Providing for consideration of the bill (H.R. 5072) to improve the financial safety and soundness of the FHA mortgage insurance program, and providing for consideration of motions to suspend the rules.

First, I want to acknowledge the praise given to the gentlewoman from West Virginia (Mrs. Capito), and, I would add, I was thanked, but the gentlewoman from California (Ms. Waters) worked closely with Mrs. Capito to bring this bill forward.

Secondly, on the deficit, this Friday morning I will be at a meeting. The gentleman from Texas (Mr. Paul) and I are beginning an enterprise to pull back the excessive overreach of America militarily. We are spending more money now defending Western Europe from an enemy unknown to anybody--including those in Western Europe--than we're spending on virtually any domestic program. So, yes, I welcome that, and I'll look to see where we are on that.

I support President Obama's efforts to save money in the space program. Frankly, when people tell me that we have got a serious debt crisis but they're willing to commit hundreds of billions of dollars to send a human being to Mars so he or she can be brought back--and the President is not, I think, correct on this--then I am also skeptical.

Some of my friends in the Agricultural Committee and in the South who support sending $147 million of American tax dollars to the Brazilian cotton farmers to offset the subsidy given to American cotton farmers, I doubt their true depth of their commitment to cutting the budget.

But let me talk about revisionist history.

The Republican Party controlled the Congress from 1995 to 2006. No legislation changing Fannie Mae and Freddie Mac went through. President Bush controlled the executive branch for 2000 to 2008. What he did--he said he wanted some reform. You've heard the former chairman, the former Republican chairman Mr. Oxley, denigrate Mr. Bush's cooperation there. But in 2004, the Bush administration ordered Fannie Mae and Freddie Mac to increase the number of mortgages they bought for people below the median income. And at the time I said I thought that was a mistake; wrong for the people who were being pushed into this, wrong for Fannie Mae and Freddie Mac, and, in fact, it led me to change my opinion.

As Secretary Donovan testified, unchallenged by any of the Republicans, Fannie Mae and Freddie Mac are not now costing the taxpayers any money. The money that is owed is from the prior activity before Secretary Paulson put them into conservatorship with authority that he did not get from a Republican Congress but from a Democratic Congress, and Secretary Paulson said it wasn't a perfect bill but it was a bill that he could work with.

Since then, Fannie Mae and Freddie Mac have been in conservatorship. They have already been drastically changed, and they are not costing the taxpayer moneys. Clearly, we have to take a next step, but we have consulted with the Realtors, with the home builders, with advocates for low-income housing, with virtually everyone concerned with housing, and their recommendation is, yes, keep them in conservatorship and replace them.

The Republican plan that you have heard, the plan of the minority of Republicans from 2005, abolishes them with no replacement, and so housing finance is left in a turmoil. We have Ginnie Mae, we have the FHA, we have the Federal home loan banks, we have Fannie Mae and Freddie Mac. Yes, we believe there should be a sorting out of these things, but let's again just summarize.

I have been told that it was my fault that during the Republican years in Congress we didn't pass a bill on Fannie Mae and Freddie Mac. Well, Mr. DeLay of recent memory was in charge of the House agenda then, and I have to disclaim the notion that I was secretly advising Mr. DeLay, and I'll prove that to you, Madam Speaker. If I were giving Mr. DeLay advice, I would have told him not to go on the dance show. It wouldn't have just been Fannie Mae and Freddie Mac that would have benefited; a lot would have benefited.

But we were frustrated by him. He was in charge of the housing agenda. A few Republicans wanted to change it. They were outvoted by the Republican majority. When the Democrats took office--and you can read this in Secretary Paulson's book--we cooperated with the Paulson administration. We gave them the authority to put it into conservatorship. They are now both in conservatorship, and we await the next step.

First, to underline it, under authority that the Bush administration asked for and didn't get until the Democrats took over Congress, Fannie and Freddie were put into conservatorship. That's a very drastic reform of where they were.

The $145 billion that, regrettably, is being lost was lost before the conservatorship. We put an end to those losses. And that's the current testimony of Secretary Donovan.

And then as to compensation, I welcome my friend from West Virginia, belatedly, to the cause of limiting the compensation. Because the Committee on Financial Services put a bill out to specifically limit the compensation of the GSEs. We had general compensation limitations for TARP recipients, but we had one that would have limited GSE recipients, as well. And the gentlewoman from West Virginia voted against it, as did most of the Republicans.

So we had a general compensation restriction, and we had one for--I take it back. It was any recipients of government aid, including the GSEs and the TARP recipients. And the Republican Party voted ``no.'' So they are now opposed to raises which they refused to vote to block. That's the pattern.

And I stress again, Fannie and Freddie have already been drastically reformed. They are in conservatorship. That is a very significant form of limitation. They are not being run remotely the way they were in the past when the Bush administration and others pushed them into buying too many loans from low-income people. And we do believe they need to be replaced, but in a way that does not further destabilize housing finance.

That's why the realtors and the home builders and a number of groups concerned about the deficit oppose this Republican plan simply to abolish them without replacing housing finance mechanisms. But they are currently being run in conservatorship.

And, again, I repeat, as Secretary Donovan said, unchallenged by the Republicans when he was testifying, they are not now losing the money. The losses predated the conservatorship, and the responsible thing to do was to replace them responsibly.

But the fact is that it's not losing money--whether it's persuasive or not, the fact is uncontested that it's not losing money. The CBO talks about past debt.

