Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 190 and ask for its immediate consideration. Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to my friend, the gentlewoman from…
Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 190 and ask for its immediate consideration.
Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to my friend, the gentlewoman from North Carolina (Ms. Foxx). All time yielded during consideration of the rule is for debate only.
General Leave
Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks and insert extraneous material into the Record.
Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, H. Res. 190 provides for consideration of H.R. 1106, the Helping Families Save Their Homes Act of 2009, under a structured rule. While the rule waives clause 10 of rule XXI regarding PAYGO, there is only a technical violation of clause 10 by section 204 of the bill. Because of the timing of cash flows of the Federal Deposit Insurance Corporation, the provision increases direct spending in the first 5- year period, but more than offsets that increase in the 10-year period.
Mr. Speaker, H.R. 1106, the Helping Families Save Their Homes Act of 2009, takes a vital step toward reviving our housing market, stemming the tide of home foreclosures and putting our Nation's economy back on track.
This bill would first give bankruptcy judges the ability to modify, at their own discretion, mortgage loans on a homeowner's principal residence if the homeowner meets specified, stringent criteria. Further, this legislation would also help veterans and other homeowners avoid foreclosure by allowing the Department of Veterans Affairs, the Federal Housing Administration and the Department of Agriculture to guarantee and/or insure mortgage loans modified either out of court or in a bankruptcy case.
This bill would also provide a safe harbor from liability to mortgage servicers who engage in loan modification workouts or other loss mitigation. Many services, Mr. Speaker, have claimed that fear of litigation or uncertainty about what modification actions may be permitted under their agreement have kept them from partaking in loan modifications or other workouts. With the safe harbor provisions in this legislation, they will no longer have any excuse.
Additionally, this bill makes much-needed changes to the HOPE for Homeowners program in order to encourage greater lender participation. It puts the HUD Secretary in charge of running the program, reduces fees and eliminates other administrative burdens, and changes the profit-sharing
provisions to induce more loan writedowns.
Finally, this bill makes permanent the temporary increase in deposit insurance coverage for both the FDIC Deposit Insurance Fund and the National Credit Union Administration Share Insurance Fund. This provision will enhance the liquidity and stability of our banking institutions and help restore confidence in our financial system.
Some have criticized the bankruptcy cramdown provisions in this bill, and I share some of their concerns, claiming that they will cause massive losses to financial institutions, increase the cost of borrowing for other homeowners or lead to a sudden surge of bankruptcy filings. I am not certain that this is the case. Modifications will be at the individual discretion of a bankruptcy judge who will make the determination of whether a borrower has acted responsibly and their claim has any merit.
This provision will maximize, not lessen, the value of troubled mortgages for the lender, and will avoid the decline in property values in neighborhoods where homes have been foreclosed on. It is preposterous to think that individuals would willingly submit themselves to the arduous process, negative stigma and long-lasting effects of filing for bankruptcy. Bankruptcy will remain as it has always been, a last resort.
Under current law, bankruptcy judges already have the authority to modify loans on virtually every secured claim, including vacation homes, investment properties, private jets and luxury yachts, except for primary family residences. This loophole is outdated and in my view absurd, and it must be rectified.
Some may also argue that we are bailing out reckless borrowers at the expense of those who were prudent and responsible. However, many individuals who have duly made every single monthly payment and lived within their means are seeing their home values drop and no longer have the ability to refinance due to the rapidly declining market. Some who are being swept up by the foreclosure crisis are victims of bad lending practices and some who played by the rules and acted responsibly are now finding themselves underwater through no fault of their own.
Throughout this Nation, Mr. Speaker, millions of families are in danger of losing their homes. And while it is easy to think that the foreclosure crisis affects no other than those directly involved, the truth is this crisis has had and will have a rippling effect all across the country. Not only are individuals' livelihoods gravely impacted, but as foreclosures go up, surrounding home prices go down, tax revenue for vital public services falls, financial institutions are saddled with losses, access to credit shrinks and our economy grinds to a halt. This legislation helps put a stop to this deadly spiral.
In my home State of Florida, Mr. Speaker, estimates show just in Florida alone that approximately 160,000 homes can be saved as a result of court supervised modifications. Additionally, a recent report by Credit Suisse estimates that the safe harbor provisions alone will lessen foreclosures by 20 percent.
Just this past Wednesday, President Obama announced his comprehensive homeowners' affordability and stability plan. This legislation is the first step toward putting this plan into action.
Mr. Speaker, I do not pretend that implementing this legislation will prevent every single foreclosure. In fact, there are some cases for which foreclosure is the correct action. However, this bill will help ensure responsible individuals stay in their home and will mitigate the destructive impact of foreclosures on families and communities.
This bill addresses our Nation's foreclosure crisis in a meaningful and responsible fashion by reforming our bankruptcy laws, clearing legal impediments to loan modifications, improving the HOPE for Homeowners program and ensuring confidence in our banking system.
Mr. Speaker, I reserve the balance of my time.
Mr. Speaker, I am very pleased to yield 3 minutes to my very good friend from Florida, the gentlewoman, Ms. Castor, an immediate past member of the Rules Committee that left us for greener pastures.
Mr. Speaker, I am very pleased to yield 2 minutes to my good friend, the gentleman from New York, a member of the Judiciary Committee, Mr. Nadler.
Mr. Speaker, my good friend from North Carolina refers to the President's constant statements five or six times during his joint resolution speech of calling for responsibility and accountability, and what she says is that he never pins it on anybody.
My recollection of his speech was he said, ``including me,'' when he was talking about responsibility and accountability. If that's not pinning it on somebody, I don't know what is.
Mr. Speaker. I am very pleased at this time to yield 3 minutes to the distinguished gentlewoman from Ohio, my colleague and former member of the Rules Committee, Ms. Sutton.
