U.S.C. 1437f) because of the status of the 
     prospective tenant as such a holder.
       (2) Current tenants.--In the case of any qualified 
     foreclosed housing for which funds made available under the 
     Act are used and in which a recipient of assistance under 
     section 8(o) of the U.S. Housing Act of 1937 resides at the 
     time of acquisition or financing, the owner and any successor 
     in interest shall be subject to the lease and to the housing 
     assistance payments contract for the occupied unit. Vacating 
     the property prior to sale shall not constitute good cause 
     for termination of the tenancy unless the property is 
     unmarketable while occupied or unless the owner or subsequent 
     purchaser desires the unit for personal or family use. This 
     paragraph shall not preempt any State or local law that 
     provides more protection for tenants.
       (i) Effect of Foreclosure on Preexisting Lease.--
       (1) In general.--In the case of any foreclosure on any 
     dwelling or residential real property acquired with any 
     amounts made available under this Act, any successor in 
     interest in such property pursuant to the foreclosure shall 
     assume such interest subject to--
       (A) the provision, by the successor in interest, of a 
     notice to vacate to any bona fide tenant at least 90 days 
     before the effective date of the notice to vacate; and
       (B) the rights of any bona fide tenant, as of the date of 
     such notice of foreclosure--
       (i) under any bona fide lease entered into before the 
     notice of foreclosure to occupy the premises until the end of 
     the remaining term of the lease or the end of the 6-month 
     period beginning on the date of the notice of foreclosure, 
     whichever occurs first, subject to the receipt by the tenant 
     of the 90-day notice under subparagraph (A); or
       (ii) without a lease or with a lease terminable at will 
     under State law, subject to the receipt by the tenant of the 
     90-day notice under subparagraph (A), except that nothing 
     under this subparagraph shall affect the requirements for 
     termination of any federally subsidized tenancy.
       (2) Bona fide lease or tenancy.--For purposes of this 
     subsection, a lease or tenancy shall be considered bona fide 
     only if--
       (A) the mortgagor under the contract is not the tenant;
       (B) the lease or tenancy was the result of an arms-length 
     transaction; or
       (C) the lease or tenancy requires the receipt of rent that 
     is not substantially less than fair market rent for the 
     property.
       (j) Prohibition of Demolition of Public Housing.--
     Notwithstanding any other provision of this Act, amounts from 
     a grant or loan under this Act may not be used to demolish 
     any public housing (as such term is defined in section 3 of 
     the United States Housing Act of 1937 (42 U.S.C. 1437a)).

     SEC. 9. SHARED APPRECIATION AGREEMENT.

       Notwithstanding any other provision of this Act, no amounts 
     from a loan or grant under this Act may be used under section 
     8 for any qualified foreclosed housing unless such binding 
     agreements are entered into, in accordance with such 
     requirements as the Secretary shall establish, that ensure 
     that the Federal Government shall, upon any sale or 
     disposition of the qualified foreclosed housing by the owner 
     who acquires the housing pursuant to assistance under this 
     Act, receive an amount equal to 20 percent of the difference 
     between the net proceeds from such sale or disposition and 
     the cost of such acquisition of the housing pursuant to 
     assistance under this Act, after deductions for expenditures 
     paid or incurred after the date of such acquisition that are 
     properly chargeable to capital account (within the meaning of 
     section 1016 of the Internal Revenue Code of 1986) with 
     respect to such housing. In the case of a for-profit owner, 
     this section shall be applied by substituting ``50 percent'' 
     for ``20 percent''.

     SEC. 10. SPENDING REQUIREMENTS.

       (a) In General.--Each allocation recipient that receives a 
     grant under this Act or is allocated loan authority amounts 
     under this Act pursuant to section 5(b) shall--
       (1) commence obligation of such grant amounts and 
     commitment of such loan authority amounts not later than the 
     expiration of the 120-day period that begins upon approval of 
     the approved plan of allocation recipient;
       (2) obligate all such grant amounts and enter into 
     commitments for all such loan authority amounts not later 
     than the expiration of the 180-day period beginning upon such 
     approval; and
       (3) except as provided in subsection (b) of this section, 
     outlay all such grant amounts and disburse all such loan 
     authority amounts not later than the 24-month period that 
     begins upon such approval.

     This subsection shall not apply to loan authority amounts of 
     an allocation recipient attributable, pursuant to section 
     6(b)(2), to repayment of principal amounts of loans under 
     this Act.

[[Page 8050]]

       (b) Exception to Spending Requirement.--If an allocation 
     recipient in good faith makes a request, in the plan 
     submitted to the Secretary pursuant to section 4 or otherwise 
     after approval of such plan, for extension of the period 
     referred to in paragraph (1), (2), or (3) of subsection (a) 
     of this section, the Secretary may extend the period for not 
     more than 5 months.

     SEC. 11. SERVICER CONTACT.

       The servicer of a federally related mortgage loan (as such 
     term is defined in section 3 of the Real Estate Settlement 
     Procedures Act of 1974 (12 U.S.C. 2602)) shall notify the 
     unit of general local government in which the property 
     securing the mortgage is located upon becoming responsible 
     for a qualified foreclosed property and provide such unit of 
     general local government with the name and 24-hour contact 
     information of a representative authorized to negotiate 
     purchases.

     SEC. 12. ACCOUNTABILITY.

       (a) Reporting.--Each allocation recipient that receives a 
     grant or allocation of loan authority amount under this Act 
     shall submit a report to the Secretary, not later than the 
     expiration of the 12-month period beginning upon the approval 
     of the qualified plan by the Secretary, regarding use of such 
     amounts which shall contain such information, including 
     information about the location and type of assisted 
     properties and the income of families purchasing or renting 
     housing assisted under this Act, as the Secretary shall 
     require.
       (b) Misuse of Amounts.--If the Secretary determines that 
     any amounts from a grant or loan under this Act for an 
     allocation recipient or other recipient of grant or loans 
     funds has been used in a manner that is in violation of this 
     Act, any regulations issued under this Act, or any 
     requirements or conditions under which such amounts were 
     provided, the Secretary shall require the allocation 
     recipient or other recipient of grant or loans funds to 
     reimburse the Treasury of the United States in the amount of 
     any such misused funds.
       (c) Hold Harmless.--Notwithstanding subsection (b), a State 
     shall not be required to reimburse the Treasury of the United 
     States for any misused funds such State is required to 
     allocate to a qualified metropolitan city or qualified urban 
     county under subsection (f) or (g) of section 5, 
     respectively.

     SEC. 13. DEFINITIONS.

       For purposes of this Act, the following definitions shall 
     apply:
       (1) Allocation recipient.--The term ``allocation 
     recipient'' means--
       (A) a qualified State;
       (B) a qualified metropolitan city; and
       (C) a qualified urban county.
       (2) Allocation recipient administrator.--The term 
     ``allocation recipient administrator'' means the entity that 
     is designated, pursuant to section 4(b)(1), in the approved 
     plan of the allocation recipient to act for the allocation 
     recipient for purposes of this Act.
       (3) Approved plan.--The term ``approved plan'' means a plan 
     of an allocation recipient that has been approved pursuant to 
     section 4.
       (4) Covered multifamily housing.--The term ``covered 
     multifamily housing'' means a residential structure that 
     consists of 64 or fewer dwelling units.
       (5) Loan authority amount.--The term ``loan authority 
     amount'' means, with respect to an allocation recipient, the 
     amount of loan authority available pursuant to section 
     14(b)(1) that is allocated for the allocation recipient 
     pursuant to subsection (b), (f), or (g) of section 5, as 
     applicable, as such amount may be increased or decreased 
     pursuant to section 6(b).
       (6) Nonprofit organization.--The term ``nonprofit 
     organization'' has the meaning given such term in section 104 
     of the Cranston-Gonzalez National Affordable Housing Act (42 
     U.S.C. 12704).
       (7) Qualified foreclosed housing.--The term ``qualified 
     foreclosed housing'' means housing that--
       (A)(i) is single family housing that is not occupied by an 
     owner, pursuant to foreclosure or assignment of the mortgage 
     on the housing or forfeiture of the housing; or
       (ii) is covered multifamily housing;
       (B) is owned by a lender, mortgage company, investor, 
     financial institution, or other such entity, or any 
     government entity, pursuant to foreclosure or assignment of 
     the mortgage on the housing or forfeiture of the housing; and
       (C) has a purchase price--
       (i) in the case of single family housing, that does not 
     exceed 110 percent of the average purchase price for single 
     family housing in the area in which the housing is located, 
     as determined by the Secretary.
       (ii) in the case of covered multifamily housing, that does 
     not exceed the dollar amount limitation, for housing of the 
     applicable size located in the area in which the housing is 
     located, on the amount of a principal obligation of a 
     mortgage eligible for insurance under section 207 of the 
     National Housing Act (12 U.S.C. 1713), as in effect on the 
     date of the enactment of this Act pursuant to such section 
     207(c)(3)(A) and section 206A of such Act (12 U.S.C. 1712a).
       (8) Qualified metropolitan city.--The term ``qualified 
     metropolitan city'' means an incorporated place, for which 
     there is an improved plan, that--
       (A) is among the 100 most populous incorporated places in 
     the United States, as determined according to data from the 
     most recent decennial census that is published before the 
     date of the enactment of this Act; or
       (B)(i) has a minimum population of 50,000, as determined 
     according to data from the most recent decennial census that 
     is published before the date of the enactment of this Act; 
     and
       (ii) has a foreclosure rate that exceeds 125 percent of the 
     foreclosure rate for the entire State
       (9) Qualified state.--The term ``qualified State'' means a 
     State for which there is an approved plan.
       (10) Qualified urban county.--The term ``qualified urban 
     county'' means an urban county (as such term is defined in 
     section 102 of the Housing and Community Development Act of 
     1974 (42 U.S.C. 5302)), for which there is an approved plan, 
     that is among the 50 most populous urban counties in the 
     United States, as determined--
       (A) according to data from the most recent decennial 
     census; and
       (B) excluding the population of any qualified metropolitan 
     city within such urban county, unless such metropolitan city 
     has agreed to have its population included with the 
     population of the county for the purposes of this Act.
       (11) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development.
       (12) Single family housing.--The term ``single family 
     housing'' means a residential structure consisting of from 
     one to four dwelling units.
       (13) State.--The term ``State'' means any State of the 
     United States, the District of Columbia, the Commonwealth of 
     Puerto Rico, the Commonwealth of the Northern Mariana 
     Islands, Guam, the Virgin Islands, American Samoa, and other 
     territory or possession of the United States.

     SEC. 14. FUNDING.

       (a) Grants.--There is authorized to be appropriated to the 
     Secretary of the Treasury $7,500,000,000 for grants under 
     this Act.
       (b) Direct Loans.--
       (1) Loan commitment authority limitation.--Subject only to 
     the availability of sufficient amounts for the costs (as such 
     term is defined in section 502 of the Federal Credit Reform 
     Act of 1990 (2 U.S.C. 661a)) of such loans and the absence of 
     qualified requests for loans, the Secretary shall enter into 
     commitments to make loans under this Act, and shall make such 
     loans, in an amount such that the aggregate outstanding 
     principal balance of such loans does not at any time exceed 
     $7,500,000,000.
       (2) Authorization of appropriations for costs.--There is 
     authorized to be appropriated such sums as may be necessary 
     for costs (as such term is defined in section 502 of the 
     Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) of loans 
     under this Act.

     SEC. 15. REGULATIONS AND IMPLEMENTATION.

       (a) Regulations.--The Secretary shall issue any regulations 
     necessary to carry out this Act.
       (b) Implementation.--Pending the effectiveness of 
     regulations issued pursuant to subsection (a), the Secretary 
     shall take such action as may be necessary to implement this 
     Act by notice, guidance, and interim rules.

  The Acting CHAIRMAN. No amendment to the committee amendment is in 
order except those printed in House report 110-621. Each amendment may 
be offered only in the order printed in the report, by a Member 
designated in the report, shall be considered read, shall be debatable 
for the time specified in the report, equally divided and controlled by 
the proponent and an opponent of the amendment, shall not be subject to 
amendment, and shall not be subject to a demand for division of the 
question.