I just want to talk about the past that the gentleman from Illinois is so desperate to cover up.

The House voted on a bill that would have limited compensation to Fannie Mae and Freddie Mac executives a year ago. It was not on other corporations; it was on TARP recipients, Fannie Mae and Freddie Mac.

It came out of committee, it came to the floor of the House, and the gentleman voted against it. If he had helped us a year ago--it passed the House but it died in the Senate--if we had been able to get that bill through, we would have limited these.

So the gentleman over a year ago--and I know that's history and he doesn't like to talk about history, particularly when it doesn't reflect well on his argument--but he voted against that limitation.

The reason we talk about the history is very simple: Every dollar that is lost and is about to be lost was lost because there was a delay in reform.

The losses are not resulting from current operations. Secretary Donovan said that before the committee, and no Republican challenged him. We are stuck with losses that happened before we were able to put it into conservatorship by our votes and stop the bleeding.

I thank my friend for yielding.

I appreciate the revised view of history itself. For some time, my Republican colleagues have been trying to blame those of us who try to expand housing, decent housing for lower-income people, for the crisis, including Fannie Mae and Freddie Mac.

I think the record is very clear. Twelve years of Republican rule, no bill became law to change Fannie and Freddie Mac's operation. George Bush in 2004--not ancient history--expands, by his mandate, the number of low-income loans that they have to purchase, loans from low-income people.

That is why we have the debt. That is why this is relevant. The Democrats take power in 2007 and, working with Secretary Paulson, as he documents in his book--and he notes, by the way, that some Republicans were mad at him for working with us. But the result was a good bill that allowed him to put Fannie and Freddie into conservatorship. And, post-conservatorship, we have not had the problems.

If you abolish Fannie and Freddie tomorrow, you wouldn't save a penny because we would still have the debts that accrued when it was run previously, an unreformed Fannie and Freddie--unreformed because the Republicans wouldn't touch it, unreformed probably because President Bush pushed them into more loans. To talk about what you do in the future you have to understand the source of the problem; that's what we get in history.

So Fannie and Freddie have been drastically changed and they are in conservatorship. The question is, what do you do next? They have played an important role in housing finance. They are playing a constructive role now as opposed to the destructive role they played before. And I was slow in recognizing that; it wasn't until 2004 that I did. But in 2005, I joined many Republicans in trying to support a bill until it was hijacked from any housing purposes. By the way, the fact that I voted against the bill finally had no impact. The bill passed the House. It died in the Senate because Senate Republicans didn't like it. Senate Democrats offered the House Republican bill; that caused the end of the war.

But let's talk about going forward. Fannie Mae and Freddie Mac are now run by a conservator. Unfortunately, their salaries aren't capped because the Republicans helped sabotage a bill which we supported to cap their salaries. But it is now being run in a way that helps promote financial--and does not have the mistakes of the past. There are not these problems. The money owed is money that results from past decisions that are no longer being taken because of the conservatorship.

The question is, what do you do going forward? The National Association of Realtors, the National Association of Home Builders, everybody involved in housing finance argues--very correctly, I think-- that simply having Fannie and Freddie disappear--again, not the old Fannie and Freddie, they have disappeared, the agencies that caused us the problems no longer exist. My colleague from Illinois, with a fresh figure of speech, said they were 800-pound gorillas. Well, if they are gorillas, they are deeply chained, they are in cages, and they are being fed and are quite docile. Yes, they need to be replaced, but you need to take all of the various aspects of housing finance and figure out how to do it going forward. The Republican bill doesn't do that; that's too hard.

Railing against the mistakes of the past--and they say they don't like history? But their bill is a firm statement against the operation of Fannie Mae and Freddie Mac before it was put into conservatorship and deals, unfortunately, with debts that we are stuck with. Going forward, how do you untangle the private shareholder corporation and a public mandate to try and subsidize housing to some extent? What agency should you have? What's the role of the Federal Housing Administration and Ginnie Mae and the private sector and the secondary market entities? We need to think about that. They haven't done that. Their bill includes nothing to replace Fannie Mae and Freddie Mac. So passing their bill tomorrow--or last week--wouldn't save us anything because their current operations aren't losing money, and it wouldn't discharge us from the debts that occurred when it was being run on their watch under their rules.

We do stop the bleeding by putting them into a tough conservatorship. You can read Hank Paulson's book, and he tells you how they were going to resist that. He insisted and fired the board of directors and shareholders were substantially diminished or wiped out. And new rules, new loans are going forward that aren't the kind of bad loans that were made, and now our job is, responsibly, to try and replace it. And what you get from the Republicans is confession. They are very angry at the fact that when they were running the place in the White House and here, Fannie Mae and Freddie Mac were able to run up all those debts and they never were able to do anything to stop it. I didn't see that early on. I saw it--and in fact acted on it--quicker than many of them. We have now stopped the bad stuff and we are not incurring losses, and the question is, what do you do going forward? And that is a harder question than my Republican colleagues are prepared to grapple with.

I thank the gentleman from Colorado.

Madam Speaker, by direction of the Committee on Rules, I call up House Resolution 1424 and ask for its immediate consideration.

For purposes 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.

General Leave

I ask unanimous consent that all Members be given 5 legislative days in which to revise and extend their remarks on House Resolution 1424.

I yield myself such time as I may consume.

