Depository Institution Community Development Investments Enhancement Act

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 1175 and ask for its immediate consideration.

Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentleman from Texas (Mr. Sessions). All time yielded during consideration of the rule is for debate only.

Mr. Speaker, I yield myself such time as I may consume, and I also ask unanimous consent that all Members be given 5 legislative days in which to revise and extend their remarks on House Resolution 1175.

Mr. Speaker, House Resolution 1175 provides for consideration of the Senate amendments to H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act of 2008.

The rule makes in order a motion by the chairman of the Committee on Financial Services, Mr. Frank, to concur in the Senate amendments with three House amendments. The rule provides 3 hours of debate on the motion, with 2 hours controlled by the Committee on Financial Services and 1 hour controlled by the Committee on Ways and Means. The rule also provides for a division of the question on the adoption of the three House amendments listed in the Rules Committee report.

Mr. Speaker, I think we all know why this rule and the underlying bill are so important. Millions of Americans are confronting the growing prospect of losing their home. Hundreds of thousands, if not millions, have already lost their home in a foreclosure epidemic that is the legacy of the subprime mortgage crisis.

According to recent reports, the most severe real estate recession in decades is going to continue to weigh down the economy, the pace of foreclosures is going to continue to rise, and homes continue to lose their value at increasing rates. This foreclosure epidemic has spread to virtually every major city in the United States.

What the Committee on Financial Services has done here is brought us a bill that addresses this problem directly. It's not a bill that intends to lay blame. There is plenty of that to go around. It's a bill that's intended to solve a problem.

Here are some of the sobering facts about the problem:

The number of homes entering foreclosure in the first 3 months this year was double the same period as last year.

One in every 194 homes received a foreclosure filing in the first quarter of this year.

And home prices are down, on average, 12.7 percent, which is basically the first time that's happened since the Great Depression in the early 1930s.

As the foreclosure trends intensify, the problem can only get worse. As foreclosure signs go up in neighborhoods, the value of the property in that neighborhood declines, even if the creditworthiness and the ability to pay of the homeowner is as strong as ever.

Mr. Speaker, this legislation is about, as I mentioned, solving a problem. It creates opportunity for the lenders and the mortgage servicers to minimize their loss; it provides an opportunity for homeowners to stay in their homes, but it shares the pain as well as the opportunity. In order for lenders to take advantage of the opportunity presented in this bill, they are going to have to write down the value of the loan consistent with the current appraisal value. In order for homeowners to have an opportunity to participate in this program, they are going to have to give up the equity that they thought they had, including any moneys they had paid in downpayments.

House Resolution 1175 provides for the consideration of three House amendments to the Senate amendment to H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act of 2008.

Amendment No. 1 includes H.R. 5830 regarding the FHA refinancing, H.R. 1852 regarding FHA modernization, H.R. 1427 regarding government- sponsored entity reform, those being Fannie Mae and Freddie Mac, and H.R. 1066 regarding community development investments, among other bills. Each

piece of legislation in this amendment has already been passed by the House so we are really going over work that this entire body has considered before, or it has been rigorously debated and amended through the committee process in Financial Services and Ways and Means.

Amendment No. 2 includes H.R. 5720, the Housing Assistance Tax Act of 2008 under which middle-class families would be eligible for a loan of up to $7,500 toward the purchase of a new home, and homeowners filing jointly would receive an additional deduction from their property taxes of $700. States will also receive a temporary increase in low-income housing tax credits and $10 billion of additional tax exempt bond authority for low-interest loans to build low-income rental housing and to refinance certain subprime mortgages.

One of the underlying causes of the subprime crisis was that more and more Americans who wanted to rent couldn't and had to get themselves housing by getting into loans they couldn't afford.

Amendment No. 3 is a bipartisan amendment offered by Congressman Miller and Congressman LaTourette regarding the preemption of State laws regulating foreclosure.