                 Amendment No. 1 Offered by Ms. Waters

  The Acting CHAIRMAN. It is now in order to consider amendment No. 1 
printed in House Report 110-621.
  Ms. WATERS. Madam Chairwoman, I have an amendment at the desk that 
has been made in order under the rule.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 1 offered by Ms. Waters:
       Page 3, line 10, after ``STATES'' insert ``, METROPOLITAN 
     CITIES, AND URBAN COUNTIES''.
       Page 3, line 13, after ``States'' insert ``and under 
     subsections (f) and (g) of section 5 to qualified 
     metropolitan cities and qualified urban counties, 
     respectively,''.
       Page 3, line 15, after ``States'' insert ``, qualified 
     metropolitan cities, and qualified urban counties''.
       Page 3, line 19, after ``State'' insert ``, metropolitan 
     city, or urban county''.
       Page 3, line 20, after ``State'' insert ``, metropolitan 
     city, or urban county''.
       Strike ``A State'' in line 23 on page 3 and all that 
     follows through page 4, line 2.
       Page 12, line 16, strike ``, such State'' and insert ``the 
     Secretary''.
       Page 13, line 4, strike ``A State may'' and insert ``The 
     Secretary shall''.
       Page 13, line 23, strike ``A State may'' and insert ``The 
     Secretary shall''.
       Page 14, line 4, strike ``a State'' and insert ``the 
     Secretary''.
       Page 16, lines 18 and 19, strike ``or, upon its election''.
       Page 16, line 19, strike ``or'' and insert ``, and a''.
       Page 19, line 24, strike ``costs of'' and insert ``expenses 
     incurred operating housing assisted under this Act with 
     respect to the

[[Page 8051]]

     administration, maintenance, repair, security, utilities, 
     fuel, furnishings, equipment,''.
       Strike line 23 on page 32 and all that follows through page 
     33, line 2, and insert the following:
       (i) in the case of single family housing, that does not 
     exceed the lesser of--

       (I) 110 percent of the average purchase price for single 
     family housing in the area in which the housing is located, 
     as determined by the Secretary; or
       (II) the current appraised value of the property;

     except that in the case of any such housing that has an 
     appraised value that is less than 110 percent of the average 
     purchase price for single family housing in the area in which 
     the housing is located, an allocation recipient may appeal 
     such appraisal to the Secretary and the Secretary may 
     determine that the average purchase price shall operate as 
     the cap on the purchase price; and

  The Acting CHAIRMAN. Pursuant to House Resolution 1174, the 
gentlewoman from California (Ms. Waters) and a Member opposed each will 
control 5 minutes.
  The Chair recognizes the gentlewoman from California.
  Ms. WATERS. Madam Chairman, I yield myself as much time as I may 
consume.
  This manager's amendment is in the nature of a perfecting amendment 
that makes a few changes to the bill that I hope will be relatively 
uncontroversial.
  First, as this bill has moved through the process, we have moved from 
a program that allocated all of the funds to States to administer to 
one that, as I described in my opening statement, distributes funds to 
States, certain metropolitan cities and large urban counties.
  This amendment simply removes the State as the middle person in 
allocations to qualifying cities and counties which would instead 
receive direct allocations from HUD. This will expedite the 
distribution of funds which is critical in the context of economic 
stimulus.
  Second, the amendment brings a definition of operating costs of 
housing purchased under the program, which is an eligible use under the 
grant component in line with similar uses in other HUD programs such as 
the McKinney-Vento Homeless Assistance Act. This just clarifies what is 
and is not an eligible expense when an entity is operating a purchase 
property as rental property or preparing it for resale.
  Finally, to further address the concerns that this bill somehow 
provides a bailout to lenders, the amendment caps the purchase price of 
foreclosed properties at the appraised price or 110 percent of the 
average local single family home price, whichever is less. This guards 
against property owners gaming the system to obtain inflated prices 
under the program.
  I urge my colleagues to vote for this amendment.
  I reserve the balance of my time.
  Mrs. CAPITO. Madam Chairman, I would like to claim time in opposition 
to the amendment.
  The Acting CHAIRMAN. The gentlewoman from West Virginia is recognized 
for 5 minutes.
  Mrs. CAPITO. Thank you.
  While I appreciate the chairwoman's amendment, and I do believe that 
it does go in a direction that is much better for the bill, I still 
have, as I have voiced in the earlier debate, serious concerns about 
the bill in terms of the cost and in terms of taxpayers' dollars 
bailing out investors and lenders. This does not go to individual 
homeowners. It does not help somebody in foreclosure, an individual 
family in foreclosure.
  And so with that, I would urge a ``no'' vote on the amendment.
  I yield back the balance of my time.
  Ms. WATERS. Madam Chairwoman, I was hopeful that the ranking member 
of the subcommittee would offer support for this amendment. I know that 
there are some differences that she has and others have on this bill.
  However, the attempts that we have made to make sure that it is a 
bill that can operate efficiently, such as identifying those 100 
cities, those 100 counties and those 50 cities of a certain size would 
be the kind of amendment that the ranking member and others would 
understand makes this a better bill and would formulate ways by which 
it could efficiently and effectively get that money into the 
communities that are needed.
  Madam Chairman, I yield back the balance of my time.
  The Acting CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from California (Ms. Waters).
  The question was taken; and the Acting Chairman announced that the 
ayes appeared to have it.
  Mrs. CAPITO. Madam Chairman, I demand a recorded vote.
  The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, further 
proceedings on the amendment offered by the gentlewoman from California 
will be postponed.


                 Amendment No. 2 Offered by Mrs. Capito

  The Acting CHAIRMAN. It is now in order to consider amendment No. 2 
printed in House Report 110-621.
  Mrs. CAPITO. Madam Chairman, I offer an amendment.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 2 offered by Mrs. Capito:
       Page 3, line 16, after the period insert the following: 
     ``The program under this Act shall be administered through 
     the Office of Community Planning and Development of the 
     Department of Housing and Urban Development or any successor 
     office responsible for administering the community 
     development block grant program under title I of the Housing 
     and Community Development Act of 1974 (42 U.S.C. 5301 et 
     seq.).''.

  The Acting CHAIRMAN. Pursuant to House Resolution 1174, the 
gentlewoman from West Virginia (Mrs. Capito) and a Member opposed each 
will control 5 minutes.
  The Chair recognizes the gentlewoman from West Virginia.
  Mrs. CAPITO. Madam Chairman, my amendment is really quite simple. As 
we have heard myself talking and Members on my side of the aisle 
talking about the difficulties that we have with the bill, I realize 
that the odds are with it that it may pass out of this House. With that 
in mind, I would like to offer this amendment to what I think makes the 
bill better.
  My amendment would very simply direct the funds to be administered 
through the Office of Community Planning and Development of the 
Department of Housing and Urban Development. This office already 
oversees the HOME and CDBG programs which we are very familiar with.
  One of the concerns that we had with the bill was creating a whole 
new bureaucracy within HUD to administer this program if it were to go 
forward. And that is problematic any time you are creating a new 
bureaucracy, particularly when you are replicating some of the delivery 
systems that already exist within HUD. Those delivery systems exist in 
the Office of Community Planning and Development.
  So with that, I would like to say that rather than the current 
language which just merely directs the Secretary to implement the 
program, I would prefer, and my amendment offers to direct those funds 
to be administered by the existing Office of Community Planning and 
Development within HUD which deals, as I said, with the CDBG program 
which we are all very familiar with working in a lot of our 
communities.
  With that, I yield back the balance of my time.
  Ms. WATERS. Madam Chairman, I rise to claim time in opposition.
  The Acting CHAIRMAN. The gentlewoman from California is recognized 
for 5 minutes.
  Ms. WATERS. Although I rise to claim time in opposition, I am not 
opposed to the amendment.
  I think the ranking member of the Housing and Community Opportunity 
Subcommittee has made a sound addition to the bill here. While, as I 
mentioned in my opening statement, we did not want HUD to get bogged 
down in processing 1,200 different plans from all the entitlement 
jurisdictions in the HOME and CDBG programs, there is no question that 
the expertise at HUD to administer this bill's loan and rent program 
lies in the Community Planning and Development division of the agency. 
So I urge my colleagues to support Mrs. Capito's amendment to ensure 
that we don't create an unnecessary new bureaucracy if H.R. 5818 is 
passed into law.
  I yield back the balance of my time.

[[Page 8052]]

  The Acting CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from West Virginia (Mrs. Capito).
  The question was taken; and the Acting Chairman announced that the 
ayes appeared to have it.
  Mrs. CAPITO. Madam Chairman, I demand a recorded vote.
  The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, further 
proceedings on the amendment offered by the gentlewoman from West 
Virginia will be postponed.


                 Motion to Rise Offered by Mr. Simpson

  Mr. SIMPSON. Madam Chairman, I move that the Committee do now rise.
  The Acting CHAIRMAN. The question is on the motion to rise.
  The question was taken; and the Acting Chairman announced that the 
noes appeared to have it.


                             Recorded Vote

  Mr. SIMPSON. Madam Chairman, I demand a recorded vote.
  A recorded vote was ordered.
  The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, this 15-
minute vote will be followed by 5-minute votes on amendment No. 1 by 
Ms. Waters and amendment No. 2 by Mrs. Capito.
  The vote was taken by electronic device, and there were--ayes 184, 
noes 231, not voting 23, as follows:

                             [Roll No. 292]

                               AYES--184

     Akin
     Alexander
     Bachmann
     Bachus
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Biggert
     Bilbray
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehner
     Bonner
     Bono Mack
     Boozman
     Boustany
     Brady (TX)
     Broun (GA)
     Brown (SC)
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp (MI)
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Coble
     Cole (OK)
     Conaway
     Crenshaw
     Cubin
     Culberson
     Davis (KY)
     Davis, David
     Davis, Tom
     Deal (GA)
     Dent
     Diaz-Balart, L.
     Doolittle
     Drake
     Dreier
     Duncan
     Emerson
     English (PA)
     Everett
     Fallin
     Feeney
     Ferguson
     Flake
     Forbes
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gilchrest
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Gordon
     Granger
     Graves
     Hall (TX)
     Hastings (WA)
     Hayes
     Heller
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hulshof
     Hunter
     Inglis (SC)
     Issa
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Jordan
     Keller
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline (MN)
     Knollenberg
     Kuhl (NY)
     LaHood
     Lamborn
     Latham
     LaTourette
     Latta
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     McCarthy (CA)
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McKeon
     McMorris Rodgers
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Murphy, Tim
     Musgrave
     Myrick
     Neugebauer
     Nunes
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Regula
     Rehberg
     Reichert
     Renzi
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Roskam
     Ryan (WI)
     Sali
     Scalise
     Schmidt
     Sensenbrenner
     Sessions
     Shadegg
     Shays
     Shimkus
     Shuster
     Simpson
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Sullivan
     Taylor
     Thornberry
     Tiahrt
     Tiberi
     Upton
     Walberg
     Walden (OR)
     Walsh (NY)
     Wamp
     Weldon (FL)
     Weller
     Westmoreland
     Whitfield (KY)
     Wilson (NM)
     Wilson (SC)
     Wittman (VA)
     Wolf
     Young (FL)