The rule provides for consideration of House bill 5072, the FHA Reform Act of 2010. It is a structured rule which makes in order 13 amendments. The rule waives all points of order against the bill except those arising under clause 9 and 10 of rule XXI. It further considers the amendment in the nature of a substitute from the Financial Services Committee be considered as read. Finally, the rule provides authority to the Speaker to entertain motions to suspend the rules on Thursday and Friday of this week.

Madam Speaker, H.R. 5072, the Federal Housing Administration Reform Act of 2010, provides FHA with the necessary tools to strengthen its mortgage insurance program and overall financial position. The collapse of the private sector in the wake of the financial crisis left a large void in the housing market. Banks didn't have the capital to lend, so potential home buyers were left out in the cold. FHA played a critical role in filling this void, providing a much-needed catalyst to the real estate industry, which was left reeling from the subprime debacle. This preserved hundreds of thousands of jobs in the real estate industry.

As a result of taking on a more prominent role, FHA's market share increased from about 4 percent to now more than 30 percent of total purchases, 88 percent of which are first-time home buyers.

This bill makes several necessary reforms which will make it more efficient and accountable. First, it provides FHA with the authority to raise the annual mortgage premium for new borrowers. It also provides FHA with enhanced authority when FHA finds evidence of fraud or noncompliance by a mortgagee. If a lender or underwriter is found to be violating FHA regulations when underwriting loans by making risky loans or cutting corners, the FHA can terminate that underwriter or lender's ability to lend under the program. The bill also improves FHA's risk management, and under the bill, the FHA will provide additional data which will give a clearer overview of FHA's fiscal position.

The bill we are considering here today is bipartisan and incorporates many changes sought by the Housing and Urban Development Department, industry stakeholders, and Members of Congress. It passed the Financial Services Committee by a voice vote with little opposition. Most important, the Congressional Budget Office analyzed the bill and estimates it will save $2.5 billion over the next 5 years.

FHA plays a critical role in the marketplace, and this bill strengthens the program so that it can continue its role in a sound manner. FHA was created during the Great Depression to stimulate the economy, particularly with regard to real estate. This purpose is equally important today, so it is crucial that we make reforms to the program that will allow it to keep up with the industry. This bill will promote responsible lending and reduce the deficit by $2.5 billion. I look forward to the debate on this bill, which will restore greater confidence in the housing industry.

I reserve the balance of my time.

Madam Speaker, I appreciate the gentleman's support of the underlying bill and the savings of $2.5 billion and that they'd like to proceed and make some cuts to Fannie Mae and Freddie Mac over the course of the next year, and that is something that ultimately we have to address.

Under Mr. Frank and under this Democratic Congress, we've already worked on reforms to Fannie Mae and Freddie Mac, unlike my friends on the Republican side of the aisle. And I just remind them what their chairman of the House Financial Services said about the efforts to reform and revamp Fannie Mae and Freddie Mac back when the Republicans were in charge of both the White House and this Congress.

There was an effort to reform Fannie Mae and Freddie Mac between Mr. Oxley and Mr. Frank, but instead of getting any assistance, he fumed particularly about the White House. This was from an article in the Financial Times. It was by Mr. Oxley. This is an article written and quoted from Mr. Oxley in the Financial Times last September, September 9, 2008, where he fumes against criticism that the House didn't try to reform Fannie Mae and Freddie Mac back a few years ago. He says, ``All the hand-wringing and bed-wetting is going on without remembering how the House stepped up on this,'' to try to reform Fannie Mae and Freddie Mac. He said, ``What did we get from the White House?'' A White House that was controlled by the Republicans. ``We got a one-finger salute'' in trying to reform Fannie Mae and Freddie Mac.

Well, unlike under Republican leadership, we've been working on reforming Fannie Mae and Freddie Mac, and we have been looking for ways to cut costs and expenses of the United States. And one of those places we're already doing something about, which makes their suggestion looks like peanuts, and that's in Iraq.

The Republicans, under the leadership of George Bush and the Republican Congress, cut the taxes for the wealthiest 1 percent, prosecuted two wars without paying for them, left Wall Street in disarray by failing to police Wall Street. And what did we get? We got a financial meltdown and a giant debt, $1.3 trillion, when Barack Obama took office. And now they're complaining about the costs that they left in place based on their way of running the country.

With that, I reserve the balance of my time.

Madam Speaker, I now yield 5 minutes to my friend from Massachusetts (Mr. Frank).

I yield the gentleman an additional 2 minutes.

Madam Speaker, I would just remind the body that we're here on the FHA bill, the reformation of FHA which my friends have applauded, and that's really what we're here to talk about, a savings of $2.5 billion, more accountability from FHA, which has had to fill a vacuum in the housing market because of the loss of so many lenders who got so involved with sub-prime loans.

So I'd also say to my friend Mr. Garrett, Madam Speaker, that I think that sometimes if you take a look at the past actions that we saw under the Republican Party and their failure to rein in Fannie Mae and Freddie Mac, rein in a Wall Street that was out of control, cut taxes and not pay for wars, that gives you an idea of what they may be doing in the future. And that's what the people of this country want to have an idea of what to expect, and looking back at the past actions, I would say, gives you a good indication.

With that, I yield 2 minutes to my friend from Texas, Ms. Jackson Lee.

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

I would ask the Speaker how much time I have left and how much time Mr. Sessions has left, and I would ask my friend how many speakers he has left.

I would remind my friend from West Virginia--and I do appreciate that $30 billion over 10 years--take a look at their proposition. It is for another bill for another day. We are dealing with FHA, which saves $2.5 billion today.

