Expand and Preserve Home Ownership Through Counseling Act

I dearly wish that this bill was the one being described by so many people on the other side of the aisle. That sounds like a really tough bill. And this bill, I hope, will become tougher as we go along.

I agree with many over there who said that they support the idea of homeownership and want to make sure that there is a mortgage market that lets people buy homes.

Mr. Chairman, the mortgages we are talking about have nothing to do with homeownership. According to the mortgage bankers themselves, who oppose this bill, 72 percent of subprime loans are refinances, not purchase money mortgages. And only about one in 10 subprime loans is to buy a first home. Lehman Brothers says that 30 percent of the subprime loans entered last year will result in final foreclosure, a family being turned out on the streets by a sheriff because their home was sold at a foreclosure auction at the steps of the courthouse.

Do the math. One subprime loan in 10 helps people buy a home, a first home, get into homeownership. Thirty percent will result in foreclosure. The loans that we need to get at, we need to prohibit, are costing Americans homeownership, not helping with homeownership.

Now, several speakers have said that they think the consumers should make choices, there should be a variety of choices available to consumers. Sometimes they say this bill will shut down market innovation. Well, Americans are for innovation, Mr. Chairman, just as they are for reform. Americans are fundamentally reformers so politicians have figured out to call everything they do a ``reform,'' however obviously contrary to the public interest it is. And now American business has learned to call everything they do an ``innovation,'' regardless of how bad it hurts consumers.

I can think of many wonderful innovations. When we think of an innovation, we think of a scientist in a lab coat coming up with new products.

Mr. Chairman, I am now the age my father was when he died of a heart attack in 1965. There wasn't a thing we could do to help people with heart disease in 1965. But I am on a cholesterol medicine because I inherited from my father high cholesterol that I hope will allow me to outlive my father. I think that drug is an important innovation, and I am glad we made that innovation.

Mr. Chairman, this necktie is an innovation. Ten years ago, you could not buy a silk necktie that was stain resistant. And for those folks like me who tend to miss their mouth from time to time, the cost in new neckties in any given year was hundreds of dollars. But this tie has a nanotechnology process that causes liquids to bead up and roll off rather than soak in and stain. This necktie is an important innovation to me.

But what on Earth do we mean when we say that a mortgage is innovative? It means simply that there is no end to the variety of terms, there is a proliferation of indecipherable terms that are not designed to help consumers.

Alan Greenspan called them ``exotic loans.'' Others have called them ``toxic loans.'' The innovation is not really about allowing consumers to tailor narrowly the loan they get to their specific circumstances. The late Ned Gramlich, a well-regarded former Federal Reserve Board governor, asked why was it that the riskiest loans were being sold to the least sophisticated consumers. It was a rhetorical question. He knew the answer. He knew those loans were being sold to people to take advantage of them, to separate from middle-class homeowners more and more of the equity in their home, to trap them in a cycle of having to borrow and borrow again, and every time they borrowed, losing more of the equity in their homes.

Some of the other speakers have talked about the importance of refinancing out. Mr. Chairman, a mortgage system where people have to borrow money to pay off the mortgage they are in now is not a mortgage system that works.

I thank the gentleman.

I would now like to engage in a colloquy with Mr. Frank concerning this. And, Mr. Chairman, both Mr. Frank and I would deeply appreciate a slow gavel on this particular point.

Mr. Frank, please direct your attention to the language at the bottom of page 5 of the manager's amendment, clarifying the prohibition against payments to loan originators that vary with the terms of the subprime mortgage, which, as Mr. Murphy of Connecticut has already pointed out, is an important antisteering provision. The abuse that the prohibition addresses is the payment by lenders to originators, most often brokers, known as a yield spread premium.

Under widespread practice now, lenders pay brokers an additional percentage point in a yield spread premium for every additional half point in interest on the mortgage above the rate that the borrower qualified for. Although borrowers sign a piece of paper agreeing to the payment by the lender, the broker hands the borrower the paper and tells the borrower what the borrower is signing, and most borrowers never realize that the broker makes more money the more that the borrower pays for the mortgage.

I agree with Mr. Murphy of Connecticut, that is a kickback. It is not a legitimate business practice. It needs to change.