                               NOES--231

     Abercrombie
     Ackerman
     Allen
     Altmire
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Barrow
     Becerra
     Berkley
     Berman
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Bordallo
     Boren
     Boswell
     Boucher
     Boyd (FL)
     Boyda (KS)
     Brady (PA)
     Braley (IA)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardoza
     Carnahan
     Carney
     Carson
     Castor
     Cazayoux
     Chandler
     Clarke
     Clay
     Cleaver
     Clyburn
     Cohen
     Cooper
     Costello
     Courtney
     Cramer
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis, Lincoln
     DeGette
     Delahunt
     DeLauro
     Diaz-Balart, M.
     Dingell
     Doggett
     Donnelly
     Doyle
     Edwards
     Ehlers
     Ellison
     Ellsworth
     Emanuel
     Engel
     Eshoo
     Etheridge
     Faleomavaega
     Farr
     Fattah
     Filner
     Foster
     Frank (MA)
     Gerlach
     Giffords
     Gillibrand
     Gonzalez
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hare
     Harman
     Hastings (FL)
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hinojosa
     Hirono
     Hodes
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)
     Johnson, E. B.
     Jones (OH)
     Kagen
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kilpatrick
     Kind
     Klein (FL)
     Kucinich
     Lampson
     Langevin
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Loebsack
     Lofgren, Zoe
     Lowey
     Lynch
     Mahoney (FL)
     Maloney (NY)
     Markey
     Matheson
     Matsui
     McCarthy (NY)
     McCollum (MN)
     McDermott
     McGovern
     McIntyre
     McNerney
     McNulty
     Meek (FL)
     Meeks (NY)
     Melancon
     Michaud
     Miller (NC)
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (KS)
     Moran (VA)
     Murphy (CT)
     Murphy, Patrick
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Norton
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Perlmutter
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rahall
     Ramstad
     Reyes
     Rodriguez
     Ros-Lehtinen
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shea-Porter
     Sherman
     Shuler
     Sires
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Space
     Spratt
     Stark
     Stupak
     Sutton
     Tanner
     Tauscher
     Terry
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Tsongas
     Turner
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Walz (MN)
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Wilson (OH)
     Woolsey
     Wu
     Wynn
     Yarmuth

                             NOT VOTING--23

     Aderholt
     Bean
     Berry
     Campbell (CA)
     Christensen
     Conyers
     Costa
     DeFazio
     Dicks
     Fortenberry
     Fortuno
     Marshall
     Paul
     Rangel
     Reynolds
     Richardson
     Royce
     Rush
     Saxton
     Speier
     Tancredo
     Wexler
     Young (AK)


                  Announcement by the Acting Chairman

  The Acting CHAIRMAN (during the vote). Members have 2 minutes 
remaining in this vote.

                              {time}  2132

  Messrs. EDWARDS, SERRANO, McNERNEY, WAXMAN, Ms. WATSON, Ms. 
SCHAKOWSKY and Mr. SKELTON changed their vote from ``aye'' to ``no.''
  Messrs. PORTER, KIRK, WALBERG, and WELLER of Illinois changed their 
vote from ``no'' to ``aye.''
  So the motion to rise was rejected.
  The result of the vote was announced as above recorded.
  Stated for:
  Mr. ROYCE. Madam Chairman, on rollcall No. 292, I was unavoidably 
detained. Had I been present, I would have voted ``aye.''


                 Amendment No. 1 Offered by Ms. Waters

  The Acting CHAIRMAN. The unfinished business is the demand for a 
recorded vote on the amendment printed in House Report 110-621 offered 
by the gentlewoman from California (Ms. Waters) on which further 
proceedings were postponed and on which the ayes prevailed by voice 
vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.


                             Recorded Vote

  The Acting CHAIRMAN. A recorded vote has been demanded.
  A recorded vote was ordered.
  The Acting CHAIRMAN. This is a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 256, 
noes 157, not voting 25, as follows:

                             [Roll No. 293]

                               AYES--256

     Abercrombie
     Ackerman
     Allen
     Altmire
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Biggert
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Bordallo
     Boren
     Boswell
     Boucher
     Boyd (FL)
     Boyda (KS)
     Brady (PA)
     Braley (IA)
     Brown, Corrine
     Buchanan
     Butterfield
     Capito
     Capps
     Capuano
     Cardoza
     Carnahan
     Carney
     Carson
     Castor
     Cazayoux
     Chabot
     Chandler
     Clarke
     Clay
     Cleaver
     Clyburn
     Cohen
     Conyers
     Cooper
     Costello
     Courtney
     Cramer
     Crenshaw
     Crowley
     Cubin
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis, Lincoln
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Dingell
     Doggett
     Donnelly
     Doyle
     Edwards
     Ehlers
     Ellison
     Ellsworth
     Emanuel
     Engel
     English (PA)
     Eshoo
     Etheridge
     Faleomavaega
     Farr
     Ferguson
     Filner
     Fortenberry

[[Page 8053]]


     Fortuno
     Frank (MA)
     Gerlach
     Giffords
     Gillibrand
     Gonzalez
     Gordon
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hare
     Harman
     Hastings (FL)
     Hayes
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hinojosa
     Hirono
     Hodes
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)
     Johnson, E. B.
     Jones (NC)
     Kagen
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kilpatrick
     Kind
     Klein (FL)
     Kucinich
     LaHood
     Lampson
     Langevin
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Loebsack
     Lofgren, Zoe
     Lowey
     Lynch
     Mahoney (FL)
     Maloney (NY)
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (NY)
     McCaul (TX)
     McCollum (MN)
     McDermott
     McGovern
     McIntyre
     McNerney
     McNulty
     Meek (FL)
     Meeks (NY)
     Melancon
     Michaud
     Miller (NC)
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murphy (CT)
     Murphy, Patrick
     Murtha
     Musgrave
     Nadler
     Napolitano
     Neal (MA)
     Norton
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Perlmutter
     Peterson (MN)
     Platts
     Pomeroy
     Porter
     Price (NC)
     Rahall
     Ramstad
     Reichert
     Reyes
     Rodriguez
     Ros-Lehtinen
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schiff
     Schmidt
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shays
     Shea-Porter
     Sherman
     Shuler
     Sires
     Skelton
     Slaughter
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Solis
     Space
     Spratt
     Stark
     Stupak
     Sutton
     Tanner
     Tauscher
     Taylor
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Tsongas
     Turner
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Walsh (NY)
     Walz (MN)
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Wilson (OH)
     Woolsey
     Wu
     Wynn
     Yarmuth

                               NOES--157

     Akin
     Alexander
     Bachmann
     Bachus
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bilbray
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehner
     Bonner
     Bono Mack
     Boozman
     Boustany
     Brady (TX)
     Broun (GA)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp (MI)
     Cannon
     Cantor
     Carter
     Castle
     Coble
     Cole (OK)
     Conaway
     Davis, David
     Davis, Tom
     Deal (GA)
     Doolittle
     Drake
     Dreier
     Duncan
     Emerson
     Everett
     Fallin
     Feeney
     Flake
     Forbes
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gilchrest
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Granger
     Graves
     Hall (TX)
     Hastings (WA)
     Heller
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hulshof
     Hunter
     Inglis (SC)
     Issa
     Johnson (IL)
     Johnson, Sam
     Jordan
     Keller
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline (MN)
     Knollenberg
     Kuhl (NY)
     Lamborn
     Latham
     LaTourette
     Latta
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     McCarthy (CA)
     McCotter
     McCrery
     McHenry
     McHugh
     McKeon
     McMorris Rodgers
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Murphy, Tim
     Myrick
     Neugebauer
     Nunes
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Poe
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Regula
     Rehberg
     Renzi
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Roskam
     Ryan (WI)
     Sali
     Scalise
     Sensenbrenner
     Sessions
     Shadegg
     Shimkus
     Shuster
     Simpson
     Smith (NE)
     Souder
     Stearns
     Sullivan
     Terry
     Thornberry
     Tiahrt
     Tiberi
     Upton
     Walberg
     Walden (OR)
     Wamp
     Westmoreland
     Whitfield (KY)
     Wilson (NM)
     Wilson (SC)
     Wittman (VA)
     Wolf
     Young (FL)

                             NOT VOTING--25

     Aderholt
     Berry
     Campbell (CA)
     Christensen
     Costa
     Cuellar
     Culberson
     Davis (KY)
     Fattah
     Foster
     Jones (OH)
     Paul
     Rangel
     Reynolds
     Richardson
     Royce
     Rush
     Saxton
     Schwartz
     Speier
     Tancredo
     Weldon (FL)
     Weller
     Wexler
     Young (AK)


                  Announcement by the Acting Chairman

  The Acting CHAIRMAN (during the vote). Members have less than 2 
minutes remaining in this vote.

                              {time}  2140

  So the amendment was agreed to.
  The result of the vote was announced as above recorded.
  Stated for:
  Ms. SCHWARTZ. Madam Chairman, on rollcall No. 293, the Waters/Frank 
amendment, I was unavoidably detained. Had I been present, I would have 
voted ``aye.''
  Stated against:
  Mr. ROYCE. Madam Chairman, on rollcall No. 293, I was unavoidably 
detained. Had I been present, I would have voted ``no.''


                 Amendment No. 2 Offered by Mrs. Capito

  The Acting CHAIRMAN. The unfinished business is the demand for a 
recorded vote on the amendment printed in House Report 110-621 offered 
by the gentlewoman from West Virginia (Mrs. Capito) on which further 
proceedings were postponed and on which the ayes prevailed by voice 
vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.


                             Recorded Vote

  The Acting CHAIRMAN. A recorded vote has been demanded.
  A recorded vote was ordered.
  The Acting CHAIRMAN. This is a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 425, 
noes 0, not voting 13, as follows:

                             [Roll No. 294]

                               AYES--425

     Abercrombie
     Ackerman
     Aderholt
     Akin
     Alexander
     Allen
     Altmire
     Andrews
     Arcuri
     Baca
     Bachmann
     Bachus
     Baird
     Baldwin
     Barrett (SC)
     Barrow
     Bartlett (MD)
     Barton (TX)
     Bean
     Becerra
     Berkley
     Berman
     Biggert
     Bilbray
     Bilirakis
     Bishop (GA)
     Bishop (NY)
     Bishop (UT)
     Blackburn
     Blumenauer
     Blunt
     Boehner
     Bonner
     Bono Mack
     Boozman
     Bordallo
     Boren
     Boswell
     Boucher
     Boustany
     Boyd (FL)
     Boyda (KS)
     Brady (PA)
     Brady (TX)
     Braley (IA)
     Broun (GA)
     Brown (SC)
     Brown, Corrine
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Burton (IN)
     Butterfield
     Buyer
     Calvert
     Camp (MI)
     Cannon
     Cantor
     Capito
     Capps
     Capuano
     Cardoza
     Carnahan
     Carney
     Carson
     Carter
     Castle
     Castor
     Cazayoux
     Chabot
     Chandler
     Clarke
     Clay
     Cleaver
     Clyburn
     Coble
     Cohen
     Cole (OK)
     Conaway
     Conyers
     Cooper
     Costa
     Costello
     Courtney
     Cramer
     Crenshaw
     Crowley
     Cubin
     Cuellar
     Culberson
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis (KY)
     Davis, David
     Davis, Lincoln
     Davis, Tom
     Deal (GA)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Dingell
     Doggett
     Donnelly
     Doolittle
     Doyle
     Drake
     Dreier
     Duncan
     Edwards
     Ehlers
     Ellison
     Ellsworth
     Emanuel
     Emerson
     Engel
     English (PA)
     Eshoo
     Etheridge
     Everett
     Faleomavaega
     Fallin
     Farr
     Fattah
     Feeney
     Ferguson
     Filner
     Flake
     Forbes
     Fortenberry
     Fortuno
     Fossella
     Foster
     Foxx
     Frank (MA)
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Giffords
     Gilchrest
     Gillibrand
     Gingrey
     Gohmert
     Gonzalez
     Goode
     Goodlatte
     Gordon
     Granger
     Graves
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hall (TX)
     Hare
     Harman
     Hastings (FL)
     Hastings (WA)
     Hayes
     Heller
     Hensarling
     Herger
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hinojosa
     Hirono
     Hobson
     Hodes
     Hoekstra
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Hulshof
     Hunter
     Inglis (SC)
     Inslee
     Israel
     Issa
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)
     Johnson (IL)
     Johnson, E. B.
     Johnson, Sam
     Jones (NC)
     Jones (OH)
     Jordan
     Kagen
     Kanjorski
     Kaptur
     Keller
     Kennedy
     Kildee
     Kilpatrick
     Kind
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline (MN)
     Knollenberg
     Kucinich
     Kuhl (NY)
     LaHood
     Lamborn
     Lampson
     Langevin
     Larsen (WA)
     Larson (CT)
     Latham
     LaTourette
     Latta
     Lee
     Levin
     Lewis (CA)
     Lewis (GA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Loebsack
     Lofgren, Zoe
     Lowey
     Lucas
     Lungren, Daniel E.
     Lynch
     Mack
     Mahoney (FL)
     Maloney (NY)
     Manzullo
     Marchant
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (CA)
     McCarthy (NY)
     McCaul (TX)
     McCollum (MN)
     McCotter
     McCrery
     McDermott
     McGovern
     McHenry
     McHugh
     McIntyre
     McKeon
     McMorris Rodgers
     McNerney
     McNulty
     Meek (FL)
     Meeks (NY)
     Melancon
     Mica
     Michaud
     Miller (FL)
     Miller (MI)
     Miller (NC)
     Miller, Gary
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (KS)
     Moran (VA)
     Murphy (CT)
     Murphy, Patrick
     Murphy, Tim
     Murtha
     Musgrave
     Myrick
     Nadler
     Napolitano
     Neal (MA)
     Neugebauer
     Norton
     Nunes
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Pearce
     Pence
     Perlmutter
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Pomeroy