The centerpiece of this legislation is H.R. 5830, the FHA Stabilization and Homeownership Retention Act included in amendment No. 1. That bill would enact a voluntary program, voluntary, for homeowners and lenders, and I emphasize voluntary, nothing is being forced on anyone except the opportunity to work this out. The process would begin with a homeowner or servicer of an existing eligible loan with an FHA- approved lender, and the FHA-approved lender would then determine the size of the loan that meets the requirements of the program and that the borrower could reasonably repay. The plan targets a group of homeowners who would be able to stay in their homes if they had a reduction in principal and monthly servicing charges.

The Congressional Budget Office says that this legislation could save 500,000 mortgages from foreclosure. Other estimates put that number much higher, at over a million.

Just as important as keeping Americans in their homes, this legislation protects American taxpayers. The government's liability under this program is limited and only applies if a borrower defaults and the amount recovered in foreclosure is below the outstanding debt still owed. This is a program that will be paid for largely by the folks participating in it and benefiting from this option as an alternative to foreclosure, and that is through a series of financing and copayments that will be assessed at the time of closing as the life of the loan continues through fees for a period of about 5 years.

There are going to be about $300 billion made available under this bill for guarantees, but the CBO scored the legislation as having an outside risk to taxpayers of about $2.4 billion. And I would like to have my colleagues think about that for a moment in the context of the $29 billion that was made available to back the rescue of the investment banks when Bear Stearns collapsed.

The biggest cost to the taxpayer would be to let the economy unravel, to let neighborhoods decay, and to let thousands if not millions of homes go into foreclosure.

Mr. Speaker, H.R. 5830 and other critical parts of this legislation provides an avenue to stability, to restoring economic stability to our neighborhoods, to our working families in this country, and to our lenders. We all thank the excellent leadership of the Committee on Financial Services and the Committee on Ways and Means for working together, Republicans and Democrats, to bring this legislation to the floor for consideration.

I reserve the balance of my time.

Mr. Speaker, I yield 3 minutes to the gentleman from Georgia (Mr. Scott).

I yield the gentleman an additional 1\1/2\ minutes.

Mr. Speaker, I yield 3 minutes to the gentleman from Texas (Mr. Al Green).

Madam Speaker, I yield 3 minutes to the gentlewoman from Texas (Ms. Jackson-Lee).

(Ms. JACKSON-LEE of Texas asked and was given permission to revise and extend her remarks.)

Madam Speaker, I yield 3 minutes to the gentlewoman from New York (Mrs. Maloney).

(Mrs. MALONEY of New York asked and was given permission to revise and extend her remarks.)

Madam Speaker, I yield 1 minute to the gentleman from Georgia (Mr. Scott.)

I yield the gentleman an additional 30 seconds.

Madam Speaker, at this time, I will continue to reserve the balance of my time.

Madam Speaker, I continue to reserve my time.

I have at least one, and some who have requested but who have not yet arrived on the floor.

Madam Speaker, I yield 1 minute to the gentlewoman from Texas (Ms. Jackson-Lee).

I thank my friend from Texas. We have no additional speakers at this time, and I will be the last speaker.

Madam Speaker, I will be happy to engage my good friend from Alabama and both of us go to the Department of Justice, the SEC and begin to file legal action against the unscrupulous investors on Wall Street who took these mortgages knowing that they had a cheap deal. If he will join me, we will walk down to the Department of Justice right now to get the Attorney General to begin filing major litigation against these scandalous, unscrupulous individuals, if that's what he would like to do.

But right now on the floor of the House we have major legislation that is going to address the question of the suffering of Americans. And I'm going to take this brief opportunity to acknowledge the bill sponsored by my good friend and colleague, Congresswoman Waters, on H.R. 5818. We've passed the rule, but I want to support the underlying premise that once we get through with the major reconstruction, that the bill that we are now discussing and the rule that we're now discussing, we will have $15 billion to go into these communities and be able to buy back these properties and to take them off of the streets and to make sure that low-income individuals that need affordable houses, families that are broken because of the foreclosure scandal will be able to get back into their community. This is good legislation.