Mr. Frank, as I understand it, the clarifying language in the new subparagraph does not simply permit what the previous subparagraph forbids, but it is directed to limited circumstances and does not allow any additional total compensation for an originator. Just as a buyer may pay discount points at closing to buy down the interest rate over the life of the loan, subparagraph (B) allows a consumer to pay more in interest over the life of the loan in return for lower costs and fees at closing.

Is that correct?

And is it also correct that any payment by the lender to the broker, or to use the language of the bill, any incentive compensation paid by any person to any originator, based on a higher interest rate, is still forbidden?

I am glad that Mr. Frank earlier embraced redundancy as a virtue, but I want to continue even though it may be redundant.

So a mortgage originator under this subparagraph, the one we were speaking of a moment ago, will get paid exactly the same in total compensation, including both the compensation paid by the borrower and the compensation paid by the lender, whether the interest rate is 6 or 8 or 10. Is that right?

And so any compensation paid by the lender will be backed out dollar for dollar from what the borrower had agreed to pay; is that correct?

I thank the gentlelady for yielding, and I certainly rise in opposition to this bill. I have no doubt that it is certainly good-hearted but it is certainly wrongheaded.

There is a great challenge in our housing markets today, but I come here with some interest and amusement to see how many of my friends on the Democratic side of the aisle bemoaned the Bear Stearns bailout by the Federal Reserve, only to come here and offer a bill that, ultimately, using the States and localities as a conduit, is going to bail out Wall Street. It's going to bail out the investors, the people who own these properties in the first place, the people who made bad debts.

I wish somebody would introduce a bill to bail me out of my bad debts. Perhaps next time I invest in real estate or the stock market or the commodities, somebody will come here and say, if I failed, we will get the taxpayer to come in and bail me out.

Second of all, it misses the point of what the true challenge is. The true challenge in our housing markets is a shrinking paycheck, and I know as much as our friends on the other side of the aisle wish to come and blame all the economic woes of our Nation on us, the truth is elections have consequences. They've been in charge of the economic policy of this Nation for almost 18 months now. And what have they done in 18 months?

Number one, they passed a budget that has the largest single tax increase in American history, largest single tax increase in American history. After 3 years fully phased in, it's going to be a $3,000 average burden on the American family. That shrinking paycheck causes people not to be able to pay their mortgage bills.

We know what's happened to gasoline prices, almost $4 a gallon. Shrinking paycheck. Now supposedly they were going to bring the price of gas down when they were elected. The American people know differently, and it's not just gasoline that's $4 a gallon. Milk. I've got a 6-year-old and a 4-year-old back home in Dallas, Texas. They drink a lot of milk. Milk's expensive. The cereal they like, it's expensive, all happening under their watch. A shrinking paycheck.

How are people supposed to afford their mortgage when they're having to pay historic high gasoline prices, historic high food prices and pay an extra $3,000 in taxes? Madam Chairman, that's the real challenge that America's families are facing now.

And here's another problem with this particular piece of legislation that I find. It ignores the greater crisis in America, and that is the spending crisis, the one that is ignored on a daily basis here. Already we notice that when the new Member from Louisiana was sworn in today, we all saw that he had his baby in his arms, and, I don't know, it might have been a 1-year-old or 2-year-old child, but that child already has inherited a debt of almost $200,000 because Congress after Congress keeps on spending money and sends the burden to future generations.

So, you know, what is it? It's $7.5 billion for grants here and $7.5 billion for loans there. Well, Madam Chairman, sooner or later we're talking about real money.

We're on the verge of being the first generation in America's history to leave the next generation with a lower standard of living. And it's not just me that's saying it, it's the Congressional Budget Office, the Office of Management and Budget, the General Accountability Office. And yet again, the Democrat majority ignores that true crisis.

I also find it quite interesting that while the Federal Government continues to be awash in the sea of red ink in passing on unfunded obligations to future generations, that almost every State and municipality in the Nation is running a surplus.

So we're taking money away from a treasury that has none to supplement treasuries that do have some. We have a great challenge in our Nation.

And clearly predatory lending took place, I might add, so did predatory borrowing. And so we need to help people, but the way to help them when people are struggling to pay their mortgages is not to raise their taxes and force them to pay the mortgages of their neighbor, particularly a number of neighbors and Wall Street investors who speculated, who might have engaged in fraud.