[[Page 8054]]


     Porter
     Price (GA)
     Price (NC)
     Pryce (OH)
     Putnam
     Radanovich
     Rahall
     Ramstad
     Rangel
     Regula
     Rehberg
     Reichert
     Renzi
     Reyes
     Rodriguez
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roskam
     Ross
     Rothman
     Roybal-Allard
     Royce
     Ruppersberger
     Ryan (OH)
     Ryan (WI)
     Salazar
     Sali
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Scalise
     Schakowsky
     Schiff
     Schmidt
     Schwartz
     Scott (GA)
     Scott (VA)
     Sensenbrenner
     Serrano
     Sessions
     Sestak
     Shadegg
     Shays
     Shea-Porter
     Sherman
     Shimkus
     Shuler
     Shuster
     Simpson
     Sires
     Skelton
     Slaughter
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Solis
     Souder
     Space
     Spratt
     Stark
     Stearns
     Stupak
     Sullivan
     Sutton
     Tanner
     Tauscher
     Taylor
     Terry
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Tiahrt
     Tiberi
     Tierney
     Towns
     Tsongas
     Turner
     Udall (CO)
     Udall (NM)
     Upton
     Van Hollen
     Velazquez
     Visclosky
     Walberg
     Walden (OR)
     Walsh (NY)
     Walz (MN)
     Wamp
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Weldon (FL)
     Weller
     Westmoreland
     Wexler
     Whitfield (KY)
     Wilson (NM)
     Wilson (OH)
     Wilson (SC)
     Wittman (VA)
     Wolf
     Woolsey
     Wu
     Wynn
     Yarmuth
     Young (FL)

                             NOT VOTING--13

     Berry
     Campbell (CA)
     Christensen
     Klein (FL)
     Paul
     Reynolds
     Richardson
     Rush
     Saxton
     Speier
     Tancredo
     Welch (VT)
     Young (AK)


                  Announcement by the Acting Chairman

  The Acting CHAIRMAN (during the vote). Members are advised there are 
less than 2 minutes remaining in this vote.

                              {time}  2150

  Mr. BERMAN changed his vote from ``no'' to ``aye.''
  So the amendment was agreed to.
  The result of the vote was announced as above recorded.
  (By unanimous consent, Mr. Hoyer was allowed to speak out of order.)


                          Legislative Program

  Mr. HOYER. Ladies and gentlemen, after consultation with the minority 
leadership, we will not be having any more votes tonight, it is my 
understanding. That's a happier announcement, I know, so I thought I 
would make it, trying to even things out here.
  We will have a suspension vote at the end of the consideration of the 
Waters bill. The votes will be rolled until tomorrow, and so that there 
will be no more votes tonight. There will be a suspension vote, but the 
minority has indicated that there will not be a vote on that suspension 
bill.
  We will then, tomorrow, finish the votes on the Waters bill, and then 
go to the Franks housing bill and complete that tomorrow. My 
expectation is we are probably talking somewhere in the neighborhood of 
4 o'clock tomorrow, assuming that things are nice and pleasant and 
peaceful.
  Have a good night's sleep.


           Amendment No. 3 Offered by Mr. Mahoney of Florida

  The Acting CHAIRMAN. It is now in order to consider amendment No. 3 
printed in House Report 110-621.
  Mr. MAHONEY of Florida. Madam Chairman, I have an amendment at the 
desk made in order under the rule.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 3 offered by Mr. Mahoney of Florida:
       Page 36, after line 2, insert the following:

     SEC. 15. PROTECTION OF RIGHT TO BEAR ARMS.

       Nothing in this Act shall affect the right to bear arms 
     under the Second Amendment to the Constitution of the United 
     States.
       Page 36, line 3, strike ``15'' and insert ``16''.

  The Acting CHAIRMAN. Pursuant to House Resolution 1174, the gentleman 
from Florida (Mr. Mahoney) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Florida.
  Mr. MAHONEY of Florida. Madam Chairman, I yield myself such time as I 
may consume.
  I rise today to offer an amendment to H.R. 5818, the Neighborhood 
Stabilization Act of 2008. During the past few months, Americans have 
woken up every morning and encountered headlines in their local 
newspapers similar to those in my hometown papers. Home sales hit low 
in February. Late loan payments highest since 1992; and foreclosures 
skyrocket.
  I'd like to thank Chairwoman Waters and Chairman Frank for their 
commitment to address the housing market crisis gripping our Nation and 
of my beloved Florida. With their leadership, the legislation we're 
going to pass in the coming days brings hope to millions at home who 
are being hit especially hard, as much of Florida's economy is 
dependent on home construction and property development.
  Right now, thousands of Floridians are out of work and unable to pay 
their mortgage, turning an economic downturn into a crisis for working 
families and their communities.
  Florida homeowners are being hit especially hard because of the 
staggering cost of property taxes, skyrocketing insurance premiums and 
increased mortgage payments. This toxic cocktail has forced many home 
owners to make difficult decisions. Our seniors are being forced to 
decide between paying their mortgages and purchasing lifesaving 
medications.
  Likewise, working families are confronted with the challenges of 
putting food on the table, supporting their children's education, and 
paying their mortgage.
  In the eight counties I represent, there are approximately 13,500 
homes in pre-foreclosure, meaning that homeowners have missed at least 
one of their mortgage payments. To give you a better perspective, Madam 
Chairman, how deep the problem is in my district, there are 
approximately 245,000 single family homes in the area that I represent.

                              {time}  2200

  That means about 5\1/2\ percent of the homes in my district are in 
foreclosure. Every foreclosure serves to further drive down the values 
of every homeowner in the neighborhood. In addition to the personal 
tragedies faced by families confronting foreclosure or falling home 
values are States, counties, and towns that are facing another crisis.
  According to the Department of Commerce, approximately 200,000 new 
homes are sitting empty throughout the United States. Harvard 
University's Joint Center for Housing Studies found that partially 
completed or vacant developments reduce tax revenue for cities and 
towns and hurt businesses. Likewise, a report authored by the U.S. 
Conference of Mayors found that the rising foreclosures and falling 
property values may cut tax revenues by more than $6.6 billion for the 
ten States, including my home State of Florida. This means fewer 
police, firemen, and teachers. It means fewer parks and after school 
programs.
  The crisis has already pushed Florida into a recession, and the State 
already has to deal with a decrease in tax revenue. The State, which 
just finished its budget, had to make difficult decisions. Nursing 
homes in the State charged with taking care of our seniors will face a 
$163.7 million reduction in what they're paid to take care of residents 
on Medicaid.
  The legislature voted to increase taxes by imposing $200 million in 
user fees on our State citizens. Likewise, spending on education in 
Florida will drop by $131 per student. These cuts come at a time when 
it is more important than ever to invest in our children who will have 
to compete in the global economy.
  H.R. 5818 will establish a $15 billion HUD administered grant program 
for the purchase and rehabilitation of owner-vacated foreclosed homes 
with the goal of stabilizing and occupying them as soon as possible. By 
doing so, we will ensure that the value of the properties and those 
surrounding them will not continue to free fall.
  Madam Chairman, my amendment today is very straightforward. It 
clarifies that nothing in the underlying bill before us today restricts 
anyone's right to bear arms under the second amendment. This language 
ensures that those States, localities, and organizations receiving 
loans and grants under this law cannot, let me repeat, cannot place any 
restrictions on the properties they purchase or maintain that would 
infringe upon a person's second amendment rights.

[[Page 8055]]

  I ask my colleagues to support this commonsense amendment, and I 
reserve the balance of my time.
  Mr. BACHUS. Madam Chairman, I rise to claim the time in opposition. I 
am not in opposition, but I plan to speak in the allotted 5 minutes.
  The Acting CHAIRMAN. Without objection, the gentleman from Alabama is 
recognized for 5 minutes.
  There was no objection.
  Mr. BACHUS. Madam Chairman, throughout this debate, the Bear Stearns 
matter has been invoked by Members of the majority who have called 
forth the bailout of the Bear Stearns counterparties, not of Bear 
Stearns but of the counterparties, as a reason to bail out lenders in 
this case. And basically, what they said time and time again, my 
colleagues, many of them my friends in the majority, they have said, 
You Republicans had no problem when the Federal Reserve bailed out Bear 
Stearns. Now, although you had no problem with that $30 billion, you've 
got a big problem with the $15 billion under the gentlewoman, the 
chairman of the subcommittee from California. You have got a big 
problem with this $15 billion. In fact, that's not the case. I would 
like to clarify what I think is a misconception.
  Immediately following the Bear Stearns, whether you call it a bailout 
or intervention, it was a $30 billion potential loss to the American 
taxpayers, I agree with the gentlelady from California. One of our 
Members, and I think it shows the importance that one Member can make a 
difference, and that Member was Representative Scott Garrett from New 
Jersey. Representative Garrett immediately penned a letter to Chairman 
Frank, and I commend Chairman Frank; he gave a very prompt response to 
that letter. But in that letter, Scott Garrett raised some questions.
  One of the questions was, Should we use taxpayers' money or expose 
taxpayers to laws to intervene in these situations. He wrote a very 
carefully crafted letter. He said, I have serious concerns about this, 
serious concerns about the taxpayer standing behind a $29 billion 
guarantee. I think these are extraordinary actions that we're taking, 
and we ought to have a full investigation.
  Now, that letter was signed by 17 Members of this body. Now, who were 
those Members? Were they the Democratic Members who are expressing 
concerns tonight? Let's see.
  There was Scott Garrett; there was Spencer Bachus, yours truly; there 
was Don Manzullo from Illinois, I believe he is a Republican; Walter 
Jones from North Carolina. I congratulate Walter on his fine victory 
last night. Michele Bachmann, she is a Minnesota Republican; Ginny 
Brown-Waite, she's from Florida, she's a Republican; Randy Neugebauer, 
vice chairman of our side, or vice ranking member; Tom Feeney, last 
time I checked he was a Republican unless he switched parties. Tom 
Price. Is there any debate among any of us that he's a very 
conservative Republican? Ron Paul. Now there's a debate. There's a 
debate. He may not be a Republican; he may be a Libertarian; certainly 
not a Democrat. Mr. Putnam, member of the Republican leadership. Thad 
McCotter. He signed his name. We had to do some investigation. He 
really used his chicken scratch here, but we've identified him as Thad 
McCotter after some investigation. Mr. Hensarling. Boy, that's a 
conservative Republican. Mr. Pearce from New Mexico; Jeff Davis, 
Kentucky; Judy Biggert, esteemed subcommittee ranking member, and Dean 
Heller.
  Seventeen Members, all Republicans, who express real concerns. And I 
do want to congratulate the chairman of the full committee, because he 
almost responded yes, we need to look into this; we need to have 
hearings. He did say, I don't think it's necessary to do it at this 
time. I think we can postpone it because we need to talk about 
something that's quite different, and that's the foreclosure prices.
  But tonight on this floor, the Democrats have linked the two as 
bailouts.
  Let me tell you what the chairman said. The chairman of the full 
committee, and I agree with him, I think he's absolutely right. He said 
we should check into this matter because when you use taxpayer money to 
guarantee something, here is what he said, ``It sets a precedent that 
could lead to future instances of companies . . . expecting the same 
assistance.'' A precedent that could lead to future instances of 
companies expecting the same assistance. And we shouldn't obligate the 
taxpayers to make those sort of expenditures because people will begin 
to think that they will be bailed out.
  Absolutely what we face tonight. Madam Chairman, Members of this 
body, we are creating an expectation tonight on this floor by bailing 
out irresponsible speculators and lenders.
  I thank the Chairman.

