Mr. Speaker, Congress has yet to send a single bill to the President that might begin to address turbulence in the housing market. Yet, here we are again, debating controversial, new housing legislation instead of passing common-sense housing reforms that could start helping homeowners today.
I appreciate Chairman Frank’s inclusion of FHA and GSE reform, as well as funding for housing counseling, in the bill we are considering today. These are much-needed reforms that could increase liquidity in the housing market, provide consumers with an alternative to bad, subprime loans, and help to restore consumer confidence. But attaching them to a massive, taxpayer-funded bailout will not get them any closer to the President’s desk.
And make no mistake, this bill is a bailout. It would place U.S. taxpayers on the hook for up to $300 billion of the riskiest mortgage debt on the market. It does this by allowing the speculators, borrowers who cheated, and those who invested irresponsibly to pawn off their financial liabilities on the U.S. taxpayers.
And instead of serving distressed homeowners, the bill requires that lenders make the decision to place a mortgage into the program. Since lenders are likely only to dump bad loans on the federal government, taxpayers will be bailing out banks and investors on their most unwise lending decisions.
Even more disturbing, the bailout is partially funded on the backs of seniors through changes to the FHA’s reverse mortgage program.
Mr. Speaker, we shouldn’t be asking Americans taxpayers to pay for the mistakes of those who lied about their income on mortgage applications, or scam artists that inflated appraisals and flipped properties. Nor should they pay for irresponsible homeowners who chose to live beyond their means – using inflated home equity loans to buy a new plasma TV, a swimming pool, or fancy car. It’s not fair to those who saved and invested responsibly.
The majority of Americans are working hard to make ends meet. 93 percent of mortgage holders are making their payments on time and others are prudently renting because they aren’t ready to own a home. These hard-working Americans should not be forced to foot the bill for the bad decisions of those who gambled that the home values would never stop rising.
I understand that many of my colleagues are looking at the economic effects of the housing bubble and saying to themselves, “We must act, we must do something.” But we shouldn’t do something if that something is wrong. Congress can help struggling borrowers and promote economic growth without burdening the taxpayers with inappropriate spending.
That’s why I’ve joined with Financial Services Committee Ranking Member Bachus and Congresswoman Capito to offer an alternative plan that helps homeowners in a responsible way. It includes FHA reform, resources to crack down on mortgage fraud, funding for housing counseling, and other reforms that can start helping homeowners NOW. It also provides liability protection for lenders that help struggling homeowners to refinance and eventually repay their loans.
And unlike the bill we are considering today, it would modernize the GSE regulator without siphoning away resources from Fannie Mae and Freddie Mac for a new housing trust fund. Fannie Mae just reported significant losses, and economists are concerned that a lack of capital at the GSEs could pose a systemic risk to the financial markets. Now is clearly not the time draw off their revenues for a Congressional slush fund.
And through improved disclosure, lender registration, and higher appraisal standards, our bill would do more than put an expensive band-aide on the housing market – it begins to address the underlying causes of the subprime mess. It will ensure that borrowers have access to legitimate loans, that they understand the terms of their loan, and that they are taking a loan they can afford based on the actual value of the house.
Mr. Speaker, instead of even allowing a vote on these bipartisan reforms, House leaders have chosen to completely shut out any Republican amendments on the House floor. That’s the wrong thing to do for our economy and it’s the wrong thing to do for the American people.
We need to bring transparency and integrity to the home buying process. And we need to expand access to credit for worthy borrowers who genuinely want to pay off their loans. But we need to do it without wasting taxpayer dollars. Republicans have an alternative bill, which includes provisions supported by both Democrats and Republicans. It’s a commonsense plan that doesn’t spend taxpayer money. Coupled with Mr. Terry’s tax credit for owner-occupied home buyers, it will help jump start the flailing housing market and get our economy back on track.
My colleagues on the other side of the aisle should have allowed our Republican alternative to be considered. Americans deserve a vote on a bill that can help homeowners without bailing out irresponsible and reckless actors using taxpayer money. That’s why I urge my colleagues to vote against the bill before us today.
I yield back the balance of my time. |