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WASHINGTON- Today, House Democrats forced passage of their “cram down” housing bill, the Helping Families Save Their Homes Act of 2009, legislation that allows bankruptcy judges to adjust the terms of a mortgage and in turn, punish the over 90 percent of responsible homeowners who lived within their means by forcing them to subsidize those who made irresponsible choices. After the vote, Congressman Henry E. Brown Jr. (R-SC) made the following statement:
“During a time when fiscal responsibility is being encouraged, and families across the First District of South Carolina and the rest of the nation are tightening their purse strings, this Congress continues to approve legislation that disregards these qualities, and in fact, is spending frivolously and rewarding individuals who are living beyond their means.
The housing crisis is at the heart of our economic troubles, and while I understand that there are individuals that are really hurting and are in desperate need of government support, the Democratic Congress continues to reject common-sense approaches that will go far towards helping these struggling individuals keep their homes. In fact, this bill’s “cram down” provision will actually put millions of homeowners and potential buyers at greater risk of an unstable credit and housing market and create high interest rates in the future.
Simply making this cram down available to all existing mortgages, with no distinction between prime loans and subprime loans, will reduce the incentives for approximately 50 million solvent home borrowers to keep making payments on their mortgages. My Republican colleagues and I are determined to create a solution that the American public can support and that will responsibly stabilize the struggling housing market while continuing to encourage hard work and fiscal responsibility to achieve the American dream.
The right way to address the housing crisis and to truly provide for those hurting Americans is not to give irresponsible borrowers a bankruptcy bailout. Congress instead should act on the Fairness in Housing Recovery Act, legislation I am proud to cosponsor. This bill would help troubled borrowers refinance into loans that better meet their family budgets, while also addressing several legal and financial roadblocks that are now preventing homeowners from refinancing.”
Republican’s also offered a Motion to Recommit, prior to the vote, in an attempt to ensure that unscrupulous and irresponsible actors will not be bailed out by the overwhelming majority of working families that have lived responsibly within their means. While it failed, the MTR would have removed mortgage default incentives, a key provision to protect taxpayers from greater exposure and ensure fairness to responsible homeowners.
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