Opening Statement of U.S. Representative Judy Biggert (R-IL-13)
Ranking Member, Subcommittee on Financial Institutions and Consumer Credit
House Committee on Financial Services Legislative Hearing on
“Legislative Proposals on Reforming Mortgage Practices”
October 24, 2007
Mr. Chairman, thank you for holding today’s hearing, and I would like to welcome our distinguished witnesses. After nine months, six hearings, and one resolution addressing subprime and foreclosure issues, I’m pleased that we’ve finally reached this day. As we proceed, I would like to outline a few items that I urge my colleagues to take into consideration.
First, do no harm. Our committee should aim to preserve access to credit and homeownership opportunities for qualified low- and middle-income borrowers. While we work to protect homeowners from unscrupulous practices, we should not, for example, characterize all subprime loans as predatory and bad. Of the 68 million American homeowners, 50 million hold mortgages and 13 million of them are subprime mortgages. Approximately 715,000 homeowners with subprime loans are in foreclosure. This number is expected to rise to millions next year, but we must keep in mind that the majority of homeowners will keep their homes. One or more of today’s witnesses may utter the phrase “don’t throw the baby out with the bathwater.” I couldn’t agree more.
Second, what I would like to see as a final product here is one that: facilitates transparency in the mortgage market; creates a level playing field; promotes strong underwriting standards; and fosters competition. Achieving these objectives is important for both primary and secondary mortgage market participants. It’s a win for all if consumers, lenders, and investors more clearly understand loans. Bad actors and bad products are more likely to fall by the wayside. Liquidity and credit will expand, and homeownership is sure to flourish.
Third, I would like to thank the Chairman for his comments today in Politico, in which he was quoted saying that “everything is negotiable.” While I must say I never before have heard him admit that he is not the emperor, I nonetheless appreciate the sentiment behind his quote, and look forward to working with him.
It is important for future American homeowners and the economy that we put political agendas aside and get this right. Too much action and we worsen the problem; too little action and we allow it to happen again. I look forward to working with my colleagues on both sides of the aisle to craft common-sense and balanced legislation.
Thank you. I look forward to today’s discussions. |