                                    Congress of the United States,


                                     House of Representatives,

                                    Washington, DC, April 7, 2008.
     Hon. Barney Frank,
     Chairman, Committee on Financial Services, Rayburn House 
         Office Building, Washington, DC.
       Dear Chairman Frank: We are writing to respectfully request 
     you hold a hearing of the full Financial Services Committee 
     regarding the recent collapse of the investment bank Bear 
     Stearns and the subsequent actions taken by the Federal 
     Reserve to facilitate Bear Stearns' sale to J.P. Morgan 
     Chase. These steps have had an immediate impact on the 
     financial markets and are also expected to have a long-term 
     effect on our financial regulatory structure.
       For the first time since the Great Depression, the Fed 
     voted to open its discount window to primary dealers. While 
     this authority has been available to the Fed since 1932, the 
     decision to use it at this time has raised questions about 
     whether and when the Fed should intervene to help a 
     particular industry or firm in the name of market stability.
       With the Fed approving the financing arrangements of the 
     sale of Bear Stearns to J.P. Morgan Chase as well as 
     guaranteeing $29 billion in securities currently held by Bear 
     Stearns, the Fed has possibly exposed the American taxpayers 
     to unknown amounts of financial loss and established a 
     precedent that could lead to future instances of companies in 
     similar financial trouble expecting the same assistance.
       These extraordinary actions have raised a number of complex 
     and multifaceted questions. As members of the committee of 
     jurisdiction over our nations' financial markets and the 
     regulatory bodies that oversee them, we feel it is imperative 
     to have a full and public vetting of this unique situation. 
     Therefore, we strongly urge you to convene a hearing on this 
     subject of the Financial Services Committee on the soonest 
     possible date.
       Thank you for your consideration of this request.
           Sincerely,
         Scott Garrett, Spencer Bachus, Donald Manzullo, Walter B. 
           Jones, Michele Bachmann, Ginny Brown-Waite, Randy 
           Neugebauer, Tom Feeney, Thomas Price, Ron Paul, Adam H. 
           Putnam, T. McCotter, Jeb Hensarling, Steven Pearce, 
           Geoff Davis, Judy Biggert, Dean Heller.
                                  ____

                                    Congress of the United States,


                                     House of Representatives,

                                   Washington, DC, April 14, 2008.
     Hon. Scott Garrett,
     Congressman, House of Representatives, Longworth House Office 
         Building, Washington, DC.
       Dear Mr. Garrett, I received the letter signed by you and 
     sixteen of your Republican colleagues on the Financial 
     Services Committee expressing your concern that the recent 
     actions by the top financial appointees of the Bush 
     administration in the matter of Bear Stearns have ``possibly 
     exposed the American taxpayers to unknown amounts of 
     financial loss and established a precedent that could lead to 
     future instances of companies in similar financial trouble 
     expecting the same assistance.'' It does occur to me as I 
     read your letter that I have somewhat more confidence in the 
     judgment exercised by Secretary of the Treasury Paulson and 
     his aides and Federal Reserve Chairman Bernanke and other 
     officials of the Federal Reserve System than you appear to 
     have, but that is no reason for us not to give this the 
     fullest possible airing. So I do agree that we should be 
     thoroughly examining this matter.
       Where we may disagree is the context in which this happens. 
     That is, I agree with you that we should have a ``full and 
     public vetting of this'' matter, but I do not think it is 
     necessary that we have the hearing ``on the soonest possible 
     date.'' I say this for two reasons.
       First, the Committee, as you know, is now engaged in 
     serious consideration of the appropriate response to the 
     foreclosure crisis that now confronts us. I realize that 
     there are some who believe that we should take no action at 
     all, but I think the recent movement by the Bush 
     administration to expand the reach of the FHA, even though I 
     do not agree with it in all respects--is recognition of the 
     need for some action. I therefore believe that it is 
     important that the Committee continue its efforts on dealing 
     with

[[Page 8056]]

     the current crisis, in cooperation with our Senate colleagues 
     who as you know in a bipartisan way have also moved forward 
     on legislation, although I do not agree myself with all 
     aspects of it. My intention is to ask that the Committee 
     continue to focus on this for the next several weeks.
       Secondly, I do believe it is important for the Committee to 
     begin an investigation, including hearings, into the Bear 
     Stearns issue, but not in isolation. It is important that we 
     look at what happened with regard to Bear Stearns, not 
     primarily as a matter of hindsight because in fact we cannot 
     undo what was done, but rather from the standpoint of 
     anticipating what the public response should be in similar 
     matters going forward. This includes of course discussing 
     whether or not these specific actions taken in the Bear 
     Stearns case were the best ones from the public standpoint, 
     but also beginning the very important issue of what we might 
     do in Congress to make it less likely that situation of this 
     sort will recur. You correctly note in your letter that what 
     the Bush Administration did in this case did establish ``a 
     precedent that could lead to future instances of companies . 
     . . expecting the same assistance.'' I think it is important 
     that we therefore empower some federal entities to take 
     actions that may make this less likely, and would also allow 
     them to accompany any such intervention if it should later be 
     decided to be necessary with appropriate I remedial matters.
       In summary, I agree that the Committee should be looking 
     into this, not from the standpoint of rebuking Chairman 
     Bernanke or Secretary Paulson, but rather as part of a 
     serious consideration I of the causes of the current crisis 
     and more importantly, what we can do to make a recurrence of 
     the events that led up to the Bear Stearns response much less 
     likely in the future.
                                                      Barney Frank

  The Acting CHAIRMAN. The time of the gentleman has expired.
  Mr. MAHONEY of Florida. Madam Chairman, how much time do I have left?
  The Acting CHAIRMAN. Thirty seconds.
  Mr. MAHONEY of Florida. I will yield that to the gentleman from 
Massachusetts.
  Mr. FRANK of Massachusetts. I will respond at great length later, but 
I would say this.
  I said I did not oppose, myself, what they did. I was talking 
primarily about the Bush administration.
  Now the ranking member said 17 Republicans out of almost 200 signed 
this letter. I don't think that's the majority of Republicans. They 
didn't oppose it. They raised questions about it.
  But it was the two highest ranking economic officials appointed by 
the Bush administration, Chairman Bernanke and Secretary Paulson, who 
did this; and it's the Bush administration that seems to me to be 
totally inconsistent here. So yes, I did point to an inconsistency 
between the Bush administration doing the bailout and their opposing 
this. I'm setting a precedent. I hope the citizens will think we are 
setting the precedent of coming to their aid from time to time.
  The Acting CHAIRMAN. All time for debate on the amendment has 
expired.
  The question is on the amendment offered by the gentleman from 
Florida (Mr. Mahoney).
  The amendment was agreed to.


               Amendment No. 4 Offered by Mr. Hensarling

  The Acting CHAIRMAN. It is now in order to consider amendment No. 4 
printed in House Report 110-621.
  Mr. HENSARLING. Madam Chairman, I have an amendment at the desk.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 4 offered by Mr. Hensarling:
       Page 2, line 10, strike ``and grant''.
       Page 3, line 1, strike ``and grants''.
       Page 3, line 10, strike ``AND GRANTS''.
       Page 3, line 13, strike ``make grants under section 5(a) to 
     qualified States and''.
       Page 3, lines 18 and 19, strike ``make a grant under this 
     Act only to a State, and may''.
       Page 4, line 25, strike ``grant and''.
       Page 5, line 3, strike ``grant and''.
       Page 5, line 7, strike ``grant or''.
       Page 6, line 8, strike ``grant and''.
       Page 6, lines 21 and 22, strike ``grant amounts, and for''.
       Page 7, line 1, strike ``grant or''.
       Strike line 22 on page 8 and all that follows through page 
     9, line 2.
       Page 9, line 9, strike ``Grant Amounts and''.
       Page 9, line 11, strike ``grant amount or''.
       Page 9, lines 12 and 13, strike ``foreclosure grant 
     share''.
       Page 9, line 13, strike ``or''.
       Page 9, lines 13 and 14, strike ``, respectively,''.
       Page 9, line 20, strike ``grant amount or''.
       Page 9, line 22, strike ``foreclosure grant share or''.
       Page 9, line 23, strike ``, respectively,'' and ``the grant 
     amount or''.
       Page 9, line 25, strike ``foreclosure grant share or''.
       Page 10, line 1, strike ``, respectively,''.
       Page 10, line 2, strike ``grant amounts or''.
       Page 10, line 6, strike ``grant amounts or''.
       Page 10, line 9, strike ``grant amount or''.
       Page 10, line 11, strike ``grant amount or''.
       Page 10, line 13, strike ``foreclosure grant share or''.
       Page 10, line 14, strike ``, respectively''.
       Page 10, line 16, strike ``grant or''.
       Page 10, line 18, strike ``or grants''.
       Strike line 23 on page 10 and all that follows through page 
     11, line 10.
       Page 12, line 3, strike ``grant and''.
       Page 12, strike lines 5 through 7.
       Page 12, line 14, strike ``grant amounts and''.
       Page 12, lines 17 and 18, strike ``such grant amounts 
     and''.
       Page 12, line 19, strike ``grant amounts and''.
       Page 12, line 20, strike ``, respectively,''.
       Page 13, line 8, strike ``grant amounts and''.
       Page 13, lines 11 and 12, strike ``grant amounts and''.
       Page 13, line 13, strike ``grant amounts and''.
       Page 13, line 14, strike ``, respectively,''.
       Page 14, lines 1 and 2, strike ``grant and''.
       Page 14, line 5, strike ``grant and''.
       Page 14, line 8, strike ``grant and''.
       Page 14, line 12, strike ``grant amounts and''.
       Page 14, line 17, strike ``grant amounts and''.
       Page 17, strike lines 21 through 25.
       Strike line 18 on page 19 and all that follows through page 
     21, line 24.
       Page 22, line 2, strike ``grant or''.
       Strike line 12 on page 22 and all that follows through page 
     24, line 4.
       Page 24, line 6, strike ``grant or''.
       Page 24, lines 7 and 8, strike ``grant and''.
       Page 24, line 23, strike ``or grant''.
       Page 24, line 25, strike ``or grant''.
       Page 27, line 13, strike ``grant or''.
       Page 27, line 19, strike ``or grant''.
       Page 28, lines 12 and 13, strike ``receives a grant under 
     this Act or''.
       Page 28, lines 15 and 16, strike ``obligation of such grant 
     amounts and''.
       Page 28, line 20, strike ``obligate all such grant amounts 
     and''.
       Page 28, lines 24 and 25, strike ``outlay all such grant 
     amounts and''.
       Page 30, line 3, strike ``a grant or'' and insert ``an''.
       Page 30, line 13, strike ``grant or''.
       Page 30, lines 14 and 15, strike ``grant or''.
       Page 30, line 19, strike ``grant or''.
       Page 35, strike lines 8 through 10.
       Page 35, line 21, strike ``$7,500,000,000'' and insert 
     ``$15,000,000,000''.