But Madam Chairman, back to the States and localities. For example, the Commonwealth of Massachusetts spends $11 million a year on their Office of Tourism. If we're having a great housing crisis, maybe they could cut back a little on the tourism budget and help the people in need for housing.

Again, if this is such a great priority for the States and they're crying out for these loans and grants, why does the State of Massachusetts continue to spend $760,245 for pools and spray pools under the control of the Department of Conservation and Recreation?

Michigan, $9.4 million to enhance public boating access and dock facilities. I have no doubt, Madam Chairman, that this is important. But again, if we have a housing crisis, maybe the good people of Michigan could cut back a little on their boating access facilities.

State of Ohio. They apparently have a wonderful ``Discover Ohio'' tourism and marketing campaign, $8.2 million. Maybe they could use some of that money to assist the people in their State.

How about some of the municipalities? According to the Daily News, Los Angeles spends a half a million dollars, $550,000 to be exact, for calligraphers to decorate proclamations and honors. I'm sure that those proclamations are very handsome, but again, if we're having a housing crisis, maybe people in Los Angeles can cut back on the calligraphy to assist the people in need. And yet the Democrat majority--and the gentlelady from California who perhaps

is familiar with the calligraphy--has decided instead to take the money away from the Federal Treasury, help raise taxes on hardworking American families while they're trying to fill up their cars to take their children to school, to try to go to work, so that ultimately we're subsidizing Ohio tourism, L.A. calligraphy, water boating access in Michigan, and the list goes on and on. Surely we can find something that is more fiscally responsible and more creative than yet another grant and loan program to States and localities that ultimately bail out investors and Wall Street.

This is bad legislation. It should be defeated.

A former President once unfairly characterized a leader of this House as someone who couldn't walk and chew gum at the same time. The gentlewoman from West Virginia extends, frankly, that insult to the whole House. She suggests we can't do two bills in one night. She says we should work to try to help avoid foreclosure. I agree. That's the next bill which we will get to after all of this useless temper tantrum is over, we will get to it at 3 o'clock in the morning, but we will get to it.

That bill will help avoid foreclosure. I know the gentlewoman agrees. She voted for that bill in committee although a majority of her colleagues were against it.

But I do not understand how anybody could argue that doing this bill now interferes with that bill later. They are totally not in conflict.

So the notion that this bill doesn't keep people out of foreclosure is true. It doesn't combat global warming. It doesn't get troops out of Iraq. It won't help me lose weight. There are a lot of things this bill won't do that I very much want to do. None of them are a reason to vote against a bill that doesn't do what it doesn't say it's going to do but does what it does.

What it does is to go to the aid of cities that have been victimized by the deregulation run rampant, perpetrated by this administration, which has led to the subprime crisis. We have vacant property everywhere in these areas.

Now the argument that this is going to award speculators and be an incentive to do foreclosures is also flatly wrong. This is $15 billion. People will tell you it's a lot of money, and it is. Do you know how much money this is? This is half of the money that this administration made available to buy up the debts of Bear Stearns. Now, I think they had to do that. I think they were forced to do it. But I think we have to do this as well.

I do think that the whole country, under this administration's calculation, ought to get at least half of what Bear Stearns got. That's all that this does.

Now, unfortunately, it's not nearly enough to buy up the property that's foreclosed. So anyone who says, I'm going to foreclose today because I want to get in on this, would be nuts because there is already property ahead of them. And even when this bill becomes law, if it does, there's a 60-day wait, and I hope it will be part of the stimulus.

Property that was once paying taxes because of this subprime crisis now eats taxes. It bites neighborhoods. And, yes, some of the people who foreclose may benefit here. But we are telling the cities and the States to be careful with this money. They have to buy it for affordable housing. That will put limits on what they will pay.

And you can say, well, why don't the cities do it on their own? Because the very cities that need help here have lost revenue because of this foreclosure. These properties are fire traps; they attract people who break the law; they attract sanitary nuisances. They lead to water hazards.

I always feel good when people make arguments against legislation that won't really deal with the legislation. The notion that the problem with this bill is that it doesn't help avoid foreclosure, when it was not the bill intended to avoid foreclosure, shows well, there's a dearth of arguments against it.

The argument that it's going to reward the speculators, this will go to

cities dealing with property that is causing them problems. Do we not trust the cities and States of this country to take this money and use it judiciously and wisely to prevent neighborhood decay?