Now, as we move forward on the FHA stabilization on the Senate amendments that we're now discussing, the American Housing Rescue and Foreclosure Prevention Act, let us put this in the right perspective. We lost 20,000 jobs in April. We have the bailouts of corporate America everywhere you can see. Airlines are merging, Bear Stearns got $42 billion or more to bail them out, and yet my good friends on the other side of the aisle are not interested in having us do things that the President wants us to do.

He wants us to have, if you will, the government sponsored enterprise reform. He wants us to fix Freddie Mac. He wants us to fix Fannie Mae. He wants to make sure that we provide for disabled veterans. He wants us to be able to invest in the important housing matters, and he wants to make sure that we put Americans back in their houses and put them right side up.

We're not in a recession; we're moving towards a 1929 depression. And I don't know why the other side cannot wake up. This is a good rule for a good bill.

As we make this march toward passing this legislation, I hope that we will also include that those who have lost good credit ratings because they suffered a foreclosure will be able to get back into the good credit rating by being eligible for these programs. Let us not punish those that fell victim to foreclosure because of unscrupulous practices that we're fighting against and their credit score went down to keep them from getting another house. Let's make sure we work that out. That is an idea and an amendment that I have, and I look forward to working with the committee so that as we move forward, we can get this done.

Again, if you can bail out Tom, Dick and Harry, you can at least bail out Mrs. Jones, Mrs. Smith and Mr. Garcia, because these are the hardworking Americans. I stand with them.

Let them stand with the big, rich guys all the time.

Madam Speaker, I rise in support of H. Res. 1175, the Rule Providing for Consideration of H.R. 3221, the ``American Housing Rescue and Foreclosure Prevention Act of 2008.''

I am pleased to support this much needed Housing and Urban Development legislation, to help States purchase and rehabilitate foreclosed homes to stabilize as many properties as possible.

All Americans--homeowners, lenders, communities--indeed our entire economy is worse off when a foreclosure occurs and when significant quantities of homes are foreclosed in a short amount of time.

H.R. 3221 responds directly to the current crisis facing middle class Americans while providing the tools to prevent a repeat of these problems. Modernizing the FHA and reforming the Government Sponsored Entities, GSEs, will provide crucial liquidity to our mortgage markets now, and also strengthen regulation and oversight for the future.

This legislation will begin to repair not bailout the economy, restoring confidence in the markets, limiting the damage to families and neighborhoods, and rejuvenating the communities with new affordable housing.

Texas

There are five steps in the foreclosure process: Step 1: delinquency; Step 2: Notice to cure, where the lender notifies borrower of delinquency and gives him 20 days to amend the problem; Step 3: Default notice and posting--in Texas, foreclosure sales occur on the first Tuesday of the month; Step 4: Foreclosure sale--if borrower is unable to cure default, the property is sold; and Step 5: Active foreclosure.

While there are five steps there are only two stages: Preforeclosure and active foreclosure. In looking at those two stages we see where Texas stands. Last year, Texas ranks fourth behind California, Florida, and Illinois in preforeclosures. Active foreclosures are foreclosed properties sold at auction and now in the lenders' real estate owned accounts. Texas held the top seat in 2007 for active foreclosures. While being number one is something Texans usually strive for, in this case we'd prefer to be much farther down the list.

Texas reported 13,829 properties entering some stage of foreclosure in April, a 16 percent increase from the previous month and the most foreclosure filings reported by any State. The State documented the Nation's third highest State combined foreclosure rate--one foreclosure filing for every 582 households.

Dallas County documented the most new foreclosure filings of any county in the region and a foreclosure rate of one foreclosure filing for every 320 households, an 18 percent increase from the previous month.