Also, I would remind her, Madam Speaker, that, over the course of this year and last year, we started drawing down in Iraq, which was costing this country upwards of $100 billion a year, not $30 billion over 10 years, $100 billion a year, not paid for by the Bush administration. So, as we draw down from 160,000 troops to some 50,000 or 40,000 troops this summer, we are going to save far more money than the Republicans and this Fannie Mae proposal project.

I yield 2 minutes to my friend from Massachusetts (Mr. Frank) to respond to some of the things my friend from West Virginia said.

I continue to reserve the balance of my time.

Mr. Speaker, sometimes you have to remind people from time to time about what happened in the past, because it's important. History is important.

I would remind my friend from Illinois, you know, that there was an effort to reform Fannie Mae and Freddie Mac when it was purchasing a lot of lousy loans that have resulted in these losses. But, instead, what did the reformation, the reforming of Fannie Mae and Freddie Mac get back when you could have stopped these losses? We got the one- finger salute from the White House, a Republican White House that, for some reason or other, did not want to reform Fannie Mae and Freddie Mac.

And I have to tell you, Mr. Oxley, by giving that statement, we got a one-finger salute. When he made his statement on September 9, 2008, he described perfectly what the White House wanted to do with Fannie Mae and Freddie Mac. The White House, at that point, under the Bush administration, just, ``Let's buy all these lousy loans. Let's just keep it going.''

Well, that bubble burst. And the American people and the Democratic Congress and the Democratic administration are having to pick up the pieces now from that imprudent, improper approach to housing finance.

We want people to have homes that they can afford in this country. If they

can't afford them, then, okay, they don't get them. The FHA bill that is before the House today provides, in a proper and prudent way, insurance for those home purchases to people who can afford and can show their ability to make these payments.

That is the purpose of the bill today. My friends on the other side want to talk about some other thing that they didn't do 3 or 4 years ago.

Mr. Speaker, I yield 30 seconds to my friend from Massachusetts (Mr. Frank).

I yield the gentleman 15 additional seconds.

I would ask the Speaker how much time remains.

I yield 5 minutes to the gentleman from Massachusetts (Mr. Frank).

Mr. Speaker, I appreciated the initial comments by Mr. Sessions and a number of the other Republicans about the bill that is before us--or hopefully will be before us, the FHA Reform Act of 2010, which is a bill that provides more accountability to FHA, saves money, $2.5 billion over 5 years with FHA, and FHA has had to fill a vacuum left by a lot of the subprime lenders that made lousy loans and are now out of business. So it is a substantial agency that helps move housing in America, it is done in a prudent fashion, and the reforms in the bill make it even more prudent.

Now, my friends on the other side want to turn it into a Fannie Mae and Freddie Mac bill, but that's not what is before us. Apparently, they want to do it because they have a lot of guilt that they didn't do it 5 years ago when we could have saved this country $100 billion or more, but it wasn't done. Even the chairman, the Republican chairman of the House Financial Services at that time, wanted to see some reforms, but the Republican Senate and the Republican administration under Mr. Bush didn't want to. And you can't be more descriptive than Mr. Oxley was when he spoke of the reception that the reforms got from the White House when he said we got a one-finger salute. I mean, that's about as descriptive as it gets. They didn't want to reform it. Now they want to reform it, and they want to forget about history.

We're here, though, on the FHA bill. We're here to help turn this economy around. You want to talk about cuts? Well, let's look at Iraq. Let's look at some other things that--there may be savings in Fannie Mae and Freddie Mac over a period of time, there are bigger savings elsewhere, and we should be looking at those things. But we've got to get this country back to work, and that's what Democrats are doing.

Under the Bush administration to January 2009, we lost 780,000 jobs in that month alone. In April of this year, we gained 290,000 jobs, a swing of well over 1 million jobs per month. We've got to get people back to work. We've got to watch spending. But we've got to get the revenue side, and we've got to get people back to work. We've got to help them with their homes. This FHA insurance bill provides a reasonable and prudent insurer to assist with the purchase and sale of homes.

I urge a ``yes'' vote on the previous question and on the rule.

Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution.

Mr. Chairman, I rise to claim the time in opposition.

I yield myself 3 minutes.

Mr. Chairman, there were several aspects of the debate over housing during the period that led up to the crisis. Part of it was over Fannie Mae and Freddie Mac, but an even bigger part--because it involved Fannie Mae and Freddie Mac--was over sub-prime loans being made largely, although not entirely, on the unregulated banking system, and there were those who defended that. There were those who opposed efforts to rein it in.

In fact, with regard to Fannie Mae and Freddie Mac, I changed my own position with regard to them when in 2004 the administration, without congressional input, ordered Fannie Mae and Freddie Mac to buy more loans from people below the median income. We tried, many of us, during the period of 2004, 2005, and 2006 to get legislation adopted to ban sub-prime loans being granted imprudently. We had, the Congress, given the Federal Reserve the authority to do that in 1994, but Mr. Greenspan refused to do that. He since has apologized for that error.

So the question was not whether or not there was a general lack of discipline but whether there was a particular lack of discipline in containing sub-prime mortgages. The relevance of that is that the FHA doesn't do that. In fact, at a time of general ideological opposition of regulation of the mortgage market outside the banking system, there was very little regulation of sub-prime mortgages being granted to people who couldn't afford them, who made no down payment, who didn't have to document their income. Because of all that, we ran into these problems, and the FHA's percentage went down. That's a major reason why the FHA went down. The FHA has never been guilty of that laxity of practice.

