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…
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.
I would like to reserve the balance of my time.
Madam Chairman, I would like to yield 3 minutes to the gentleman from New Jersey (Mr. Garrett), a member of the Financial Services Committee.
Madam Chairman, I yield to the gentleman from New Jersey (Mr. Garrett) 1 additional minute.
Madam Chairman, could I inquire of how much time we have remaining.
Madam Chairman, I am ready to close. I have no additional speakers as well.
I think we have heard a stark difference in opinion on this bill. I would like to make a distinction, as we have heard the discussion going back and forth, and I think the good-natured way that the debate has gone forward but also the intent of this bill is unquestionably a good intent.
But I would like to clarify to those who are listening that this bill is separate and apart from that person who can't sleep at night, that family who stays up at night trying to figure out how to meet the high cost of gas, how to meet the higher cost of food, and how to make their mortgage payment. We've been working with FHA to get people to refinance and to redo their loans so they can stay in their house, and I don't want there to be confusion concerning this bill and the next bill that we are going to be considering shortly after this.
This bill, separate and apart, is not going to help that family who can't figure out in the middle of the night how they are going to stay in their home, how they are going to pay their mortgage. These properties that we're also discussing are already foreclosed-upon properties. They're owned by investors, speculators, and financial institutions. And that's our objection. I don't believe we are in a position, and I don't think any of the speakers on our side believe we're in a position for a costly bailout for the lenders, servicers, and real estate speculators who have made risky bets on the housing market and who are now going to off-load their properties into a government program. I think that penalizes every single taxpayer, and it really penalizes that person at night who can't figure out how they're going to get up and pay their mortgage the next day, and that's the person we desperately need and we want to help and it's proper that we should help.
So I believe that H.R. 5818 is overly broad. It's a new government program that is going to end up creating a moral hazard, and it's going to end up benefiting not individuals, not people who are having trouble making their mortgage payments, not people who find themselves upside down in their house. It's going to end up benefiting, at the cost of the taxpayers, and I repeat again, lenders, servicers, and real estate speculators.
And with that, I urge a ``no'' vote on H.R. 5818.
Madam Chairman, I yield back the balance of my time.
Madam Chairman, I would like to claim time in opposition to the amendment.
Thank you.
While I appreciate the chairwoman's amendment, and I do believe that it does go in a direction that is much better for the bill, I still have, as I have voiced in the earlier debate, serious concerns about the bill in terms of the cost and in terms of taxpayers' dollars bailing out investors and lenders. This does not go to individual homeowners. It does not help somebody in foreclosure, an individual family in foreclosure.
And so with that, I would urge a ``no'' vote on the amendment.
I yield back the balance of my time.
Madam Chairman, I demand a recorded vote.
Madam Chairman, I offer an amendment.
Madam Chairman, my amendment is really quite simple. As we have heard myself talking and Members on my side of the aisle talking about the difficulties that we have with the bill, I realize that the odds are with it that it may pass out of this House. With that in mind, I would like to offer this amendment to what I think makes the bill better.
My amendment would very simply direct the funds to be administered through the Office of Community Planning and Development of the Department of Housing and Urban Development. This office already oversees the HOME and CDBG programs which we are very familiar with.
One of the concerns that we had with the bill was creating a whole new bureaucracy within HUD to administer this program if it were to go forward. And that is problematic any time you are creating a new bureaucracy, particularly when you are replicating some of the delivery systems that already exist within HUD. Those delivery systems exist in the Office of Community Planning and Development.
So with that, I would like to say that rather than the current language which just merely directs the Secretary to implement the program, I would prefer, and my amendment offers to direct those funds to be administered by the existing Office of Community Planning and Development within HUD which deals, as I said, with the CDBG program which we are all very familiar with working in a lot of our communities.
With that, I yield back the balance of my time.
Madam Chairman, I demand a recorded vote.
Madam Chairman, I seek time in opposition, although I am not opposed to the gentleman's amendment.
I would just like to express my support for his amendment. I think we have had this debate on the floor many times. And I want to say that we want to assure the American public, I think it's always good to reassure the American public that taxpayer funds are not going to help people here who have entered our country illegally and remain here illegally.
I would like to see, as we move forward in this debate on this and other bills, that we tighten down the types of identification that are full proof, that can be used to certify the legality of whoever the resident is residing, whether it's in public housing or in other taxpayer-funded opportunities.
I yield back the balance of my time.