By Congressman Paul E. Kanjorski 

Several years ago, an unusually high number of homeowners in the Poconos began to call me about their foreclosure problems stemming from predatory mortgage lending practices.  To learn more, I convened a hearing in 2004 at East Stroudsburg University .  After that hearing, I worked to draft legislation aimed at ending many of the worst practices.

My bill sought to license and monitor mortgage brokers.  It also aimed to protect against colluding appraisers who artificially inflated home values.  Moreover, it would have established strong underwriting standards for all subprime mortgages.  Throughout 2005 and 2006, I sought to develop a bipartisan compromise on these matters, but the House Republican leadership halted these discussions.

In 2007, however, the Democratic House did finally pass legislation that contained each of the essential elements found in my 2005 bill.  Additionally, the mortgage broker licensing system that I first proposed in 2005 did finally become law this summer.  I am hopeful that the Senate will now act on my other proposals to strengthen lending standards, improve mortgage servicing, and enhance appraiser oversight.

The current economic crisis started with the collapse of the housing bubble.  Had my legislation become law in 2005, we may have saved many families from foreclosure and prevented some of the country's largest financial institutions from collapsing.  Instead, we now must clean up the mess of reckless cowboy capitalists who let their greed overwhelm their own common sense.

With some hard work, patience, and common goals, we can get our economy back on track, restore confidence, and put in place a modern regulatory system.  We have already started that work.  In addition to improving mortgage lending, I have long pushed for regulating complex financial derivatives and requiring greater disclosures by hedge funds.  With a Democratic Congress and President, I have no doubt that next year these proposals and others will form the basis for a new regulatory structure for the financial services industry.

For far too long, too many people believed that government is not the solution to our problems.  Instead, they viewed government as the problem.  President Bush's disastrous economic policies of the last eight years have ended that thinking.  Unfettered markets cannot control reckless greed.  The era of deregulation is over.

Effective government regulation must rein in the worst excesses of the private sector.  We cannot, however, let these regulations strangle the creativity and entrepreneurial spirit of the American people.  It is a delicate balance, and I look forward to taking on this tremendous challenge.  Always foremost in my mind as our first priority will be protecting the savings, homes, rights, and financial security of American consumers.

We face some tough economic times ahead, but I am convinced that we will emerge from this crisis stronger than ever, as long as we live by the fundamental values that made our country great:  We must learn to live within our means, we must take care of our neighbors, and everyone must play by the rules.  Together, we can do this.