New Direction For Energy Independence, National Security, And Consumer Protection Act And The Renewable Energy And Energy Conservation Tax Act Of 2007
Mr. President, this morning I am pleased to join my friend and colleague, the chairman of the Senate Banking Committee, Senator Dodd, in supporting the pending amendment. When a crisis such as the one we are now facing arises, I believe…
Mr. President, this morning I am pleased to join my friend and colleague, the chairman of the Senate Banking Committee, Senator Dodd, in supporting the pending amendment.
When a crisis such as the one we are now facing arises, I believe the American people expect us to provide effective and timely solutions. Chairman Dodd and I have worked together to develop a package of targeted measures intended to help stabilize and strengthen the housing and the financial markets. We chose not to pursue partisan goals here. Instead, we are focusing our efforts on achieving the best possible results in a bipartisan fashion. I commend the chairman for his willingness to work with me in this manner.
The amendment before us provides immediate help to the marketplace by reforming the Federal Housing Administration, allowing it to provide greater liquidity and thereby enhancing the options available to America's homeowners. It also provides additional funding for foreclosure prevention counseling, which will hopefully help many homeowners stay current on their mortgages and be able to remain in their homes.
In order to prevent this situation from repeating itself, the amendment increases the disclosures--this is very important-- disclosures made to consumers when they obtain mortgages and close their loans. I believe that giving consumers; that is, buyers, more information and greater ability to understand the choices they are making will help them avoid the pitfalls and bad decisions many underinformed consumers made in the recent past.
To better protect our soldiers, sailors, and airmen, the amendment extends additional consumer protections and provides those returning from combat a chance to get back on their feet before they face foreclosure. That is the least we can do.
In an effort to provide communities with the ability to clean up the damage caused by the foreclosures that have already occurred, we have included funding to allow States and communities to buy and repair foreclosed residences. Attached to this funding is a requirement that any profits from the sale of properties must be used to buy and repair additional properties, similar to a revolving fund. I believe that reuse of this funding in this manner will maximize the impact of these dollars and minimize the possibility that funds will be wasted or profits inappropriately pocketed, as has been the case in the past.
The amendment before us also contains a number of tax-related provisions prepared in a bipartisan fashion by the chairman and ranking member of the Finance Committee, Senator Baucus and Senator Grassley.
I believe this is a focused and targeted piece of legislation that will address in an appropriate manner a number of the difficulties we are now facing in the housing market. There is no doubt that we are experiencing serious economic stress in communities across the Nation. As I said in the beginning of my remarks, the American people expect us here in the Senate to provide effective and timely solutions. But I would caution my colleagues here that while we are in agreement on the measures contained in this bill, there is a line that I believe we should not cross. That line is represented by a taxpayer-funded bailout of investors or homeowners who freely and willingly entered into mortgages that they knew or should have known they could not afford. Nor should we be using taxpayer dollars to bail out financial institutions that also contributed to this problem. Chairman Dodd and I will shortly be attending a Banking Committee hearing in the Senate where we will be examining that very question in relation to the Bear Stearns situation.
While there are a large and growing number of homes entering foreclosure, I believe we must remember that the vast majority of homeowners are living within their means and are making their mortgage payments. While some would argue that we have a responsibility to aid those who find themselves underwater on their mortgages or unable to afford their increasing payments, I would argue, on the contrary, that we also have a responsibility to those who have made prudent financial decisions and those who may be looking to enter the housing market for the first time. There is a large group of Americans who see falling home prices not only as an opportunity to buy for the first time but also as an opportunity to move up. We must not forget them in our zeal to do something here.
Recently, I received a letter from an individual stationed in Japan. I think he very effectively makes the case for the other side of the housing market, and I would like to share this with my Senate colleagues. I will read it into the Record:
Dear Sir: While I'm not a resident of your State of
Alabama, I would like to share my opinion with you on a very
important issue. My wife and I are very concerned with the
direction government policy seems to be taking on the debate
over the ``housing crisis.'' I am an employee of
the Department of Defense and I am serving overseas in
Japan. Before we came here, we lived in Washington, DC, an
area with a very high cost of living. From the very first
paycheck I received we have been saving every month for an
eventual down payment on a home. We could not afford to
purchase a home in DC or anywhere near DC and were
unwilling to take on an alternative mortgage with 100
percent financing. As such, we rented.
When my tour is up in Japan we will probably be going back
to Washington and we hope to buy a home. We have worked hard,
saved hard, and will be putting down a 20 percent down
payment on the home with a 30 year fixed mortgage. An
important factor in our being able to purchase a home is how
much the market has softened. House prices are dropping
because the market was incredibly inflated.
Yes, people are losing their homes to foreclosure, but more
often than not they shouldn't have been in those homes in the
first place. I have very little sympathy for someone who took
out two risky mortgages to cover 100 percent of the cost of a
home that they could not afford.
And the letter goes on:
In fact, I would consider it an absolute slap in the face
to see my tax dollars being spent on people to allow them to
stay in the home they can't afford when I have been saving
for years to get into the home that I hope I can afford.
The letter goes on:
I recognize that much of the debate centers around
predatory lending practices, and people being duped into a
mortgage they didn't fully understand. I feel for those
people. I really do. But there must come a point when people
take responsibility for their actions. If you didn't read
your mortgage before you signed, you made a big mistake, and
now are going to pay for it. It is not the Federal
Government's job to save people from the natural consequences
of their actions.
The letter reads on:
As you look for a solution to the current situation please
consider the position many of us are in. We work hard, we
save, and we buy a home we can afford. Do you really want to
punish us by using our tax dollars in a bailout for those who
got in over their heads? Do you want to reward poor fiscal
discipline and encourage people once again to bite off more
than they can chew knowing that Uncle Sam is going to come to
the rescue? I believe that people like me are very much in
the majority in this Nation. But the media attention isn't
going to focus on us. It doesn't make for good TV. They are
going to focus on the family that is losing their home
because of ``corporate greed.'' No mention will be made of
the family that simply wanted more than they can afford and
now has to pay the price.
Please be an advocate not only for fiscal discipline and
responsibility in the government, but in each and every
American as an individual.
I think that is a good letter. I believe these are wise words, and I believe they are words that I hope we can keep in mind to encourage my colleagues as we work through this legislation.
I yield the floor.