I don't understand the animus that motivates so many of my Republican colleagues that say, Oh, no, let's not have government intervention here. Well, we heard that a while ago, and people on the other side successfully blocked government intervention in regulating subprime mortgage origination outside of the banks. It was this religion of never intervening that brought us here. A limited intervention to undo the negative consequences is what this bill calls for.

Of all of the unfair accusations, the one that blames the Community Reinvestment Act for this is the strongest.

The Community Reinvestment Act was passed in 1977. This subprime crisis, of course, did not appear until nearly 30 years later; but more important, the subprime loans that caused problems were overwhelmingly made by institutions not covered by the Community Reinvestment Act. It covers depository institutions: banks and thrifts and credit unions. Credit unions aren't covered. Banks and thrifts.

If only those institutions, deposit-taking, regulated institutions covered by CRA had made these loans, we wouldn't have had the crisis. The loans were made by institutions not covered by CRA 30 years, 28 years after CRA was passed.

I yield to the gentleman from Florida.

The gentleman is wrong to say that we evaluated everybody under CRA. We have evaluated banks and thrifts under CRA. Mortgage brokers, mortgage bankers were not evaluated----

No. Not until I finish this factual statement.

I will yield to the gentleman.

I will take back my time.

First of all, I thought I heard the gentleman talk about the Community Reinvestment Act. It's been late. I keep hearing, ``I move to adjourn.'' Maybe my ears got a little curdled.

I thought the gentleman said, and we'll check the record later. If he didn't mention the Community Reinvestment Act, I will apologize.

But no. I for one have been saying that we should not be pushing people into homeownership when they can't handle it, and part of the problem here was killing affordable rental housing.

But let's have the record clear. There is no rational way to blame the Community Reinvestment Act passed in 1977 and not cover the nondepository institutions for this crisis caused by the nondepository institutions.

Mr. Chairman, I rise today in strong support of H.R. 3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007, introduced by my distinguished colleague from North Carolina, Representative Brad Miller. This important legislation will address and reform the mortgage lending processes ``to avert a recurrence of the current situation with rising defaults and foreclosures, especially in the sub-prime market.''

Mr. Chairman, it is essential that this Congress protects the needs of American families and nothing is more imperative than ensuring that all people have a home. Recent studies have reported that 92 percent of the American population has at some point feared being homeless and this legislation is an important step in alleviating those fears. The current lending crisis must be addressed.

The Federal Government must play an important role in revitalizing and restoring opportunities for Americans to reach the American dream of owning a home. One of the major contributors of the affordable housing shortage is the sub-prime lending crisis that has caused serious negative economic and social consequences that resulted from too little regulation. Because of the lack of regulation by the Federal Government, many loans were accompanied by fraud, inadequate information and other failures of responsible marketing. Foreclosure rates are at 14 percent and are rising at an alarming rate and homeowners across America are losing their homes. Throughout the country, homeowners are surprised to find out that their monthly payments are spiking and they are struggling to make these increasingly high payments.

The sub-prime mortgage crisis has impacted families and communities across the country. Home foreclosure filings rose to 1.2 million in 2006--a 42 percent jump--due to rising mortgage bills and a slowing housing market. In Iowa, 3,445 families experienced foreclosure last year, up 64 percent from 2005.

Nationally, as many as 2.4 million sub-prime borrowers have either lost their homes or could lose them in the next few years.

The Democratic-led House Financial Services Committee has been intently focused on this and other issues and is working toward a balanced solution that helps stabilize the mortgage market, stops abuses, preserves access to credit, and aids stable homeownership.

Creating more affordable housing opportunities will increase more job opportunities for the people of Houston and Harris County. We hope that an increase in affordable housing and job opportunities will also reduce the high rates of homelessness among Houston residents. As you may know:

Houston's homeless population increased to approximately 14,000 in 2005 before Hurricanes Katrina and Rita.

Hurricane evacuees remaining in the Houston area could result in the homeless population increasing by some 23,000 to 30,000.

Houston's homeless population includes an estimated 28 percent of American Veterans.

Some 59 percent became homeless because of job loss.

A full 10 percent of the city's homeless are believed to be able to return to self-sufficiency with 12-18 months of assistance and affordable housing.

