you're going to see legislation that put some very real restrictions on the role of servicers all of a sudden mr speaker this program doesn't sound so voluntary seems to me that the chairman's comments will exacerbate the moral hazard that the federal reserve governor warned us against in addition to the incentives that chairman provides in his legislation for holders of mortgages and they are real enticing we have actual threats of a harmful regulation if they don't sign up beautifully for this program that's not voluntary fifteen seconds has expired things seconds thank the chairman i would suggest that the recognize for an additional fifteen i would suggest that these threats do no favors the american taxpayers across our country the chairman is ensuring that we will get and active participation in this program populated with the riskiest of loans with enormous redefault rates and cost of the american taxpayer up to three hundred billion dollars mr speaker that's irresponsible and it's unwise gentleman from could be reminded of was a few years ago when i had a very very serious campaign political campaign mounted against me and had about eight hundred thousand dollars spent on television ads telling people how terrible i was and at the end of the campaign my mother finally called me and said are you really that bad i don't recognize the build this being described here on the floor title two entitled three we have overwhelmingly passed previously one of the  title five we overwhelmingly repair past that of the financial services committee and all of the representations that are made about title one voluntary program f h a is not out soliciting any of these loans they will evaluate the credit worthiness of every one who comes to them like this will cost three hundred billion dollars there's no way this program cost three hundred billion dollars unless every single person who gets involved in it defaults and we get nothing out of  foreclosure or reclaiming of the of the property like this is going to benefit speculators the bill explicitly say is that this is limited to home owners not people who have been speculators i don't know what else we could say on that the language is absolutely explicit that only homeowners qualify for this  program or maybe like the most outrageous one that i've heard today well the market will take care of this well the market is how we got here in the first place if the market had been taking care of this we wouldn't be in this crisis we wouldn't be having the problem that we are trying to solve and so this notion that the market is some somehow going to overnight correct itself and we will solve the problem soledad through market forces is just doesn't make a lot of sense to me but again my mother started to question financial distress right now across this country some with mortgages they can't afford some made poor financial decisions some were victims of fraud some were simply speculators acting on their instincts but the reality is that most borrowers are paying on time they are making their mortgages ninety two percent of borrowers are paying on time across this country six percent relate but not yet in foreclosure two percent are actually in foreclosure this bill is directed to the two percent on the backs of the ninety eight percent that means that one hundred ten million households are meeting their  legislation under consideration today will require those hundred ten million families bailouts the lenders on wall street and i'll tell you it's simply a case of robbing peter to pay paul we're sending the message that to financial institutions and wall street investors that when individuals make these poor choices those investors make these poor choices and take ill advised risk that the government step in and bail them out that's a bad decision in fact this is a three hundred billion dollar taxpayer back that will cost american taxpayer five thousand dollars for every foreclosed loan that is dumped into the program and make no mistake about it they will be dumped into the program and it's not the homeowners who will control this will be the the lenders and server sitters who will decide to take advantage of this for their own personal advantage the servicers and the lenders the one thing that we know for sure is that those lenders and services are only going to submit the those loans that they don't believe will pay the american taxpayer will instead be punished ultimately the real losers are the american taxpayers who are left to guarantee the loans that nobody maker in the past couple months i received several calls and letters and conversations i've had with my constituents talking about the struggles that they are making in order to pay their mortgage they don't wan somebody else's mortgage they're struggling enough to make their ends meet with high gas prices rising cost of health care and i'm not advocating that we do nothing in fact i've been working very hard in my district with the foreclosure prevention seminars working with the hope now alliance which is help one point four million homeowners keep and stay out of foreclosure keep their homes these are the things that congress should be doing is helping individuals get through this crisis we shouldn't have a massive bailout of lenders on wall street we shouldn't bail out the servicers they made ill advised they took ill advised risks and as such the losses should be from florida is recognized for thank you very much mr chairman i rise today in strong support of the american housing rescue and foreclosure prevention act i must say that i'm extremely disappointed that the president and many of my friends on the other side of the aisle have a expressed opposition to this legislation i think it's telling that the federal reserve chairman bernanke he has expressed his support for the bill mr chairman the president and some of my republican colleagues have called this plan a bailout clearly the party that claims to represent big business doesn't understand business this plan requires current mortgage holders who choose to participate not taxpayers to realize the loss of at least fifteen percent and by putting homeowners in mortgages with rates and payments that we know that they can afford we are minimizing the risk of future defaults and by doing so we are injecting confidence and liquidity back into credit markets thereby taking an important step to ensure the economy has the capital to begin digging ourselves out of this recession for anyone who calls us a bailout of risk investors i would invite them to come to my district and meet some of the thousands of families who are in foreclosures these are families with dreams and hopes they like everyone