Mr. Speaker, may I inquire, please, as to the amount of time remaining on each side?
Mr. Speaker, I am very pleased at this time to yield 2 minutes to the distinguished gentlewoman from Florida, my fellow Floridian and classmate, my good friend, Ms. Brown.
(Ms. CORRINE BROWN of Florida asked and was given permission to revise and extend her remarks.)
If the gentlelady will yield.
I'm not in a position to speak for the Judiciary Committee, but the distinguished Chair of the Judiciary Committee obviously will be one of the conferees, and if such an opportunity exists, then I would urge the gentlelady to speak with he and the Chair of Financial Services.
I think the gentlelady brings up an outstanding point that's true throughout the Nation where people are in need of appropriate legal representation.
Mr. Speaker, I yield an additional 1 minute.
If the gentlelady would yield.
I'd have you to know that this won't be the last vehicle in straightening out financial services.
But you cite to the credit unions correctly. I, too, have had meetings with them. They're very concerned about the cramdown provisions allowing that it may very well cause increases, and they have been extremely responsible in our respective communities.
Mr. Speaker, I am very pleased to yield 2 minutes to the distinguished gentlewoman from California (Ms. Zoe Lofgren), a member of the Judiciary Committee who has worked tirelessly in producing this particular document along with Chairman Conyers and Chairman Frank and other members of their respective committees.
Mr. Speaker, I yield the gentlelady an additional 1 minute.
I do have one more speaker, and I will be prepared to close.
At this time, Mr. Speaker, I am very pleased to yield 2 minutes to my good friend, the gentleman from Rhode Island (Mr. Langevin).
Mr. Speaker, I yield myself the balance of the time.
This is a good rule for a critically important bill that addresses our current housing market crisis.
My friend from North Carolina speaks of the leadership of this committee being from California and Nevada, the Democratic majority. It is true that Speaker Pelosi is from California and it is true that Senator Harry Reid is from Nevada, but they are two people. There are other people in the leadership in the majority, Senator Durbin from Illinois, Mr. Clyburn from South Carolina, Mr. Larson from Connecticut, the distinguished majority leader, Steny Hoyer, from Maryland.
What we are talking about here is a universal problem insofar as this country is concerned. And I'm just back from an anti-Semitism conference in England, where I read, very actively, regarding their home crisis in the United Kingdom. We are also experiencing a whole global set of circumstances.
Mr. Speaker, in today's Daily Summary, the quote is made from the majority whip's office that Confucius said, ``The strength of a nation is derived from the integrity of its homes.'' I can think--and I'm sure every Member here can think--of all of our families through the years that among the things that they wanted was an opportunity to have a home. When my good friend from North Carolina speaks about returning to welfare, I didn't, when I was a boy, think that it was welfare after the Second World War when the Federal Home Administration, old FHA, and the Veterans Administration built a monument to middle class homes in this country, many of them still standing, many of them giving the foundation, a safe and inhabitable environment for people to raise their children as a result of those particular programs, followed by their successor, the Housing and Urban Development Department. I, as a young lawyer, participated in a variety of methods that gave low and moderate income families an opportunity to have a safe and inhabitable environment under programs such as 221D-3, 221H, a variety of programs rehabilitating properties, building homes for seniors, and giving everybody a chance.
I would like to add an anecdote. The value of my home in my neighborhood in Miramar, Florida, has decreased substantially. Other Members in this body are experiencing the same thing. I have paid my mortgage for 11 years every month on time. If my home value decreases another 6 percent, I will have an upside down or underwater mortgage, having done nothing but the right thing. But there are seven of my neighbors that I know of that are in foreclosure. And fortunately our homeowners association is mindful of the need that we have to work together.
This is a collective thrust, this piece of legislation. This is something to help us all. That's what Americans do. It is not a giveaway. It is not welfare when I look out for my neighbors and they look out for me, it is the potential to lay the foundation for us to get out of a crisis that is in an enormous one for this entire Nation.
Nearly 6 million households in America face foreclosure. My State of Florida has the second highest foreclosure rate after California. It's just plain old common sense for Congress to pass a bill that will help working families who have played by the rules and acted responsibly to stay in their homes and to continue to pay off their mortgages. We can't run away from this crisis. We must rebuild. And we must help those in need.
Neighborhoods in the district that I'm privileged to represent, as well as around this Nation, are struggling, homes are being foreclosed, and we have an opportunity to mitigate the destructive impact of those foreclosures on families and communities. I urge my colleagues to vote in favor of this rule so that we may support a bill that will give millions of Americans the opportunity to stay in their homes and not be forced out on the streets.
In defense of some of the services, in my district, Ocwen Financial Services has been doing loan modifications on their own, and their return rate for foreclosures is substantially less than the norm. There just are some good ones out there. The credit unions and the community banks have been doing responsible lending. They did not take advantage of people who may not have known what they were doing or who should have known and took advantage of the system to buy homes that they should not have bought. It's just that simple.
Mr. Speaker, I urge a ``yes'' vote on the previous question and on the rule. And I beg of us all to understand the critical need that we have to work together in this country, Democrats and Republicans, liberals and conservatives. Everybody in this Nation must face this problem. And, yes, we must act responsibly; and yes, we must act with accountability. And that's what this measure, as authored by the distinguished Chair of the Judiciary Committee and the distinguished Chair of the Financial Services Committee, working in conjunction with their colleagues--I might add in a bipartisan way. There are few people here that have had as many markups as they had in Judiciary and Financial Services. And when they come before the Rules Committee, all I hear of them is the fairness of Congressman Conyers and the fairness of Congressman Frank. So to say that these measures are not bipartisan or that others are not being listened to is just absolutely wrong.
Let us pass this measure.
Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution.