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Congressman Barrett speaks in opposition to H.R. 3915

Thursday November 15, 2007

I have a lot of faith in the American people. I believe that, given the proper tools, they can best decide how to spend their money. I also believe that they can best determine how to borrow money, just as lenders can best determine who should be lent money. In other words, I trust in free choice and the free market. Businesses should be able to take risks as should consumers. And with these risks, there are consequences.

However, I understand that we have a major problem on our hands, a problem that has spread far beyond the housing market to the heart of the American economy. Some homeowners are struggling to make mortgages that they can’t afford and financial institutions are stuck holding mortgages that will not be repaid. But to say all sub-prime mortgages are bad is an incorrect conclusion. And I am sure that homeowners who have been afforded access to mortgages because of legitimate innovation in the private mortgage market would agree with this.

Unfortunately, this legislation will not help those who today are in danger of losing their houses, and it will certainly not help the availability of credit for those purchasing homes in the future. This legislation will not add confidence to the credit markets, and it will not help our housing market find its footing.

I was a small business owner and I understand that when we make certain types of loans cost prohibitive by adding burdensome regulations or liability, those loans will simply stop being made. When we ban compensation for certain types of loans, the originators have no reason to make them, especially when they’re now subject to these new regulations and liabilities. Rather than ensuring that this market works smoothly through increased oversight and transparency, we are effectively legislating these loans out of existence and further tightening our credit markets. And that is not a good thing for our housing market, for our economy, or for the free choice of homeowners. Unfortunately, I must oppose HR 3915, and I urge my colleagues to do the same.