[Congressional Record (Bound Edition), Volume 155 (2009), Part 5]
[House]
[Page 6171]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   THE LAW OF UNINTENDED CONSEQUENCES

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
California (Mr. McClintock) for 5 minutes.
  Mr. McCLINTOCK. Madam Speaker, I'd like to offer a word of caution 
about the law of unintended consequences.
  Last week, this House passed the administration's proposal to allow 
homeowners to force banks to reduce the size of their mortgages and 
their interest payments.
  Well, there are millions of families, including my own I might add, 
who now owe more on our mortgages than our homes are worth, and yet 
more than 90 percent of homeowners continue to make our mortgage 
payments in hopes of better days to come.
  Question: How many of these people who have been faithfully making 
their mortgage payments will now take advantage of this new law to 
reduce their mortgage debt by tens or even hundreds of thousands of 
dollars?
  And while we're at it, here's another question. As these borrowers 
decide to cash in on this windfall, how many additional banks will fold 
as the value of these otherwise perfectly sound mortgages is crammed 
down by this new law?
  And a final question: How high will the surviving banks raise their 
interest rates and down payment requirements to protect themselves 
against future governmental interventions?
  I'm afraid that all we will have done is to create a society where 
fewer banks will be able to make loans and fewer home buyers will be 
able to access loans and produce an additional downward spiral in home 
values.
  Madam Speaker, the law of unintended consequences is beyond Congress' 
jurisdiction, and we would do well to heed it.

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