Shelter and housing for Houston's homeless currently is reported at around 4,235 beds and or units, leaving 10,000 on the streets.

I have cosponsored a number of bills to address the housing crisis in this country. In the 109th Congress I cosponsored H.R. 1182, the Prohibit Predatory Lending Act, and H.R. 1994, the Predatory Mortgage Lending Reduction Act. I will continue to support legislation to address the housing crisis facing the people of this country.

This important piece of legislation will ``create a licensing system for residential mortgage loan originators, establish a minimum standard requiring that borrowers have a reasonable ability to repay a loan, and will attach a limited liability to secondary market securitizers.'' This is extremely significant in the sense that it will ensure that Americans who dream of home ownership will not engage in loans that they will be unable to repay. It will enhance and expand consumer protections against ``high-cost loans.'' It will protect renters of foreclosed homes and establish through the Department of Housing and Urban Development an Office of Housing Counseling that will ensure that consumers will be fully aware of all possible avenues.

While this legislation is a step in the right direction, we must ensure that this legislation does not hurt those who it is intended to protect. We must ensure that families with a less-than-perfect credit history are not denied outright their dream of home-ownership and that lenders do not abuse their discretionary powers. This legislation creates a standard licensing system for residential mortgage loan originators that will ensure a consistent rubric for loans and protect American families from would-be predatory lenders. It further expands consumer protections from high-cost loans by: prohibiting the financing of points and fees; prohibiting excessive fees for payoff information, modifications, or late payments; prohibiting practices that increase the risk of foreclosure, such as balloon payments, encouraging a borrower to default, and call provisions, and requiring pre-loan counseling. This is an unprecedented step forward for hard working Americans with the dream of home-ownership and I applaud this legislation for this significant first step towards helping Americans realize their dreams.

Finally, let me acknowledge the concerns of strong advacates for the housing needs of the vulnerable--ACORN and the NAACP, among others, and I look to working on changes in this legislation as the bill moves to address their concerns.

I thank Chairman Frank and my colleagues, Congressmen Watt and Miller, from the great State of North Carolina, who passed legislation in the

State legislature first and helped build a strong bipartisan bill in our committee that passed with a strong vote of 45-19. The economic crisis we are facing is no longer just a subprime crisis, but a credit crisis. Subprime losses are mounting and the economic pain is being felt in communities across this country, as the ripple of foreclosures spreads to neighborhoods and local economies. Economists estimate that between 2 million and 5 million families could lose their homes by the end of 2008, more than the number of families that lost their homes during the Great Depression.

Democrats are working hard to help families stay in their homes and prevent another crisis like this from happening in the future. I submit for the Record a list of legislative actions and other actions that Democrats in Congress have passed to help families stay in their homes. With this bill, we take the first step towards reforms for the future. The bill would bring mortgage brokers who are currently regulated on a state-by-state basis under a nationwide licensing registry, establish minimum standards for home loans, and expand certain limits on high- cost mortgages.

It also would prohibit brokers from steering consumers to mortgages they are unlikely to be able to repay. It changes the incentives for all market participants.

The bill would also establish some legal liability for securitizers, but it also provides some liability protection to those companies if they meet certain due diligence requirements in reviewing the loans they are packaging. Any legislation on this issue must strike a very delicate balance that provides consumer protections without unnecessarily limiting the availability of loans to creditworthy borrowers.

I congratulate the chairman for coming forward with a well-balanced bill on a very difficult subject that is incredibly important. I urge my colleagues, we must pass this bill.

Tackling the problem of subprime mortgage reform is like slaying the many-headed Hydra of Greek mythology--unless you go about it the right way, for each head you chop off, two more vicious ones will grow in its place.

I congratulate Chairman Frank for producing an ambitious and comprehensive bill that deals with many key aspects of this difficult issue.

It is a comprehensive and sweeping reform of the mortgage industry that would require all actors in the mortgage market to operate with the kind of accountability and regard for the consumer's best interest that the best mortgage lenders have always observed.

In this respect, the bill tracks the comments of Federal Reserve Chairman Ben Bernanke, who said in testimony before the JEC that limited and clearly defined assignee liability could prove beneficial.

To do this, the bill preempts State laws in the section dealing with securitizers, reflecting the concern that differing State laws would interfere with oversight of a national market. But it leaves States free to regulate in other areas where States have traditionally led the way in consumer protection for their citizens.