Texas and what HUD is Doing

In March, the Department of Housing and Urban Development, HUD, announced the Texas State Program and the cities of Houston and New Braunfels will receive a total of $234,868,077 to support community development and produce more affordable housing. HUD's annual funding will also provide downpayment assistance to first-time homebuyers; assist individuals and families who might otherwise be living on the streets; and offer real housing solutions for individuals with HIV/

Will the gentleman yield?

Were you referring to my remarks? I have great respect for the gentleman. I assume that he was not suggesting that I am a liar.

I would appreciate not having the words drawn down, but I am yielding to the gentleman to just correct the record.

But are you calling me a liar?

Well, I am just asking you if you are calling me a liar. If the gentleman will yield.

Is the gentleman calling me a liar on the floor of the House?

Is the gentleman calling me a liar?

Madam Speaker, parliamentary inquiry.

I thank the gentleman and I thank him for his leadership.

We will address the question of our differences when we vote and when I review the transcript, but I think it's important to note that my words spoke directly to conditions that we're in, that is, a recession that might move toward a depression.

And I thank the gentleman from Georgia who mentioned from the Joint Economic Committee, Americans have much of their savings in their homes. Families in a majority of States will lose more than $2.6 trillion. That sounds like a recession and a depression to me.

A housing crisis affects the broader economy. We're going to be losing $166 billion in foreclosures. We have got to act.

And so we may have a difference, but there is no lying or untruth when we talk about a recession and a depression, and I know my good friend from Texas did not intend to misrepresent that those of us who have a difference of opinion, while we're on this floor to help save the homes of millions of Americans and to help provide engine to the economic activity, are wrong.

We're right and the documentation shows it, and it is not an untruth, and it certainly is not a lie.

Mr. Speaker, I want to thank my friend from Vermont for yielding me this time to discuss the proposed rule for consideration of this omnibus package of legislation being returned from the Senate.

On behalf of the Republican Conference, Mr. Speaker, I rise in strong opposition to this closed rule and to this entirely closed process which is being manipulated for the sole purpose of silencing 430 Members of Congress and denying the Republican minority a motion to recommit.

I want every single Member to understand what today's vote really does mean. It means a vote for this rule is going to give only Ways and Means Chairman Charles Rangel, Financial Services Chairman Barney Frank, and Speaker Nancy Pelosi the opportunity to determine the shape of this legislation.

Mr. Speaker, that means that for anyone who is tuning in to watch today's debate on C-SPAN who is not sitting in Harlem, New York City; New Bedford, Massachusetts; or San Francisco, California, your vote is being silenced by the new majority's rule.

A vote for this rule is also a vote to once again break the Democrat leadership's numerous campaign promises to provide this House with regular order, including the bare minimum that can be done to protect minority rights through the inclusion of a Republican substitute.

I wish I could say that this disavowal of last year's campaign promises is precedent setting. Unfortunately, breaking these promises to the House and to the American people has become all too common in what has officially become the ``most closed Congress in history.''

What is precedent setting about this rule is that it directly contradicts the past statements of the chairman of the Committee on Financial Services, Chairman Frank, who prior to today's rule had an unblemished record of at least asking for his party leadership and the Rules Committee to stick to their word.

In the past Rules Committee hearings, Chairman Frank has advocated allowing this House to debate amendments:

(1) where there is a genuine issue of public policy;

(2) that allow for debate of a significant issue; and

(3) when amendments are germane and not duplicative.

Despite the fact that the broken promises Democrat majority made it clear that no amendments, not even significant, genuine, germane and unique ones would be considered by this House, 10 Republicans brought amendments to the Rules Committee that would have met each and every one of these prior requirements.

Unsurprisingly, all of these thoughtful amendments were summarily denied by the Rules Committee last night in what might well be renamed the ``Graveyard of Good Ideas Committee'' in the House of Representatives.