So, part of the reason for the increase in the FHA share is that we have been able finally to cut back on the sub-prime mortgages being granted imprudently, and the FHA has much stricter standards. Yet, I want to stress--and this is a major cause of the Fannie and Freddie problem is that they were pushed into buying sub-

prime mortgages that never should have been given in the first place. That's not the FHA.

It's also the case that the FHA has stepped up in recent years, probably at congressional urging. The down payment has gone up. The up- front fee has gone up. The FHA has power now to go up to a 10 percent and has done this, a 10 percent down payment for people with a weak credit score. That's already part of the FHA's proposal.

The gentlewoman from Illinois' amendment just adopted makes it clear they can do even more, but to go beyond that, to the degree the gentleman from New Jersey wants to do, would undercut the ability of people who are capable of paying their mortgages from getting mortgage loans. That's why we have an unusual coalition opposing this amendment. It actually included a majority of the Republicans on the Committee on Financial Services who voted against this amendment, but it includes people on all sides of the housing market.

I yield myself an additional 30 seconds.

We have the Consumer Federation, the Center for Responsible Lending, the people who have distinguished themselves by being opposed to sub- prime lending when others in this Chamber didn't want any restriction, and the Realtors and the home builders, those who are in the business of providing housing, those who are advocates for consumers come together to say this goes too far and would go beyond what is needed for responsible lending.

I reserve the balance of my time.

Mr. Speaker, I have the right to close.

I reserve the balance of my time.

Mr. Chairman, may I inquire how much time remains?

First, Mr. Chairman, let me be clear, the FHA has gone beyond the gentleman from New Jersey with regard to borrowers who are risky. For borrowers with a 580 or below credit score, the FHA has already used the authority we have given them to raise the downpayment to 10 percent, so we are talking about people above the 580 credit score.

Secondly, there was a total misreading of history with Fannie Mae and Freddie Mac. Yes, some of us thought earlier there wasn't a problem. After it was in order by the Bush administration in 2004 for them to get to more than 50 percent of purchases or mortgages for people below the median income, many of us changed our position and pushed for reform of Fannie Mae and Freddie Mac.

Unfortunately, that didn't happen, because of a dispute between the Republican House and the Republican Senate, until 2007, when this House took the lead and finally got it done in 2008. But the problem was that throughout that, we had ideological opposition from the deregulators against restricting subprime loans of the sort that led to trouble, and the FHA doesn't do that.

Mr. Speaker, I would submit for the Record letters from the Mortgage Bankers Association, National Association of Home Builders, National Association of REALTORS, Centers for Responsible Lending, the National Association of Consumer Advocates, the National Council of La Raza, Consumer Federation of America who point out not that we don't need restriction but that the FHA already has them. Again, to confuse this with the situation in which ideological opposition to sensible regulation allowed subprime loans to predominate outside the FHA is a confusion of the reality.

June 9, 2010.

Hon. Barney Frank,

Chair, House Committee on Financial Services, Rayburn House

Office Building, Washington, DC.

Dear Congressman Frank: The Federal Housing

Administration's mortgage insurance program has never been

more important to our housing markets than it is today.

During this period of prolonged stress in our markets,

Congress should avoid making any program changes that would

further harm consumers and stall our economic recovery. The

organizations listed below strongly oppose amendments to H.R.

5072, the FHA Reform Act, which would increase FHA's

downpayment requirement, decrease FHA's loan limits, or

otherwise limit FHA's ability to insure loans.

Raising FHA's downpayment requirement will do little to

strengthen FHA's capital reserve ratio. Rather, it will put

homeownership out of reach for many families and for others

could deplete their cash reserves for home and other

emergencies. Increasing FHA's downpayment could

disenfranchise more than 300,000 responsible homeowners. We

strongly oppose this amendment offered by Rep. Garrett (R-

Mr. Chairman, I rise in opposition to the amendment.

I yield 2 minutes to the gentleman from California (Mr. Sherman).

Mr. Chairman, I yield myself the balance of my time.

First, I do note a certain irony. I am glad to see my colleagues, the gentleman from New Jersey, the gentleman from Georgia, praise the gentlewoman from West Virginia for a bill which they apparently found severely lacking.

I do note the gentlewoman from West Virginia voted against the prior amendment from the gentleman from New Jersey. I don't know where she is on this one, but it wasn't in the bill that I think she introduced, and for very good reason: A 10 percent cap is wholly arbitrary.

Now, the gentleman says it's going to crowd out the private market, but the leading participants in the private housing market oppose this amendment, including the Mortgage Bankers, as well as Realtors and Home Builders, as well as all consumer groups.

Beyond that, the reason the FHA went down so far from 2001 to 2007-- interesting group of years; guess what was happening during that time?--was that there was a resistance to regulation of the subprime market.

The Federal Reserve was ignoring legislation Congress gave it in 1994 to regulate subprime lending. The Bush administration, in 2004, ordered Fannie Mae and Freddie Mac to increase the subprime loans they bought, which is one reason why I changed my position on the need to be tougher in the regulatory field. And the FHA lost out because these imprudent mortgages were being given without regulation. The FHA doesn't do the kind of mortgages that led to problems.