This is a well-balanced bill and I urge my colleagues to support it.

Democrats in Congress Are Working to Help Families Stay in Their Homes

We need to act quickly to stem the tide of foreclosures

that could ruin families, communities, and the economy.

The House has passed legislation to enable the FHA to serve

more subprime borrowers at affordable rates and terms,

attract borrowers who have turned to predatory loans in

recent years, and offer refinancing to homeowners struggling

to meet their mortgage payments.

Fannie Mae and Freddie Mac are providing much needed

liquidity in the prime market right now. We passed a GSE

reform bill in the House, but we should also raise the cap on

these entities portfolio limits, at least temporarily, and

direct all of those funds to help borrowers who are stuck in

risky adjustable rate mortgages refinance to safer mortgages.

To make servicers more able to engage in workouts with

strapped borrowers, we pushed FASB to clarify what its

Standard 140 allows for modification of a loan when default

is reasonably foreseeable, not just after default.

Congress should eliminate the cruel anomaly under Chapter

13 of the Bankruptcy Code which allows judges to modify

mortgages on a borrower's vacation home or investment

property, but not the home they actually live in. This allows

families to stay in their home while new loan terms are

worked out.

I think we should also eliminate the tax on debt

forgiveness, sparing families the double-whammy of paying

taxes on the lost value of their homes.

Democrats in Congress Are Working to Prevent Another Crisis

Our regulatory system is in serious need of renovation to

catch up to the financial innovation that has surpassed our

ability to protect consumers and hold institutions

accountable.

I thank the gentleman for yielding.

Mr. Chairman, I would like to thank Chairman Frank and Ranking Member Bachus for working with Members from both sides of the aisle to craft legislation to help consumers secure sound mortgages and shine a light on the mortgage practices from day one of the home-buying process. I would also like to associate myself with the remarks of our distinguished ranking member, Mr. Bachus, and add just a few points.

First, I would like to thank Chairman Frank for adding two of my bills to the underlying legislation, H.R. 3019, the Expand and Preserve Homeownership Through Counseling Act, which has become title IV of the bill; and H.R. 3017, the Stop Mortgage Fraud Act, which has become section 212 of the bill.

Why are these important? Well, first, for so many, the problems out there could have been avoided through one simple thing: housing counseling. If consumers understand what they are getting into before signing on the dotted line for a mortgage, they would be armed with the ability to make better decisions about a mortgage. Title IV elevates housing counseling within HUD, and the Office of Housing Counseling will expand HUD's capacity to offer grants to States and local agency.

The language also tasks HUD with conducting a study on defaults and foreclosures and launching a national housing outreach campaign so that consumers know where to find a legitimate HUD-certified counselor. They can get the help they need now to buy and keep their homes.

Second, section 212 of the bill authorizes additional funds for the FBI investigators and Justice Department prosecutors to crack down on mortgage fraud. It's no secret that organized crime gangs, many operating in Chicago, have discovered a more lucrative business than drugs. Mortgage fraud scam artists inflate appraisals, flip properties, and lie about information, such as income and identity on loan applications.

Finally, as a former real estate attorney, I know that any mortgage legislation reform should first aim to do no harm. By that, I mean five basic pieces. First, it should preserve access to credit and homeownership opportunities for qualified low- and middle-income borrows; second, facilitate transparency in the mortgage market; third, create a level playing field; fourth, promote strong underwriting standard; and, fifth, foster competition.

Achieving these objectives is critical for both primary and secondary mortgage market participants, from homeowners to investors. Has the bill under consideration fully realized these goals? I would say we have come a long way on mortgage reform, but our work is not finished. Today, several Members will offer amendments to improve the bill: the manager's amendment offered by Mr. Frank and Mr. Bachus, and additional amendments by Ms. Ginny Brown-Waite, Mr. Garrett, Mr. Hensarling, Mr. McHenry, Mr. Gary Miller, and Mr. Price. I urge my colleagues to support these amendments. I would like to particularly thank Mr. Kanjorski for working with me on H.R. 3537, which we will offer as an amendment today.

It's important for future American homeowners and our 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.

Mr. Chairman, I claim the time in opposition, although I am not opposed.

