[Congressional Record (Bound Edition), Volume 155 (2009), Part 9]
[Extensions of Remarks]
[Page 12269]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        VOTING AGAINST H.R. 1728

                                 ______
                                 

                           HON. KURT SCHRADER

                               of oregon

                    in the house of representatives

                         Tuesday, May 12, 2009

  Mr. SCHRADER. Madam Speaker, we are in the midst of the worst 
financial crisis since the Great Depression. Millions of Americans are 
losing their jobs and their homes. A complete lack of oversight, 
irresponsible lending standards, outright manipulation of the mortgage 
market place, and the loss of personal responsibility are at the root 
of the crisis. Such a crisis demands significant, meaningful reforms to 
prevent hardworking American families from being drawn into mortgages 
they cannot afford. This past Thursday, I voted against H.R. 1728 
because it does not get us there.
  H.R. 1728, the Mortgage Reform and Anti-Predatory Lending Act, has 
some good features, but falls woefully short of serious reform. There 
are so many exceptions and caveats that lenders can still do most of 
the very things that got us into this crisis to begin with. Incentives 
that encouraged mortgage originators to lead people into mortgages they 
could not afford are not eliminated. New standards focusing on the 
borrower's ``ability to pay'' and ``net tangible benefit'' are a good 
start to meaningful reform, but the provisions enforcing these ideas 
are weak, untested, and definitions are left to regulators. Moreover, 
Wall Street's secondary mortgage market is protected from lawsuits and 
weaker Federal regulations are allowed to preempt stronger remedies 
currently available through state laws. It is not responsible for 
Congress to pass legislation that purports to prevent improper mortgage 
practices and market manipulations when in reality little will change. 
I do not agree with putting politics above good policy.
  The bill gives regulators 12 months to promulgate a code and another 
6 months to put that code in place. Congress should instead use that 
time to legislate good regulations, regulations that can outlaw the 
irresponsible practices that led to our current crisis. We have allowed 
the economy to become dominated by banks that are ``too big to fail,'' 
banks that created this mess and asked the public to get them out. This 
bill trusts the actors who led us into the current crisis not to give 
into avarice and again find ways to manipulate the system, while 
creating obstacles for the small banks and credit unions that acted 
responsibly and had nothing to do with creating this crisis. We must 
take greater care to define what is permissible. We can and we must 
demand greater responsibility as we look to reestablish a functioning 
financial system.
  In the final analysis this bill still allows Wall Street gamblers to 
bet on you losing your home. This bill does not make us anymore 
personally responsible than before. It does not require 10 percent cash 
down payments and 30 to 40 percent debt to income ratios; if the 31 to 
38 percent standards were good enough for TARP and Treasury mortgage 
refinance and modifications, why not include those standards here? 
Subprime mortgages are not banned. Securitization of mortgages is still 
allowed and therefore makes your house still subject to speculation 
beyond your control. Big profit motivated investment banks and hedge 
funds, which are still allowed to play their games in the mortgage 
market in Wall Street's quest for the Holy Grail of ``liquidity'' over 
safety for homeowners. These issues need to be proscriptively addressed 
if there is to be any meaningful reform of the mortgage market. There 
is a reason the system worked well when community banks and credit 
unions that knew you personally guaranteed you the opportunity to own a 
home.

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