Beyond that, in recent years, towards the end of the Bush administration and with even greater force during the Obama administration, the FHA has been improving. The FHA has on its own said, if you've got a 580 credit score or below, it's a 10 percent downpayment. We mandated that they go from 3 to 3.5 percent downpayment and increase the upfront fees.

In this bill--and the gentlewoman from West Virginia deserves a great deal of credit, along with our colleague, the gentlewoman from California--the FHA is given credit to require lenders who get loans placed with the FHA in violation of the guidelines to take back those loans. So it wouldn't be the taxpayer that would be on the hook for those loans that shouldn't have been granted and that violated the good guidelines of the FHA; it will be the lender.

It also gives them the power to debar people who have a bad record, which is something they haven't had before.

So we are not talking about the old FHA; we are talking about an improved one. And we are talking about an FHA that stands in great contrast to the unregulated subprime market.

Finally, the gentleman says, ``Well, it doesn't take effect until 2012.'' Neither he nor I knows what the housing market will look like in 2012. And if there's a reason not to do it now, that might also be there in 2012. No one can predict whether the housing--and maybe in 2015 it will be back again into trouble.

The housing market we don't believe is going to crash like it did before, but the basic point is this: The FHA has been the alternative to the kind of unregulated, irresponsible subprime mortgages that many of my friends on the other side protected, the kind of mortgages which they prevented us from regulating until 2007 when we were able to pass a bill in the House, over the objection of many of those who have spoken already, to regulate subprime mortgages. And because we did that, the Federal Reserve finally used its authority.

I hope the amendment is defeated.

I rise to speak on the motion.

I don't know yet.

Well, I was disappointed that my colleague on the Financial Services Committee wouldn't observe the tradition that we have of yielding to each other. If he had, I could have saved the Members a lot of time because I am going to urge people to vote for it.

I will say that it might need a word or two of improvement. If it had, in fact, been offered at the Financial Services Committee, either provision, we could have accepted it then, but then Members wouldn't have had a chance to make dramatic speeches on the floor, so I suppose that explains why we had to go through this.

I urge adoption of the amendment of the recommittal motion, and I yield back the balance of my time.

Mr. Speaker, pursuant to the instructions of the House in the motion to recommit, I report the bill, H.R. 5072, back to the House with an amendment.

Mr. Speaker, I demand a recorded vote.

Madam Speaker, I thank the gentleman, my friend from Colorado, for giving me such time as the Republicans may have, and I yield myself such time as I may consume.

Madam Speaker, this will be the 31st time that I have handled a rule on this House floor in this Congress, and this is the 31st time that I have yet to handle an open rule. In fact, out of the over 120 rules of this Congress, we have not debated one open rule. Not one open rule this Congress.

I don't believe that closing debate, limiting amendments, and shutting Democrats and Republicans out of thoughtful ideas is a good way to run this House. And I know and you know, and I say this often, that our Speaker, Speaker Pelosi, promised when she told the American people that she would run the most open, honest, and ethical Congress, I don't think she had this in mind, and I know we didn't as Republicans; and I don't think the American people did, not to have one open rule this Congress.

I know we are getting ready to finish this Congress in a couple months. But one would think that when the Speaker spoke those words, she had something in mind other than closed rules or some modified rules. Open, honest, ethical. Not one open rule this Congress.

One thing that I do have the opportunity to say today, however, Madam Speaker, is that the call for a vote on the previous question to allow for this week's YouCut winner will be good. YouCut is the new Republican online voting tool for Americans to pick what wasteful government spending they would like to see cut every week and which should be an agenda on this floor every week.

I admire the majority for finally having a bill that saves the taxpayer money. Don't know how many times that's happened in this Congress or under this Speaker. But what I can tell you is hundreds of thousands of Americans this week have been on the YouCut site, and they came up with lots of answers. So I applaud the Democrat majority for coming up with, finally, a bill which will save taxpayers money.

Additionally, today we are here to discuss an important step in providing the Department of Housing and Urban Development, also known as HUD, with the tools it needs to supervise and monitor the single- family mortgage insurance program run through the Federal Housing Administration, known as FHA. That's what we are here for, and I am glad that this bill is here. Saving money and running the government more efficiently, and providing the tools, is what Congress should be for.

It is necessary to understand why these changes are important. And in my opinion, my colleagues, who really work across party lines, need to do more of this kind of work of helping rather than providing more rules and regulations. The continued importance of protecting the taxpayer is primary and important to people who are paying the taxes. They want to know that there should be more work like this being done in Washington.

As the housing market collapsed over the last 2 years, private lenders have scaled back their activities, with the FHA significantly increasing its share of the single-family mortgage market from less than 5 percent to now more than 30 percent. With higher mortgage share comes increased taxpayer exposure. The elevated levels of delinquencies and foreclosures across this Nation have had a detrimental effect on the financial health of the FHA, which is why reforms in this legislation are an essential piece of fixing and addressing this problem today.

I applaud the gentleman, Mr. Frank, and I applaud the gentlewoman, Mrs. Capito, for working together, for essentially bringing a huge part of Mrs. Capito's bill to the floor today. The taxpayers have already paid their fair share for bailouts and failed stimulus programs, resulting in record debts and record deficits. It's important to bring some stability and to recognize problems before they happen.

H.R. 5072 incorporates a majority of the provisions from my friend, Ranking Member Shelley Moore Capito's, legislation, H.R. 4811, the FHA Safety and Soundness and Taxpayer Protection Act. This legislation from Representative Capito provides additional enforcement, the financial and risk assessment tools necessary to adequately administer the program, to detect fraud and abuse, and to strengthen underwriting standards and, perhaps best of all, to protect the taxpayer.