  The Acting CHAIRMAN. Pursuant to House Resolution 1174, Mr. 
Hensarling and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Texas.
  Mr. HENSARLING. Thank you, Madam Chairman.
  First, I would like to yield 30 seconds to the ranking member, the 
gentleman from Alabama.
  Mr. BACHUS. I thank the gentleman from Texas.
  And responding to the chairman, first of all, I would say the letter 
that came back to Mr. Garrett from the chairman expressed the 
chairman's opinion that he had much more confidence in this bailout 
than the Republican Members.
  But secondly, he pointed out only 17 Members. In fact, that is the 
majority of the Financial Services Committee, and as Mr. Garrett asked 
earlier of the majority party, how many Democrats signed a letter 
demanding an investigation into the Bear Stearns matter? The response 
was none. All Members that have publicly in writing demanded an 
investigation were Republican Members, the majority of the Financial 
Services Committee.
  Mr. HENSARLING. Madam Chairman, I will yield myself as much time as I 
may consume.
  Madam Chairman, I thank the ranking member for his comments and again 
bringing up what is a very important issue here. And that is 
fundamentally what we have before us is a Wall Street bailout bill. Now 
we all know there are some very significant challenges in our housing 
markets. But the answer is not to be bailing out lenders. They may be 
good lenders who made bad bets, and maybe they are the predatory 
lenders that we hear so much about. This bill doesn't make any 
particular distinction.
  The people who can stay in their homes, if they just get a little 
help, we


[[Page 8057]]


need disclosure. We need to enforce the law against fraud. There has 
been a lot of mortgage fraud on the borrowers' side, on the lenders' 
side.
  Most importantly now, Madam Chairman, we need to prevent the single 
largest tax increase in American history passed by the Democrat 
majority in their budget which means that people who are struggling to 
pay their mortgages are going to have to pay more taxes.
  The rising fuel cost, that's happened under the watch of the Democrat 
majority; the rising cost of food happened under the watch of the 
Democrat majority. They've been in charge of the economic policy of 
America for almost a year and a half now. It is the shrinking paycheck 
of the hardworking American homeowner and taxpayer that's at the crux 
of this problem.
  And so what this underlying bill does is take $15 billion of money 
away from the school teacher in Mesquite, Texas, struggling to pay his 
mortgage; the guy who works at the Pepsi bottling plant in Mesquite; 
the rancher out in Athens, Texas; takes money away from them to bail 
out all of these bad investors who made these bad bets.
  So you can't say that you were concerned about Bear Stearns and then 
all of a sudden turn right around and have this humongous Wall Street 
bailout bill.
  My amendment is simple. Presently, you have a $15 billion bill, half 
of which are loans and half of which are grants. The purpose of the 
amendment is to turn this into strictly a loan program. Now, I don't 
believe in the purpose of the underlying bill. But, if you're going to 
bail out Wall Street and use taxpayer money, let's at least, at least 
try to make it a loan so that there is at least some chance, some 
chance that the taxpayer who's facing a $3,000-a-year increase in their 
taxes for a family of four over the next 3 years under the majority 
budget, that maybe, maybe they have some small chance of recouping some 
of that money from all of these cities and localities. And by the way, 
again, the last I looked, almost every single State and municipality in 
America is running a surplus.

                              {time}  2215

  Yet the Federal Government isn't, and so what does the underlying 
bill do? Hands out more grant money, more grant money on top of the $57 
trillion of unfunded obligations that every man, woman and child in 
America already owes. Well, let's add some more grant money.
  Well, if it's that important to States and municipalities, maybe they 
would want to fund it or maybe they could take the loan money and 
eventually pay it back so maybe the Democrat majority wouldn't have to 
raise taxes on the Federal taxpayers quite as much.
  So, Madam Chairman, it's a very commonsense amendment. If you're 
going to do it, at least do loans and don't do grants.
  With that, I reserve the balance of my time.
  Mr. SCOTT of Georgia. Madam Chairman, I rise to claim the time in 
opposition.
  The Acting CHAIRMAN. The gentleman is recognized for 5 minutes.
  Mr. SCOTT of Georgia. What we see here, Madam Chairman, is a 
fundamental difference between the Republicans and the Democrats when 
it comes to responding to the pressing needs of the American people. 
Let us look at really where we are.
  We are in a depressed, recessed economy, which means liquidity is 
drying up, which means there is a slowing supply and circulation of 
money, which has been caused chiefly by a meltdown of the subprime 
mortgage market, and it has had a ricocheting effect throughout every 
fiber of our economy.
  The American people are hanging on by their fingernails. Between 
7,000 and 8,000 American families are foreclosing every day, according 
to the Federal Reserve, not David Scott, not our Financial Services 
Committee, but according to the Federal Reserve, between 7,000 and 
8,000 individuals are declaring foreclosure.
  That means communities all across this Nation are impacted. Not only 
is this a burden upon individuals, homeowners and families, it's 
devastating enough, but many of these foreclosures, when the property's 
foreclosed, that means folks are out of them. That means they are left 
vacant. That means they become fire hazards. That means they become 
havens to criminals. That means police services, that means fire 
services, that means a tremendous pressure being placed on already 
depressed city and county and State budgets.
  And Madam Chairman, in every State in this Nation, there's been a 20 
percent, at least, increase in foreclosures. So this is a problem of 
soaring magnitude, and the cities and the counties are already, many of 
them, moving ahead, but they are overwhelmed with the scale of this 
problem. And that's where the government comes in.
  There is a role for government. We need to respond to the needs of 
the American people, and nowhere is it more important than in this bill 
that has been very brilliantly designed by the gentlelady from 
California and our chairman of this committee.
  Now let's speak very briefly about this Hensarling amendment. And, I 
might add, the gentleman from Texas is a fine person. I consider him a 
good friend, but he is terribly, terribly wrong with this amendment. 
This is a terrible amendment because it does what we refer to in the 
South as, hold still, little fishy, and let me gut you. That's what 
this amendment does.
  It goes at the heart of this bill, because what he wants to do is 
take away the stimulus package for the local communities, and what he 
wants to do is to deny a way and a requirement in the bill so that we 
can help the poor elements where this bill says that you must serve 
those that meet at least 50 percent of the level of poverty. In order 
to do that, we must have the grant feature in the bill.
  The other point, as I mentioned earlier, a part of our whole concern 
in this whole economic issue is liquidity, which means we must have a 
stimulative nature in terms of what we do here in Washington, to 
stimulate the economy and put money into the economy. That's why we've 
got this week and leading on starting in next week $600, $300 and 
$1,200 checks. To do what? To stimulate.
  I take great offense from the other side when they constantly want 
the American people to think we're taking their tax money away and 
putting it in our pockets or hoarding it. This money is going right 
back to taxpayers to help to defray the costs of servicing these 
depressed communities.
  The grants are needed, Madam Chairman, in order for us to serve those 
that are at the lower end of the economic level, which we must do and 
can only be done through grants. If his amendment is adopted, we won't 
be able to do that which hurts and almost kills this bill.
  The other thing that it does, it does not allow us to apply the 
stimulus factor to the bill to provide needed input into this. I urge a 
defeat of this. It might be intentioned, I won't say well, but it is a 
terrible amendment from the gentleman from Texas.
  The Acting CHAIRMAN. The gentleman's time has expired.
  Mr. HENSARLING. I yield myself the balance of my time.
  Well, first, I would say to my friend from Georgia and other friends 
on that side of the aisle, if loans are so bad, why are they in the 
bill in the first place?
  Second of all, this bill does nothing to stop foreclosures, not a 
thing. Quite the opposite. Instead, it will increase foreclosures.
  What you have is an incentive for these investors to no longer do a 
workout with the struggling family, but instead, I can get bailed out. 
I can get bailed out by the Federal taxpayer. This is a bill that will 
help banks, Wall Street and States and does nothing for foreclosed 
families. It certainly does nothing for the taxpayer, and if we have a 
liquidity problem, which we do, let's cut the capital gains tax rate 
and you will see capital come into this market. I urge adoption.
  The Acting CHAIRMAN. All time for debate on the amendment has 
expired.

[[Page 8058]]

  The question is on the amendment offered by the gentleman from Texas 
(Mr. Hensarling).
  The question was taken; and the Acting Chairman announced that the 
noes appeared to have it.
  Mr. HENSARLING. Madam Chairman, I demand a recorded vote.
  The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, further 
proceedings on the amendment offered by the gentleman from Texas will 
be postponed.


                Amendment No. 5 Offered by Mr. Kucinich

  The Acting CHAIRMAN. It is now in order to consider amendment No. 5 
printed in House Report 110-621.
  Mr. KUCINICH. Madam Chairman, I have an amendment at the desk.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 5 offered by Mr. Kucinich:
       Page 2, line 13, strike ``purchase and rehabilitate'' and 
     insert ``preserve the equity and ensure the safety of the 
     neighbors of homes made vacant by the predatory lending and 
     foreclosure crises, to prevent and reduce the incidence of 
     such vacancies through various means, including purchasing 
     and rehabilitating''.
       Page 3, line 3, before the semicolon insert ``, and largest 
     increases in the rate of vacant and abandoned single family 
     homes''.
       Page 4, line 17, strike ``foreclosures'' and insert 
     ``vacancies, according to the number of census tracts, as 
     determined by the Secretary, to have large increases in the 
     rate of vacancy during the past eight quarters and 
     significant levels of loans determined to be at risk of 
     foreclosure,''.

  The Acting CHAIRMAN. Pursuant to House Resolution 1174, the gentleman 
from Ohio (Mr. Kucinich) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Ohio.
  Mr. KUCINICH. Madam Chairman, I yield myself such time as I may 
consume.
  The primary beneficiaries of H.R. 5818 are the neighborhoods and 
neighbors of high concentrations of houses made vacant by the 
foreclosure and predatory lending crises. Helping those neighborhoods 
should be a nonpartisan and noncontroversial act. Such neighborhoods 
are the totally innocent bystanders of the predatory lending and 
foreclosure crises. Neighbors and neighborhoods are victims of the 
meltdown of subprime loans that preceded this wave of foreclosures, and 
there's no moral hazard in helping the neighbors. The Kucinich 
amendment ensures that the funds authorized by H.R. 5818 are targeted 
to help the most needy neighborhoods.
  When a foreclosure leads to a vacant and abandoned property, this is 
what happens to the neighborhood: Crime goes up, as the vacant property 
can become home to criminal activity, drug places, and fire hazards; 
local government costs for police, fire and building inspections go up; 
vacancies go up, abandoned properties initiate a chain of events that 
begets more abandoned properties; neighbors lose equity in their homes, 
because vacant properties have a strong negative effect on the value of 
neighboring properties.
  My amendment clarifies that the purpose of this legislation is to 
help State and local governments ``preserve the equity and ensure the 
safety of neighbors of homes made vacant'' by the foreclosure and 
predatory lending crises.
  My amendment also ensures that the neediest neighborhoods receive 
priority in the plans developed by States, metropolitan cities and 
urban counties. The neediest neighborhoods are defined with ``high 
concentrations of vacancies,'' ``large increases in the rate of 
vacancy'' in the last 2 years, and ``significant levels of loans 
determined to be at risk of foreclosure.'' These vacant property 
statistics have been gathered by the United States Postal Service and 
analyzed by the Department of Housing and Urban Development, and their 
use will better target the funds authorized by H.R. 5818.
  My amendment is the product of a collaborative effort between my 
subcommittee, the Domestic Policy Subcommittee, and the Subcommittee on 
Housing and Community Opportunity and the Financial Services Committee. 
The amendment draws upon the academic research and input from 
practitioners in this area.
  My amendment is supported by community development professionals and 
advocates, such as Local Initiatives Support Corporation, the National 
Vacant Properties Campaign, and Smart Growth America.
  I will place their letters of support in the Record at this point.