Mr. Chairman, I would like to echo the remarks of Mr. Kanjorski and thank him and my colleagues, Mr. Hodes, Mrs. Capito and Ms. Moore, for working on this amendment, which is based on H.R. 3837, the Escrow, Appraisal and Mortgage Servicing Improvements Act.

Overall, this amendment addresses deceptive, abusive and fraudulent mortgage lending practices related to titles on escrow accounts, mortgage servicing and appraisals. We worked hard following our markup last week to clean up language in this amendment regarding the prompt crediting of payments and Truth in Lending Act and the Real Estate Settlement Procedures Act, commonly known as RESPA, liability, in addition to making several more technical changes.

We have more to do, especially further developing the language in the payments and escrow sections in this bill; but I'm confident that, based on the bipartisan progress that we've made this far, we can work out our differences as the bill continues to move through the legislative process.

Again, I thank Mr. Kanjorski and my colleagues from both sides of the aisle for their hard work and cooperation on this amendment. It has broad bipartisan support, and I urge my colleagues to vote for it.

I reserve the balance of my time.

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

Mr. Chairman, I yield the remainder of my time to the gentleman from Alabama, the ranking member, Mr. Bachus.

Mr. Speaker, I want to address both the procedural and substantive objections.

First, procedurally, I understand there are some legitimate concerns about the second rule that we will deal with. But as to this rule, I will say categorically I was the ranking member on the Committee on Financial Services for 4 years. The rule today gives more scope to the minority's amendments than any rule under this committee's jurisdiction when they were in the majority.

The gentleman complained about an amendment offered by the gentlewoman from Florida (Ms. Ginny Brown-Waite). There is an amendment on the subject of illegal immigrants and their benefits in this bill. There were four such amendments. One was made in order. Putting in order duplicative amendments serves no purpose.

But when the Republicans were in power, we had situations where motions adopted in committee were changed by the Rules Committee, and we were not given an opportunity to vote an amendment and discuss that on the floor. That was on the GSE bill. There was never a time when, under the Republican rule, we had as much ability to offer ours.

There are three substantive amendments offered here. Five were already adopted in committee.

Now as to the substance. The notion that this helps lenders is bizarre. This is one that is strongly urged for mayors, Governors, police chiefs and municipal officials. Property already foreclosed used to pay taxes. It now absorbs taxes. There are fire hazards, there are nuisances, there are threats in terms of sanitation.

The problem is that many of the cities that have this problem of foreclosed property don't have the financial wherewithal to buy up the property precisely because they have lost tax revenues. They are in a vicious cycle. We are offering this money, and it is a need-based formula. The money goes to where there is the most foreclosed property.

Now it is true that it is $15 billion for the entire United States. We are in a terrible crisis, and this bill would provide $15 billion to elected local and State officials to buy up property. That's an awful lot of money. It is half what this administration offered to the counterparties of Bear Stearns.

Now I thought that the $30 billion offer to the counterparties of Bear Stearns was an unfortunately necessary request. But how, Mr. Speaker, do people in an administration that gave $30 billion of taxpayers' money, put that at risk for the counterparties of Bear Stearns, object when half of that is made available to all of America to abate fire high hazards and to preserve neighborhoods from serious problems?

The lenders don't benefit from this. In fact, we have a later bill in which we are going to be accused of not doing enough to put you into foreclosures. This bill says that when the property has already been foreclosed for at least 60 days, the cities and States may work with profit or nonprofit groups to make it available for affordable housing, to make it available for local employees. I guess when you don't have a serious argument, you just make things up. This one is totally unconnected to reality. We have been asked by local officials and worked with them. There is a great deal of property that has been foreclosed upon.

By the way, to anyone who says this is an incentive to foreclose property, there isn't enough money in this bill to begin to buy up all that's already been foreclosed. No one who hasn't yet done it is going to get any benefit from this, but let's get back to the basics.

Thirty billion dollars of public money has been made available for the counterparties of Bear Stearns, I think, of necessity, to avoid greater danger. But how, having done that, do you denounce half that amount of money for the whole country to cities and States to buy up foreclosed property that is blighting neighborhoods?

Then the gentleman from Washington said, well, why should the rural areas be forced to deal with this when it's a city problem because there is foreclosed property in many places? But that kind of rhetoric that sets one against the other, I don't think is very productive.