While the legislation is a step in the right direction, it is important to note that the benefits of using government subsidies to promote homeownership to be more balanced against the potential risk of insuring less creditworthiness with borrowers, and exposing the taxpayer to additional risk, is perhaps the best part of this bill. It is extremely important to have proper underwriting, and to ensure that potential home buyers have the appropriate amount of personal funds invested in the transaction to make sure that the housing market does not collapse again.

Madam Speaker, while this legislation is an important step, Congress should do more to protect the taxpayer from having to suffer the consequences of bailouts in another government housing program.

Congressman Scott Garrett of New Jersey, also on the Financial Services Committee, offered several amendments which were not made in order by the Rules Committee, and so they will not be voted on today on the floor.

These amendments, however, are worthy of speaking about it. They would have protected taxpayers from yet another government bailout as we were setting the rules for the future to say the Federal Government should not be in the bailout business.

My friends on the other side of the aisle once again continued to shut out not just Scott Garrett but taxpayers and people who had ideas, that are called Members of Congress, and not allow a debate on commonsense solutions that save the taxpayer money.

Once again, I applaud the gentleman, Mr. Frank, for bringing this bill to the floor, but we need more and more discussion about how we limit taxpayer exposure.

I believe that Congress and the administration must be extremely cautious and always vigilant in their oversight of this program and others to make certain that the program is adequately capitalized and is run in a safe and sound manner that protects the taxpayer from the need not only for another bailout but wasteful government spending.

Additionally, as the housing market begins to stabilize, we must begin to look for ways to decrease reliance on the Federal Government guarantees and encourage the reentry of private capital and investment in the mortgage market.

Madam Speaker, at this time I would like to yield 4 minutes to the gentleman from Virginia (Mr. Cantor) to discuss his ideas on this bill.

Madam Speaker, a couple times ago when I was on the floor and we were doing the rule, we got into this debate about blaming George Bush for everything, and I would simply remind my colleague, as I did that day, I'd pin the tail on the donkey. We know who controls the spending and taxing around here.

Madam Speaker, at this time I yield 3 minutes to the favorite son from Dallas, Texas (Mr. Hensarling).

Madam Speaker, I am glad the gentleman was forthright that he tried to kill the bill that passed the House, went to the Senate and died, the GSE reform bill. The gentleman did say he voted against it, and he did.

I would also remind the gentleman, today is today, and where's the budget? Where's the budget for the House to vote on? Where's the budget? Deafening silence. We should be doing the budget, the budget where the people of the United States find out what the glide path and direction should be for this country for all this spending. Deafening silence, Madam Speaker. Where's

the leadership there? We were talking about a small FHA bill. How about for the United States, all the spending that's going to happen? So, once again, pin the tail on the donkey.

Madam Speaker, at this time, I yield 3 minutes to the gentleman from New Jersey (Mr. Garrett).

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

If I could answer the gentleman's question, Madam Speaker, of how many more speakers, I've got three or four more speakers.

Madam Speaker, at this time I yield 3 minutes to the gentlewoman from Charleston, West Virginia (Mrs. Capito).

Mr. Speaker, I yield 2 minutes to the gentlewoman from North Carolina (Mrs. Myrick), former mayor of Charlotte, North Carolina, now a Member of Congress.

Mr. Speaker, I yield 3 minutes to the gentleman from Wheaton, Illinois (Mr. Roskam).

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

Mr. Speaker, I gather that the gentleman from Colorado is now, by shaking his head, through with other speakers, and I will go ahead and offer my close. And I thank the gentleman very much.

Mr. Speaker, I think it's interesting that we blame George Bush, and yet he never got a bill to sign. It's a pretty interesting concept when we blame the President for something that never came to his desk.

Mr. Speaker, Republicans continue to offer commonsense solutions to rein in the current spending spree by our Democratic colleagues. We, like the American people, would like to see some transparency and accountability from our elected leaders.

I ask unanimous consent to insert the text of the amendment and extraneous material immediately prior to vote on the previous question.

The legislation before us today brings some stability to the currently wavering housing market; but Americans are still concerned, Mr. Speaker, about the Democratic agenda, the Democratic agenda of taxing and spending, the Democratic agenda that the three largest political items by this Speaker, Nancy Pelosi, and President Barack Obama will lose 10 million American jobs, ten million American jobs that still hang in the balance based upon the whims of this majority party.

Mr. Speaker, I think that increasing deficits, increasing spending, more taxes on business, shrinking job numbers, it's a sad day if we want to look back and blame everything on George Bush, and yet we know why this is happening. For that reason, I encourage a ``no'' vote on the previous question to bring some fiscal sanity and restraint to this body and a ``no'' vote on the rule.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I demand a recorded vote.

Mr. Chairman, I claim the time in opposition, but I am not opposed to the amendment.

I would like to thank the chairwoman of the Housing Subcommittee for her good work on this bill and for this manager's amendment. We have worked together on this amendment, as we have with the rest of the bill.

As she summarized in her statement, this provides provisions that drops out a few provisions that were problematic, but it also increases the requirements for identification, for a valid Social Security number and to be a U.S. citizen to be able to have access to FHA programs. I think it goes to the core of a lot of discussion that we've had on this floor, and certainly we want to make certain that those who are eligible for programs are able to access them and those that are ineligible are unable to access them.