                                                      May 6, 2008.
     Hon. Dennis Kucinich,
     Rayburn House Office Building,
     Washington, DC.
       Dear Congressman Kucinich: We are writing to support your 
     amendment to the Neighborhood Stabilization Act of 2008 that 
     recognizes the important role vacant and abandoned properties 
     play in the foreclosure crisis and the threat they can pose 
     to communities across the country.
       By including the rate of vacancy in the fund distribution 
     formula, this proposal helps to ensure that neighborhoods 
     struggling with high rates of vacant and abandoned homes will 
     receive priority in the plans developed by states, 
     metropolitan areas, and urban counties. High rates of vacant 
     properties put communities at a greater risk for crime, 
     arson, destabilized housing prices, and other neighborhood 
     problems. For many communities, dealing with the foreclosure 
     crisis will mean taking steps to recover and secure growing 
     numbers of vacant homes, as well as figuring out the best 
     ways to prevent these properties from having negative 
     community impacts.
       Thank you for your leadership on this issue and we look 
     forward to working with you on this important legislation.
           Sincerely,
     Geoff Anderson,
       President & CEO, Smart Growth America.
     Jennifer Leonard,
       Director, National Vacant Properties Campaign.
                                  ____

                                                 Local Initiatives


                                          Support Corporation,

                                      Washington, DC, May 6, 2008.
     Rep. Dennis Kucinich,
     Rayburn House Office Building,
     Washington, DC.
       Dear Representative Kucinich: Regarding H.R. 5818, the 
     Neighborhood Stabilization Act of 2008, Local Initiatives 
     Support Corporation (LISC) supports your amendment to focus 
     the bill's resources on communities with rising vacancies.
       A primary purpose of H.R. 5818, which LISC also supports 
     more broadly, is to help communities hurt by concentrations 
     of home mortgage foreclosures. A principal indicator of this 
     problem is the number and growth of vacant properties. 
     Concentrations of vacant and abandoned properties have a 
     corrosive affect on neighborhoods. Vacant properties depress 
     the value of nearby properties, reduce the tax base on which 
     states and localities depend, are a magnet for crime, and 
     often undermine promising but fragile progress toward 
     revitalization.
       Your amendment is an important refinement to H.R. 5818 
     because it would direct states to prioritize the allocation 
     of funds under the bill to low- and moderate-income 
     neighborhoods with the highest concentration of vacant 
     properties.
       We greatly appreciate your leadership on this most 
     important issue for vulnerable communities and the people who 
     live there.
           Sincerely,

                                            Benson F. Roberts,

                                  Senior Vice President for Policy
                                          and Program Development.

  I urge adoption of the Kucinich amendment which targets funds to the 
most needy neighborhoods.
  I reserve the balance of my time.
  Ms. WATERS. Madam Chairman, I rise in support of Mr. Kucinich's 
amendment.
  The Acting CHAIRMAN. Without objection, the gentlewoman from 
California is recognized for 5 minutes.
  There was no objection.
  Ms. WATERS. Madam Chairman, I rise in strong support of 
Representative Kucinich's amendment.
  His subcommittee has done an enormous amount of valuable work 
examining this targeting issue, and I want to thank him for focusing 
attention on the issue of neighborhoods where there are large and 
growing concentrations of vacancies resulting from the foreclosure 
crisis. They're exactly the neighborhoods I mentioned in my opening 
statement, ones that face the prospect of reaching the tipping point of 
deterioration from which they may never recover. Stabilizing such 
neighborhoods is an especially daunting task for community leaders and 
organizations.
  So I think it is entirely appropriate, as this amendment does, to 
require States, counties and cities in their plans to prioritize these 
foreclosures and vacancy hotspots.

[[Page 8059]]

  Finally, I know that this is no academic exercise for Representative 
Kucinich in his role as subcommittee Chair. He's bringing hard 
experience to the table from the neighborhoods within his district in 
Cleveland.
  I urge my colleagues to support this amendment.
  I yield back the balance of my time.
  Mr. KUCINICH. Madam Chairman, I yield to the gentlewoman from Texas 
(Ms. Jackson-Lee) for a unanimous consent request.
  Ms. JACKSON-LEE of Texas. I ask unanimous consent to support this 
very important amendment by the gentleman from Ohio and as well to 
enthusiastically support the $15 billion for reclaiming our homes.
  With that, I offer to submit my statement for the Record.
  The Acting CHAIRMAN. Is there objection to the request of the 
gentlewoman from Texas?
  There was no objection.
  Ms. JACKSON-LEE of Texas. Madam Chairman, I rise in support of H.R. 
5818, the ``Neighborhood Stabilization Act of 2008,'' introduced by 
Congresswoman Maxine Waters, of California. I would also like to thank 
Chairman Barney Frank for his leadership on the Financial Services 
Committee. I also support the Kucinich amendment to ensure accurate 
vacancy statistics.
  I find it interesting that we are okay with a bailout of Bear 
Stearns, the fifth largest investment firm in the amount of 42 million 
dollars; however we cannot support assistance to the American 
Homeowners who are struggling to pay their mortgage, fill up at the 
pump, and get quality healthcare.


                          General Introduction

  As evidenced by the numerous housing and financial services bills 
introduced this Congress, we are in economic turmoil. I have been 
concerned over recent developments in the housing and mortgage markets 
and worked with my colleagues to ensure that all Americans are able to 
get assistance.
  Legislation such as H.R. 3019, the Expand and Preserve Home Ownership 
through Counseling Act and H.R. 3666, the Foreclosure Prevention and 
Home Ownership Protection Act, include sections that speak specifically 
about foreclosures. They authorize studies on current defaults and 
foreclosures, as well as possible causes.
  However, H.R. 5818 provides for action. H.R. 5818 establishes a 15 
billion dollar loan and grant program for the purchase and 
rehabilitation of owner-vacated, foreclosed homes. The Department of 
Housing and Urban Development (HUD) will make the allocations to the 
States; 7.5 billion of the funds would be for loans, and 7.5 billion 
for grants.
  Beyond negotiating with the mortgage company, Americans need to know 
they have options. Sometimes it is the mortgage company who has given 
them a bad loan; H.R. 5818 offers some relief to individuals and 
families who need help, beyond their personal lender.


                                 TEXAS

  Nationwide, the number of home foreclosures rose nearly 60 percent 
from February 2007 to February 2008, while foreclosures in Texas 
actually decreased 1 percent during the same, period. In fact, state-
wide foreclosure filings in Texas dropped 17 percent from January to 
February.
  Despite being such a large state, Texas ranks only 17th in 
foreclosures, below the national average. One reason is that Texas 
homeowners enjoy strong constitutional protections under the state's 
home-equity lending law.
  These consumer protections include a 3 percent cap on lender's fees, 
80 percent loan-to-value ratio (compared to many other states that 
allow borrowers to obtain 125 percent of their home's value), and 
mandatory judicial sign-off on any foreclosure proceeding involving a 
defaulted home-equity loan.
  Even though the rate of increase has showed slowing in the first two 
months of the year, uncertainties remain. Foreclosures are high and 
could still beat last year's numbers. Harris County, for example, 
racked up 2,219 foreclosures during the first two months of the year. 
That's compared with 1,915 during the same period last year.


                     AMENDMENT LANGUAGE AND PURPOSE

  I had offered an amendment to H.R. 5818 that would provide for those 
who have been struggling to keep up with the rising prices of gas, the 
downturn of the housing market, and the incredible cost of health care. 
My amendment would not exclude from eligibility, individuals and 
families based solely on credit ratings or their credit histories.
  Many individuals and families have credit ratings and histories that 
are less than required for the most-advantageous lending terms. These 
individuals should not be faulted for their struggle to make ends meet 
in these troubling economic times.
  They have less than stellar credit due to the financial stress they 
have experienced trying to save their home from foreclosure. As a 
result, they have marred their credit. Families who have struggled to 
decide between paying their mortgage or paying for healthcare, families 
who have struggled to balance their need for shelter with their need 
for food are rarely able to maintain a credit score that qualifies them 
for a basic credit card, let alone a home or rental property.
  At least 50 percent of the grant money must be targeted to house 
families at or below 50 percent of AMI, and not less than half of this 
money must target families at or below 30 percent of AMI. Most of the 
people covered under this bill and at these income levels will not 
qualify if it is not clearly stated that they can be considered even 
with less than stellar credit.


                               Conclusion

  Americans are hurting and they need help. H.R. 5818, provides much 
needed help to the states and to the families who are facing a housIng 
downtown. Thank you, Madam Chairman, and thank you, Congressman Frank 
and Congresswoman Waters, for this timely housing legislation. I urge 
my colleagues to support this legislation and give some relief to 
American families.
  Mr. KUCINICH. Madam Chairman, I yield back the balance of my time.
  The Acting CHAIRMAN. The question is on the amendment offered by the 
gentleman from Ohio (Mr. Kucinich).
  The amendment was agreed to.


                Amendment No. 6 Offered by Mr. Mc Cotter

  The Acting CHAIRMAN. It is now in order to consider amendment No. 6 
printed in House Report 110-621.
  Mr. McCOTTER. Madam Chairman, I have an amendment at the desk.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 6 offered by Mr. McCotter:
       Page 6, after line 2, insert the following:
       (8) notwithstanding any other preferences established or 
     authorized under this subsection, provide first priority, in 
     use of amounts from grants or loans under this Act for 
     rehabilitating housing, for providing housing for veterans, 
     members of the Armed Forces on active duty, members of the 
     National Guard or Armed Forces reserves, school teachers, and 
     emergency responders;
       Page 6, line 3, strike ``(8)'' and insert ``(9)''.
       Page 6, line 8, strike ``(9)'' and insert ``(10)''.
       Page 6, line 13, strike ``(10)'' and insert ``(11)''.
       Page 6, line 21, strike ``(11)'' and insert ``(12)''.
       Page 7, line 1, strike ``(12)'' and insert ``(13)''.

  The Acting CHAIRMAN. Pursuant to House Resolution 1174, the gentleman 
from Michigan (Mr. McCotter) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Michigan.
  Mr. McCOTTER. Madam Chairman, I yield myself as much time as I may 
consume.
  Just a brief description of the amendment which I hope will prove 
noncontroversial. What I would like to do under the bill, though I'm 
not particularly a fan of the bill itself and its particulars, I would 
like to try to help to make it better.
  My amendment would, under the bill, require States to give first 
priority to veterans, active duty military personnel, National Guard, 
Armed Forces Reserves, schoolteachers and emergency response personnel 
when selling rehabilitated housing with funds authorized under H.R. 
5818.

