Mr. Chairman, I have an amendment at the desk. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, there are instances when, after we have done all the research and completed all other options and exhausted them, a…
Mr. Chairman, I have an amendment at the desk.
Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, there are instances when, after we have done all the research and completed all other options and exhausted them, a legislative remedy may still be required in order to help our constituents in our district offices with a particular problem. Those occasions give us the opportunity to evidence how Congress can work on their behalf, how Congress can help solve problems, and how Congress could have a direct and positive effect on people's lives. This is one of those times, and I appreciate the fact that the Rules Committee has made this amendment in order.
This amendment seeks to assist those people who, while they were in the process of pursuing their dream of homeownership, were unfairly impacted by a statutory change to HUD's upfront mortgage insurance premium refund policy. Now, under HUD's Upfront Mortgage Insurance Premium Refund policy, borrowers paid an upfront mortgage insurance of 1\1/2\ percent of their FHA loan amount, and if they prepaid their loans, the borrowers could be due refunds on that prepaid insurance amount.
However, in 2005, with the Consolidated Appropriations Act, Congress included language directing that the mortgages after the time of that date of enactment, which was December 8, 2004, that would no longer be true. Borrowers would no longer be eligible for refunds of their prepaid insurance.
So now there are about 15,000 people in this country who tried to do the right thing and play by the rules. They are constituents of all of ours who closed on their mortgage before that December 8, 2004, date in order to be able to get their refund. But, regrettably, they were prevented from receiving their refund because HUD didn't endorse their loan until after December 8, 2004. Now the constituents tell us they were never adequately informed by the lender of those potential provisions, and the lenders tell us they didn't do it because they weren't told by HUD until after the effective date, in fact, not until January of 2005.
I know of one particular family in my district from Gloucester, Massachusetts, who were harmed by that new provision in the law. They did everything right. They played by the rules. They closed their loan in November of 2004 without notice of the change of law, but they have been prevented from receiving their refund of some $4,200 because HUD didn't do their mortgage until after December 10 of 2004. Certainly, that's an unintended consequence of the provisions in the Consolidated Appropriations Act of 2005.
This amendment makes a meaningful first step toward helping certain eligible homeowners and borrowers, many of whom are low-income families, as I say, who played by the rules. I say this is a first step because we later have to go to Appropriations to get money to fulfill this policy. But this clearly is the right policy. It is the fair thing to do. It is the right thing to do, and we have to discuss and argue about the money to appropriate in order to make whole these people at a later date.
But I suggest that if we all want to do the right thing by policy, I urge my colleagues to support this amendment.
I reserve the balance of my time.
Yes, 15,593, according to the Department.
I thank you for raising that point that this is a two- step process. This part of the process, in fact, talks about whether we will have a policy that will enable us at some appropriate time to appropriate the money.
We are not appropriating the money now, and I think that's a debate for another day and another time if we decide whether we want to be fair to these people or put it off for some other time, but the total for that 15,593 people, according to the Department, would be $10,372,661.61, more or less.
Mr. Chairman, I understand that $10 million is $10 million, and that's a lot of money to each one of us individually and, of course, we should be concerned. It's not proportionately a lot in our $1.7 trillion budget.
But I think the real number to look at here is what does it mean to these individuals who are harmed by government policy on no doing of their own. So if it's $4,200 to a family in my district or $4,200 to a family in the gentlewoman's district, that's what's driving our economy right now.
For people to have every expectation of getting the return of that money and to play by the rules only to have the bureaucracy undercut them, I think that's the issue of fairness that we are dealing with here.
Now, we will have an issue later on about whether or not we think now is the appropriate time to put $10 million on the floor to help people out, and that will be a day for them. But I think we should deal with the policy now and authorize that to be done at some date either this year or next year, or whenever we can make the argument in Congress that it's time to be fair.
I think we can all say in this amount, given the huge meaning this is to individuals, now is the time to be fair; 15,000 people wronged by government bureaucracy in amounts that are every bit as significant to them individually, the $4,200, as $10 million may be to all of us in the aggregate. It's an impact on their lives. It's whether or not their families are going to be able to make it through this crisis, whether or not they are going to be able to meet the everyday needs of food, health care, education, clothing and those things that are important to their family.
Again, in closing, I just reiterate, this is the authorization process. Let's set the policy of fairness. We can debate the other later. And let's keep in mind these people played by the rules, did what was right, and deserve to know, at least as a policy matter, Congress will stand with them.
I yield back the balance of my time.