So despite the fact that there is no policy reason for completely shutting down the legislative process and even going so far as denying the minority a basic motion to recommit in moving this unvetted omnibus through the House, the Democrat majority has once again taken the path of least political resistance. And in doing so, they have again diminished this institution and the rights of the overwhelming Members who have a privilege to serve in this body.

Because the Republican Members of this House overwhelmingly oppose this lock-down rule that denies our party any substantive input into this process, including any amendments from a taxpayer bailout that may or may not solve the problems that it claims to, I have a number of Members who are interested in speaking up against this rule. I plan to save the majority of my time for them to provide their own thoughts on the shortcomings of this bill.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, for 17 months this new Democrat majority has led this country down their pathway of what they want, higher taxes, more spending, which has resulted in the gasoline crisis that we have today by cutting off supplies that would come to make America energy independent. And here we are now with a housing crisis. After all the years that we've had a growing economy, no wonder our country's in trouble. The new Democrat majority has taken over.

Mr. Speaker, I yield 5 minutes to the gentleman from San Dimas, California, the ranking member of the Rules Committee, Mr. Dreier.

Mr. Speaker, at this time I would like to yield 5 minutes to the gentleman from Alabama, the ranking member of the committee, Mr. Bachus.

Madam Speaker, my good friends on the other side need to bone up on their language, I believe. A recession is confirmed when there are two quarters where the economy is down. We have not even reached that point yet, and yet already we find out on the floor that the Democrat Party is willing to say we're in a complete crash equal to 1929. My gosh. Let's at least tell the American people the truth.

We can get over the problems that we have in this country, but let's not make things worse than what they already are. Let's not lie to the American people. Let's tell them the truth. Let's provide leadership. Let's show them the right way. Let's have an open bill. Let's get the things done that need to be done.

I yield to the gentlewoman from Texas.

I did not suggest that at all.

I will be point blank to the gentlewoman. The gentlewoman said, We are headed to a recession like 1929.

And that is not a true statement.

It's not a true statement.

We have not blown through any sort of recession.

Madam Speaker, at this time I would like to yield 2 minutes to the gentleman from Georgia (Mr. Price).

Madam Speaker, I would like to yield 2 minutes to the gentleman from Texas (Mr. Neugebauer), a member of the Committee on Financial Services.

Madam Speaker, at this time, I yield 2 minutes to the gentlewoman from Illinois (Mrs. Biggert).

Madam Speaker, if I could inquire of the time remaining for both sides, please.

I thank the Speaker.

Madam Speaker, at this time, I yield 2 minutes to the distinguished gentleman from Dallas, Texas (Mr. Hensarling).

Madam Speaker, at this time, I yield 2 minutes to the gentleman from Florida (Mr. Mario Diaz-Balart).

Madam Speaker, I would like to inquire of my colleague if he has any additional speakers. I have one additional speaker, then our close.

Madam Speaker, at this time I yield 2 minutes to the distinguished gentleman from Indiana (Mr. Pence).

(Mr. PENCE asked and was given permission to revise and extend his remarks.)

Madam Speaker, I want to inquire of my colleague if he has any additional speakers or where he is in that process, as I am to close the next time I use my time.

Mr. Speaker, this is the most important issue facing the American people today, and it is so important that the American people are watching this debate to see, as we are focusing our energies on this and to also, Mr. Speaker, take a look at the other side and the unfortunate distractions. We are not dealing with the war supplemental here. We are dealing with the issue that is on the minds of the American people. The American people are hanging on by their fingernails to their houses. Millions of families are losing their homes. An average of 7,500 people every day in this country are filing for foreclosure on their homes. As we debate this bill in this one hour

alone, there will be 875 people who will file for foreclosure in each hour we are debating. That is important, Mr. Speaker.

There is nothing more important on the American people's minds than to do something that brings some reasonable end to this miserable nightmare we are in as a result of this mortgage-foreclosure issue.