So as I said, we've worked together on this amendment, and I plan to support the manager's amendment.

With that, I yield back the balance of my time.

I would like to claim the time in opposition, although I am unopposed to the amendment.

I rise in support of the amendment offered by the gentleman from California.

As my colleague from California knows all too well, rising foreclosure and delinquency rates continue to affect all areas of the mortgage market. Secondary markets for mortgages have seen a significant drawback that has led to a reduction in the availability of credit. Lenders have tightened credit

standards making it more difficult for delinquent borrowers to refinance.

At the same time, because of falling home prices and certainly in many parts of the country, like the gentleman's home district, borrowers are finding themselves unable to refinance into more affordable or fixed-rate products because their outstanding mortgage loan balances exceed their homes' values.

States such as California, Florida, Arizona, and Nevada continue to dominate the national delinquency and foreclosure markets. The Cardoza amendment prioritizes assistance to the areas that have been hardest hit by foreclosure and unemployment compared to the rest of the country.

I am prepared to support the gentleman's amendment, and I would like to say that one area of the gentleman's amendment that I particularly am in favor of--because we kind of go through this discussion on a lot of different bills, where to put the greater emphasis, and I think the greater emphasis and the greater dollar assistance need to go to the places that are the hardest hit and do have the most difficult problems. And so I think this is well-intentioned, and I would support the amendment.

I reserve the balance of my time.

Again, I voice my support for the amendment, and I yield back the balance of my time.

I rise to claim time in opposition, although I'm not opposed to the amendment.

As the gentlewoman from Illinois stated, this gives HUD the authority to increase FHA down payments and would require an annual report. I'd like to ask the gentlelady, if I could, a question about her amendment, if she would be willing to help me out with some clarification.

You mentioned in your statement that HUD had already raised the down payment requirements with those of credit scores of 580 and below up to 10 percent. So my question is, it seems apparent to me that HUD already has the authority that you are granting in this amendment. HUD can already now go in and raise down payments. I would like to know what the distinction is or what the difference of the authority is that you're granting in your amendment from the authority that HUD already has.

I yield to the gentlewoman from Illinois.

But still, the authority they have to raise down payment requirements is already existing in current law.

Basically, the change is more in the annual report and the requirement that HUD has to look at those reports and make a statement to the committee and to Congress?

I thank the gentlelady for clarification, and as I said previously, I am prepared to support this amendment.

I don't believe I have any further requests for time; so I yield back the balance of my time.

Mr. Chairman, I rise to claim time in opposition to the amendment.

I think the gentleman from Massachusetts brings forward an issue, and I have great sympathy for those who are caught basically, it sounds like, in a bureaucratic maze here, missed a date not really by their own doing but by maybe just because of the process they were involved in.

The question I have, and the reason I have skepticism on the gentleman's amendment, he began with, I think the number that the gentleman said, this may influence 15,000 folks.

Was that the number that you said in your statement?

I yield to the gentleman from Massachusetts.

The other question I would ask the gentleman, and I know we would have to go to Appropriations to get the money allotted for this particular amendment: What would be the approximate cost of something like this? This is something where we are in this time of debt and deficit, and we need to cut our spending here. I think we need to be very vigilant on the bottom line. What is the bottom line of this amendment?

Right.

Thank you. Very precise. I appreciate that.

I still have skepticism even about 10 million, which in everyday dollars is still quite a bit of money. And, as I said, we need to look at what we are doing on the bottom line here.

So, while I am very sympathetic and I think that the amendment has some merit, I would stand in opposition to the amendment.

I yield back the balance of my time.

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

Mr. Chairman, just briefly, I would like to thank both the sponsors of the bill. Certainly the intent is for more information and certainly more accurate information to look at the programs that we're putting forth and that have been put forth to see if the loss mitigation efforts are working and in what ways we can improve them. So I congratulate you and I urge support of the amendment.

I yield back the balance of my time.

I rise to claim the time in opposition, although I'm not opposed to the gentleman's amendment.

As the Congressman has stated, his amendment merely ensures that HUD will take no action between now and the end of FY 2011 to bar the Chinese drywall victims from eligibility from HUD's special mitigation and forbearance program. Since this does not create a new program or new spending, it just ensures an existing effort by HUD to extend aid to Chinese drywall victims remains in place through FY 2011, I commend the gentleman on his amendment, and I support the gentleman's amendment.

I yield back the balance of my time.

I would like to claim time in opposition, although I am not opposed to the gentleman's amendment.

The gentleman's amendment is similar to previous efforts by Republicans in past housing debates to ensure that convicted sex offenders are unable to receive the Federal aid to obtain housing through the FHA. I think the intent and the direction that the gentleman is going to absolutely appropriate. I support his amendment.

I yield back the balance of my time.

I rise to claim the time in opposition, although I am not opposed to the gentleman's amendment.

I would just reiterate that the Congressman's amendment seeks to ensure that the employees hired by FHA as a result of funds made available in this bill are in good standing and not guilty of viewing any previous pornography or any related disciplinary measures.

As the gentleman said, I think all of us, and certainly throughout the country, were stunned to learn some of the statistics of certain government employees not only viewing inappropriate material, but the absolute, incredible waste of government resources and waste of time that these employees have engaged in.

So, I think it's right and proper, as this amendment moves forward, to ensure that we protect against those abuses in the future. I support the gentleman's amendment.

I yield back the balance of my time.