                              {time}  2230

  Importantly, this amendment will not exclude those individuals who 
are low income, and does not change the underlying low-income 
eligibility requirements established under the bill.
  Madam Chairman, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Madam Chairman, I rise in as close to 
opposition as this noncontroversial amendment is likely to engender.
  The Acting CHAIRMAN. Without objection, the gentleman is recognized 
for 5 minutes.
  There was no objection.
  Mr. FRANK of Massachusetts. I did note, and I welcome the gentleman 
from Michigan's affirmation, that this

[[Page 8060]]

is not simply for banks, investment houses, pirates, lechers and other 
ill of sordid folk. He is seeking to give preference to veterans, 
members of the Armed Forces on active duty, members of the National 
Guard or Armed Forces Reserve, school teachers and emergency 
responders.
  I agree with these priorities. It is, of course, an affirmation that 
this bill will benefit these people, unless we are to assume that they 
will be given a preference which is of no benefit to them. But if this 
bill is of no benefit to anybody but speculators, lenders and riffraff, 
then why give preference to these people? I agree with the amendment to 
that extent, and so I would just say that this underlines the point 
that there are very worthy beneficiaries.
  But now I also want to return to the matter of the Bear Stearns 
issue. I will acknowledge, I did receive a letter from 17 Republicans, 
which is, by my math, not a huge percentage of 199 or 200 or whatever 
the declining number of Republican Members of the House is these days, 
but it is still not a very large number. And even in that letter, while 
it was not thrilled by the Chairman Bernanke-Secretary Paulson 
collaboration, it does not have one word in strict opposition to it. 
Nor does the letter that 24 Republicans--a slightly larger number, but 
still not even 15 percent--sent to Mr. Bernanke again raising 
questions.
  So, yes, 24 Republicans have raised questions, Members of the House, 
about this bill. I will repeat that my accusation of inconsistency goes 
to the Bush administration primarily. They are the ones who engineered 
the $29 billion. They are the ones who are vehemently opposed to this.
  Now some Republican Members did raise a question that said we should 
look into it and we're skeptical of it. I agreed with that. As I said 
in the letter, I think we should study it. I did think we should study 
it a little later for two reasons; first of all, I do believe the 
subprime crisis is a crisis, some Members on the other side do not. 
There are, among the signers of this letter, some of those who, from 
their very conservative ideology, oppose any action by this Congress 
regarding the subprime. I mean that quite literally, they oppose any 
action to deal with this. That's their right. But I would put dealing 
with the subprime crisis ahead of a backward look, as important as that 
ultimately will be, at what happened with Bear Stearns.
  Secondly, I want to look at what the Fed did there in the context of 
how can we make it less likely that it will happen again? I wasn't 
happy that it happened. I think there was a necessity in those 
circumstances. So what I said in the letter that I sent back to the 
authors was, yes, we should look at this in the context of the broader 
question: What powers do we need to give either the Federal Reserve or 
somebody else to make it less likely that this happens again?
  So, yes, I should, we should, look into it, but I think we should 
look into it not simply from a kind of retroactive bawling them out, 
but how do we prevent it or diminish the likelihood of it happening? 
But the inconsistency remains. Twenty-four Republicans said they had 
questions. On the whole, I haven't heard any Republican opposition to 
it. I haven't seen any resolution opposing it.
  It was the Bush administration, and this is my point: I thought it 
was unfortunately necessary. The Bush Administration, this is Secretary 
Paulson and Chairman Bernanke, they were the ones who did this. And I 
think they have been responsible in trying to deal with this crisis. 
But for the President who appointed those people to now denounce this 
because it's going to help, among others--and by the way, let's be 
clear, if this amendment passes, as I hope it will, we will be giving 
preference under this bill to veterans, members of the Armed Forces on 
active duty, members of the National Guard or Armed Forces Reserve, 
school teachers and emergency responders. So we have a Republican 
affirmation that these are among the beneficiaries.
  And when you talk about bailing out investors and speculators, yes, 
that's what happened in the Bear Stearns situation. These were 
precisely the people who had done business with Bear Stearns. Now I 
believe that years of inadequate supervision of the economy, flawed 
legislation adopted when we repealed Glass-Stiegel and didn't put in 
regulations to deal with it at the time, that was supported by the 
Clinton administration and I voted against it. But when that happened, 
we invited the kind of problems that the leaders of the economic policy 
of the Bush administration had to implement. And it is that 
administration which is therefore being totally inconsistent in this 
regard.
  Madam Chairman, I reserve the balance of my time.
  Mr. McCOTTER. Madam Chairman, I would like to yield 1 minute to the 
author of one of the letters in question, the distinguished gentleman 
from New Jersey (Mr. Garrett).
  Mr. GARRETT of New Jersey. I find it amazing and amusing that the 
chairman raises how many Republicans signed onto the two letters when, 
in fact, it evidences the fact that zero Democrats signed onto that 
letter and zero Democrats have done anything with regard to Bear 
Stearns for the last 2 months since this occurred. If there was even 
one Member from the other side of the aisle from the committee, when we 
invited the entire committee to sign onto it, I think the chairman 
would be in a stronger position, but he is not because none of them 
signed on then. And even earlier this evening, when I invited them to 
sign onto an addition to it, none of them have come across to sign onto 
it.
  Secondly, I find it amusing when the chairman's response in the 
letter was that he has more confidence in Bernanke and the Fed than we 
do. So if your question is that we did not point out that there were 
problems with it, your response points out that--as I've said, I'm not 
quoting because I cannot get a copy of the letter back here--you had 
more confidence in the decisions and in the actions of the Fed and the 
administration. So if you had more confidence, maybe that explains why 
2 months after the action we are still asking for the chairman to hold 
a hearing on the matter, and here it is, 2 months later, all we are 
getting is rhetoric from this side of the aisle.
  Mr. FRANK of Massachusetts. May I inquire of the Chairman how much 
time I have remaining.
  The Acting CHAIRMAN. Fifteen seconds for the gentleman from 
Massachusetts.
  Mr. McCOTTER. Madam Chairman, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. I have said repeatedly that I did not 
oppose the action. And I am pointing to the hypocrisy on the part of 
the Bush administration. The gentleman from New Jersey, like Sherlock 
Holmes, unearthed the fact that I wasn't opposed to it. I said that. I 
think they were forced into it. So, yes, I did not sign it.
  As to not having a hearing right away, that is a done deal. I'm 
trying to prevent foreclosures now, then we will get back to looking in 
the rearview mirror.
  Mr. McCOTTER. May I inquire as to how much time I have remaining.
  The Acting CHAIRMAN. The gentleman has 3 minutes remaining.
  Mr. McCOTTER. I yield myself such time as I may consume.
  First, I would like to reemphasize the point made by the gentleman 
from New Jersey. The distinguished chairman of the committee is right, 
the Republican numbers are declining, and this painful experience with 
arithmetic has taught us that 17 is still a greater number than zero.
  Mr. FRANK of Massachusetts. Will the gentleman yield?
  Mr. McCOTTER. The gentleman may potentially yield, but not at this 
point.
  I would also like to point out that the distinguished chairman is 
right, the bill, if this amendment is adopted, would not be for 
speculators, simply for Bear Stearns, for Wall Street, would not be a 
big, bloated government golden parachute, but again, I think in this 
town, I think I'm being thanked for adding deserving people to 
something that may or may not help.
  You see, it's not the intent that we are debating, it is how we get 
to where

[[Page 8061]]

we all want to go. Do we believe that this is the best way to go? I 
highly doubt that on our side that we would concur with that. And the 
reason that we cannot concur with that is, as I believe the gentleman 
from Georgia pointed out, there are fundamental principles at stake 
here that we simply differ on. That's all right. We agree on some 
things, sometimes we don't, but they're a matter of principle. And in 
the end, the fundamental principle at stake is that our side believes 
that Americans' prosperity does not come from government, it comes from 
their own hard work and entrepreneurial investment. And what we want to 
see with this bill is an appropriate balance for the people that we 
truly are trying to help, for them who have made no mistakes, for them 
who have managed to hang on by their fingernails, for them to be able 
to say that we were compassionate towards our fellow Americans, our tax 
dollars were wisely used, and yet they were appropriately used. We 
believe in better government, not necessarily bigger government. And 
that is the crux of what we are debating today.
  All good people on both sides. And as for the chairman, I do believe 
he is a very honorable man. One of the places we do agree is on the 
Bear Stearns bailout. A lot of our colleagues on this side of the aisle 
screwed up their jobs and didn't get to walk away with $61 million. 
They walked away with far worse. And I think that the Bear Stearns 
issue, which is being conducted by Bernanke over at the Federal Reserve 
and the Secretary of the Treasury, both of whom work for the Bush 
administration--well, one technically does--and who both were, I think 
on a bipartisan basis, confirmed by the United States Senate. So at 
least there's one thing we have in common, we aren't to blame for that. 
So I would look forward to working with him on that.
  But again, I appreciate the support for the amendment, and I will 
yield to the chairman.
  Mr. FRANK of Massachusetts. I just want to repeat, Members seem to 
think they're scoring points by saying, oh, they discovered we weren't 
opposed to it. I've said a dozen times, I thought they did what was 
necessary. I am not critical of them.
  I do want to go back and see how we can prevent this from happening 
again. But there is no inconsistency on our part. We didn't say that 
was the wrong thing to do. The inconsistency is the administration that 
says yes to $30 billion to Bear Stearns and no to $15 billion here.
  The Acting CHAIRMAN. All time for debate on the amendment has 
expired.
  The question is on the amendment offered by the gentleman from 
Michigan (Mr. McCotter).
  The amendment was agreed to.


                 Amendment No. 7 Offered by Mr. Altmire

  The Acting CHAIRMAN. It is now in order to consider amendment No. 7 
printed in House Report 110-621.
  Mr. ALTMIRE. Madam Chairman, I have an amendment at the desk.
  The Acting CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 7 offered by Mr. Altmire:
       Page 36, after line 2, insert the following new section:

     SEC. 15. INELIGIBLITY OF ILLEGAL ALIENS FOR ASSISTANCE.

       Aliens who are not lawfully present in the United States 
     shall be ineligible for financial assistance under this Act, 
     as provided and defined by section 214 of the Housing and 
     Community Development Act of 1980 (42 U.S.C. 1436a). Nothing 
     in this Act shall be construed to alter the restrictions or 
     definitions in such section 214.
       Page 36, line 3, strike ``15'' and insert ``16''.

  The Acting CHAIRMAN. Pursuant to House Resolution 1174, the gentleman 
from Pennsylvania (Mr. Altmire) and a Member opposed each will control 
5 minutes.
  The Chair recognizes the gentleman from Pennsylvania.
  Mr. ALTMIRE. I yield myself such time as I may consume.
  Madam Chairman, I offer this amendment to the Neighborhood 
Stabilization Act to ensure that illegal immigrants are not eligible 
for the financial assistance we're providing today to individuals 
adversely affected by the housing crisis.
  Section 214 of the Housing and Community Development Act governs the 
participation of noncitizens in certain HUD programs. It requires valid 
documentation from the beneficiary, verification of that documentation 
by the appropriate entity, and outlines who may and may not be eligible 
for financial assistance.
  Under section 214, illegal immigrants are not eligible for financial 
assistance. Let me repeat that: Under section 214, illegal immigrants 
are not eligible for financial assistance. And my amendment makes 
certain that section 214 rules apply to the new programs authorized by 
the Neighborhood Stabilization Act that we are debating tonight.
  With the housing crisis and economic downturn impacting the lives of 
hardworking Americans throughout the country, we need to make sure that 
targeted, fiscally responsible assistance that we are providing goes 
only to law-abiding citizens.
  As responsible stewards of taxpayer dollars, it is our responsibility 
to ensure that every penny is spent wisely and is not used to benefit 
any illegal immigrants in any way.
  I urge all of my colleagues to support this amendment.
  Madam Chairman, I reserve the balance of my time.
  Mrs. CAPITO. Madam Chairman, I seek time in opposition, although I am 
not opposed to the gentleman's amendment.
  The Acting CHAIRMAN. Without objection, the gentlewoman from West 
Virginia is recognized for 5 minutes.
  There was no objection.
  Mrs. CAPITO. I would just like to express my support for his 
amendment. I think we have had this debate on the floor many times. And 
I want to say that we want to assure the American public, I think it's 
always good to reassure the American public that taxpayer funds are not 
going to help people here who have entered our country illegally and 
remain here illegally.
  I would like to see, as we move forward in this debate on this and 
other bills, that we tighten down the types of identification that are 
full proof, that can be used to certify the legality of whoever the 
resident is residing, whether it's in public housing or in other 
taxpayer-funded opportunities.
  I yield back the balance of my time.
  Mr. ALTMIRE. Madam Chairman, I yield back the balance of my time.
  The Acting CHAIRMAN. All time for debate on the amendment has 
expired.
  The question is on the amendment offered by the gentleman from 
Pennsylvania (Mr. Altmire).
  The question was taken; and the Acting Chairman announced that the 
ayes appeared to have it.
  Mr. ALTMIRE. Madam Chairman, I demand a recorded vote.
  The Acting CHAIRMAN. Pursuant to clause 6 of rule XVIII, further 
proceedings on the amendment offered by the gentleman from Pennsylvania 
will be postponed.
  Ms. WATERS. Madam Chairman, I move that the Committee do now rise.
  The motion was agreed to.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Altmire) having assumed the chair, Ms. Baldwin, Acting Chairman of the 
Committee of the Whole House on the state of the Union, reported that 
that Committee, having had under consideration the bill (H.R. 5818) had 
come to no resolution thereon.

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