Millions of families are seeing their home values drop. Trillions of dollars of household wealth and property values have been lost. Homeowners now owe more on their mortgages than their homes are worth, and the housing mortgage crisis has caused businesses to lay off workers. Hundreds of thousands of Americans have lost their jobs. This is what is at stake, Mr. Speaker.

In terms of liquidity, we are in the worst economic times since the Great Depression, and that is why it is important that we lay this backdrop so the American people can see what we are doing to respond to this issue that is before us today in H.R. 5830 which is a very thoughtful, which is a very responsive response to this very, very serious issue. H.R. 5830, the FHA Housing Stabilization Homeownership Retention Act is the answer to this problem. I commend Chairman Barney Frank for having the foresight in our Committee on Financial Services to put it forward.

Essentially what it does is it gives just $300 billion in authority, not cost, Mr. Speaker. It is very important because I know the other side is going to come and talk about a $300 billion bailout. This is a bail-in that is going to cost the American taxpayers just $2.7 billion that has been outlaid and scored by the Congressional Budget Office.

Later in the debate we will explain exactly what these costs are. And what this bill will do, it will ensure a refinancing of loans for borrowers who are struggling to afford their current mortgages. Participation is voluntary. The mortgage holder would have to agree to a substantial reduction of the current loan's outstanding principal and provide new loans that that borrower can afford.

That is what is important here, Mr. Speaker. What we are seeing on our side as what is critical is keeping people in their homes. And in order to do that, we are simply offering that we extend the FHA ability to authorize and simply place a guarantee of loans up to $300 billion which in fact is a $300 billion reinvestment in our economy. And again as I mentioned, the cost is only $2.7 billion.

To help defray the government's cost and prevent unjust enrichments such as borrowers' flipping, the bill requires that the borrower shares with the government a substantial position of any profits from selling or refinancing homes.

Mr. Speaker, I come from the State of Georgia which is suffering dramatically because of home foreclosures. The State of Georgia ranks number eight in home foreclosures.

It is at the top of my agenda to make sure that we bring some relief, certainly to the people of my beloved State of Georgia, but certainly the 13th District, which even has a greater preponderance of foreclosures because of the subprime mortgage meltdown. This is extremely important.

And, Mr. Speaker, as I conclude, let me just say this point.

I will continue that point in the debate.

Will the gentleman yield?

It has been made clear, my good friend from California, by the Federal Reserve, by noted economists from my beloved school of Wharton, as well as Harvard, that in terms of liquidity, we are in the worst times of depression.

Liquidity.

Madam Speaker, I just wanted to correct an

item. I made the statement about us having the worst times since the Depression. I want to bear those facts out. So I want you to know that I am telling the truth.

In this statement from the Joint Economic Committee, it says mortgages exceed equity in homes with falling housing prices. More than 10 percent of homeowners now owe more on their mortgages than their homes are worth. Homeowners' debt on their houses exceeds their equity in their homes for the first time since 1945. In terms of liquidity, money in the marketplace, it is the worst time since the Depression.

Now the important thing to understand as we move forward is to understand the seriousness of the condition. You bring up gas prices. We bring up food prices. We've got all of these problems, but today, the American people are expecting us to deal with the housing crisis.

Let us deal with the housing crisis. We've got several problems to deal with. And simply because we're dealing with the housing prices, you come down here and want to throw up the gas prices as if to say we've got to deal with that, then the other. We're going to deal with each of those items.

But today, this day, we have housing bills that are on this floor, and we owe it to the respect of the American people to give it the integrity, to give this issue the respect and the seriousness that they demand of this House, and let us stop playing games.

I thank the gentleman for yielding and for his leadership on this very important rule, and I rise in strong support of the rule and for the underlying bill, a housing stimulus package that will provide real relief for struggling homeowners and will bring certainty to the markets.

We are at a critical juncture in the subprime mortgage crisis. All of the data we have clearly demonstrate the severity of the problem. We have seen the perfect storm of stagnant wages, rising mortgage payments, and decreased home values, all of which have led to a record level of delinquencies and foreclosures. One recent study by the Pew Charitable Trust has found that one in two New York homeowners is projected to face foreclosure, primarily in the next 2 years, due to the subprime crisis.