I guess I would say this: Why should the people of Detroit and Cleveland pay subsidies to farmers who make hundreds of thousands of dollars a year? We are going to pass an agricultural bill that's going to ask people in the cities to pay for agricultural subsidies. I don't think it is very sensible to start this kind of thing. We are going to bring forward housing dealing with rural housing.

America is in a terrible financial situation brought about by irresponsible economic activity unchecked by reasonable regulation. This is one small piece of dealing with it, and it is far less expensive than other pieces these people have supported.

Madam Chairman, today I want to thank, first of all, the chairwoman of the Subcommittee on Housing, of which I'm the ranking member, for her good hard work and dedicated service. We've had a lot of hearings and a lot of information, and I think we all want to try to achieve help for the homeowners or those who are on the edge.

But today I rise in opposition to H.R. 5818, the Neighborhood Stabilization Act of 2008. We all recognize that we are experiencing a sharp increase in foreclosure statistics and starts. Over the past year alone, approximately 550,000 homeowners with subprime loans began the foreclosure process.

However, we shouldn't rush to act. We must guard against adopting policies which create moral hazards and unintended consequences.

Unfortunately, we believe H.R. 5818, the Neighborhood Stabilization Act of 2008, is a bill which does both. H.R. 5818 is an unnecessary government intervention in the housing market which will bail out real estate speculators, servicers, and lenders while doing nothing to assist hardworking Americans struggling to make their mortgage payments. This bill will not keep one person in their mortgage or in their home.

The bill does this through a $15 billion authorization for grants and loans to be used to purchase already foreclosed homes from lenders, servicers, and speculators who have made bad loans or unwise investments. The Neighborhood Stablization Act will allow investors and servicers to unload their foreclosed properties to the government with the taxpayer footing the bill. Servicers and investors might even be encouraged to pursue foreclosure if this bill is enacted.

Instead of incentivizing foreclosure, Congress should be encouraging services to engage in voluntary loan work-outs and modifications. Furthermore, this bill calls on States and local governments to convert foreclosed properties into affordable rental and single-family housing. The increase in housing supply and decrease in prices creates housing affordability without government intervention.

I'm also concerned that the overly broad income targeting provisions in this bill, which will allow families making 100 percent and 140 percent of area median income respectively, to rent and purchase properties acquired with funds from this act. It is not appropriate for the government to provide housing assistance to individuals who can afford market-rate housing.

Congress should focus its efforts on keeping hardworking Americans in their homes. We should not unnecessarily intervene in the housing market in the process of adjustment after years of what has proved to be unsustainable growth. It is imperative that we recognize the primary beneficiaries of this bill will not be the thousands of Americans struggling to hold on to their home, but the lenders, servicers and speculators who bear much of the responsibility for the current housing slump.

Putting aside the issue of how massive this new program would be, the bill's ultimate beneficiaries, as I said, could be our lenders and investors and speculators; and indeed the FHA commissioner, Brian Montgomery, stated in testimony before our committee that ``this legislation may have the unintended consequences of making foreclosure a more attractive option for lenders thereby compounding the very problem of rising foreclosures that the bill purports to address.''

Madam Chairman, I oppose this bill, and I would like to reserve the balance of my time.

I would like to make a comment in reference to the chairman's comments.

I live in a small community, just barely over 50,000. And we have local government and State programs in effect right now that deal with foreclosed or blighted projects. They work together with the local nonprofits, with the local land owners and realtors, and we have problems that are moving forward.

So to say that we're not in favor of programs that would deal with foreclosure-blighted neighborhoods I think is factually incorrect.

I would like now to yield some time to the gentleman from Florida (Mr. Feeney), a member of the Financial Services Committee, 3 minutes.

Madam Chairman, I yield 3 minutes to a member of the Financial Services Committee, Mr. Roskam from Illinois.

Madam Chairman, I yield to the gentleman from Illinois (Mr. Roskam) 2 minutes.

Madam Chairman, I yield 4 minutes to the gentleman from Texas (Mr. Hensarling), a member of the Financial Services Committee.

I yield the gentleman 1 additional minute.

I yield the gentleman another 2 minutes.

Madam Chairman, I yield 4 minutes to the gentleman from Georgia (Mr. Price), who is also a member of the Financial Services Committee.

Madam Chairman, may I inquire as to how much time is remaining on each side.