This same study documents the ripple effect this crisis is having on our entire economy. Their analysis found that 52 percent of all homeowners will likely feel the ripple effect of foreclosures from the subprime loan crisis. Communities are negatively affected as foreclosures drive down home prices overall, diminishing homeowners' equity in entire neighborhoods. Costs also accrue to our local government in the form of lost tax revenue and direct expenses for securing, policing, and disposing of abandoned properties.

This is why this housing stimulus package is so terribly important. This is a well-crafted package which includes an expanded FHA Refinance Program totaling $300 billion. This voluntary program would permit FHA to provide up to $300 billion in new guarantees to help refinance at- risk borrowers into viable mortgages.

The only way we are going to solve this problem is through a multi- prong strategy. We have fully engaged the regulators, industry is working with homeowners; but we also need sound public policy that allows for many of these unaffordable subprime loans to be refinanced into viable mortgages homeowners can afford.

Another key part of this package includes the FHA and GSE modernization bills which we have already passed in this House but has yet to pass the Senate. The FHA bill will modernize the program opening it up to new homeowners and providing opportunities for long-term fixed mortgages. The modernized FHA will be the new financing option of many previous subprime borrowers, and it will be done in a way to ensure borrowers are receiving viable and affordable loans. The GSE bill will provide for a strong dependent regulator for Freddie Mac and Fannie Mae and the 12 Federal home loan banks.

Again, this is a well-crafted package. I ask permission to revise and extend to include all of the important parts of this package.

I urge a ``yes'' vote on this underlying bill.

I rise in support of a housing stimulus package that will provide real relief for struggling homeowners and will bring certainty to the markets.

We are at a critical juncture in the subprime mortgage crisis. All of the data we have clearly demonstrates the severity of the problem.

We have seen the perfect storm of stagnant wages, rising mortgage payments and decreased home values. All of which have led to a record level of delinquencies and foreclosures.

One recent study by the Pew Charitable Trust has found that one in 32 New York homeowners is projected to face foreclosure, primarily in the next two years, because of subprime loans.

This same study documents the ripple effect this crisis is having on our entire economy. Their analysis found that 52% of all homeowners will likely feel the ripple effects of foreclosures from subprime loans.

Communities are negatively affected as foreclosures drive down home prices overall, diminishing homeowners' equity in entire neighborhoods. Costs also accrue to local governments in the form of lost tax revenue and direct expenses for securing, policing and disposing of abandoned properties. That is why this housing stimulus package is so important.

This is a well crafted package which includes an expanded FHA Refinance Program totaling $300 billion.

This voluntary program would permit FHA to provide up to $300 billion in new guarantees to help refinance at-risk borrowers into viable mortgages.

They only way we are going to solve this problem is through a multi- prong strategy. We have fully engaged the regulators, industry is working with homeowners, but we also need sound public policy that allows for many of these unaffordable subprime loans to be refinanced into viable mortgages homeowners can afford.

Another key part of this package includes the FHA and GSE modernization bills that we have already passed the House, but have yet to be passed by the Senate.

The FHA bill will modernize the program opening it up to new homeowners and providing opportunities for long-term, fixed mortgages. The modernized FHA will be the new financing option of many previous subprime borrowers and it will be done in a way to ensure borrowers are receiving viable and affordable loans.

The GSE bill will provide for a strong independent regulator for Freddie Mac, Fannie Mae and the 12 Federal Homeloan Banks. It will also enhance Freddie and Fannie's mission to provide affordable housing. This bill will also make permanent the increased loan limits passed as part of the economic stimulus package. This increase is incredibly important in high-cost areas such as New York City in ensuring these products are available to our constituents.

Again, this is a well crafted package and I urge my colleagues to support it.