in this room are trying as best they could to live the american dream of homeownership these are not frauds and cheats they are firefighters and teachers who were forced into sub prime mortgage market in order to realize their dream the only moral hazard before us today would be our failure to act if we are to protect our economy our families and the american dream of homeownership pass this amendment today yield back the balance m speaker i think the gentleman for yielding mr speaker have i ever told you about my dogmatics i don't think i have let me just take a minute and tell you about man like a lot of us who are fathers of younger children i have four children who approached me mr speaker and begged me and begged me and begged me to get them a dog and for years i was able to avoid eye contact and was able to keep an animal out of my house and finally in a moment of weakness i said yes and a friend of mine mr speaker pulled me aside and he realized what was happening pulled me aside and said look if you're going to get a dog realize this you get what you pet you get what you pet so if a dog comes in and it's disobedient and you pet that dog and give it all kinds of affirmation guess what it's going to keep being disobedient and like not very wise we started to do that and so now we've got a slightly out of control dog now why do i mention max we're on the verge of doing that same type of conduct exactly to people who have fundamentally made some bad decisions let's take the b aside and i realize the chairman has worked hard and take the borrowers aside and just put them in a different category because what we're going to be doing today in addition to helping borrowers is really bailing out lenders and i don't think that's an over characterization i don't think that's an  unfair way of looking at this we're being told that lenders who were in this who are great advocates of the free market when they're making money they love the free market when they're making money and now all of a sudden they're coming to the federal taxpayer and saying whoa whoa whoa this is gotten a little bit more complicated that we thought and now we want the taxpayers to come in and take care of this from here out it's voluntary on the part of the lenders and think about how voluntary that would be what a great invitation these lenders go and they say here's our pile of bad debt let's take a haircut eighty five percent of the value shove that off to the which is pretty ill equipped i might add to take on this obligation let's show that off to the taxpayer and instead of getting our heads chopped off as lenders we're just going to get a haircut i think we can do a lot better i think over a period of time there is a great willingness mr speaker on this side of the aisle to try and work creatively to try and work substantively on solutions but i think as we reflect back on this this in this in the chairman's own words it's going to cost five thousand dollars for every defaulted mortgage that is assumed by the f h a times a half a million that gets us to the two point five billion dollar figure that makes many of us cringe and i don't think that those types of numbers should be allocated to lenders and bailing out lenders who made bad decisions i yield back the balance of my time almost as expired just one minute to the majority leader the majority leader's recognize one minute i thank the gentleman for yielding this is not about pitting dogs this is about people who are hurting this is prine trying to reach out to people who have been  savaged in many ways by this economy and the policies that have led to an economy where average working incomes are down a thousand dollars or gasoline prices have exploded over two hundred percent from a dollar forty six to three fifty six i would remind you under the clinton administration they went from a dollar six to a dollar forty six five cents a year during the eight years of the clinton ministration they're going five cents a week during this administration people stretched i didn't hear people come to this floor and say thirty billion dollars for bear stearns was outrageous put in the taxpayers money mr flake says he did thirty billion dollars we just talked about two hundred two point five billion dollars for literally tens of thousands hundreds of thousands of perhaps as many there's a crisis and they've asked us to respond i want to congratulate the chairman of our committee i want to thank the ranking member of the committee want to thank all the members of the committee for giving this their attention and trying to come up with a solution that works with this that partisan divisive solution absolutely not the secretary of treasury has said this is a product that is merit of serious consideration for time i thought it was fort i'm not sure now there seems to be some internal division within the administration mr bernanke you the head of the federal reserve former chairman the council of economic advisers says this is a good thing to do mr speaker today through this comprehensive landmark legislation the american housing rescue and foreclosure prevention act this house is going to act not to pet dogs but tell people this house will take decisive action to keep hundreds of thousands of families at risk of foreclosure in their omes and will help stabilize the housing markets across the nation that have been racked by an unprecedented drop in home values over the last two years make no mistake the slumping housing market has had a negative rippling effect throughout our economy it's not just people in houses that are having problems but the sub prime crisis has a fact our entire country and the availability of credit and thus it is imperative that we take responsible reasonable steps such as this to strengthen our weak economy and ultimately benefit not just those who are at risk of losing their substantial spillover effect on the housing market the financial markets and the broader economy and the answer is don't pet your dog that was bad behavior leave him alone or  we want to do is help people do the right thing he continued therefore doing what we can to avoid preventable foreclosures is not just in the interest of lenders barney frank and so many others is designed to do avoid preventable foreclosures there is little question then after an historic housing boom in the first half of this decade we now are faced with the housing crisis foreclosure soared to an all time home high in the last quarter of twenty zero seven according to the mortgage bankers association more than one point two million properties receive foreclosure notices and twenty zero seven up seventy five percent from two thousand and five and one in thirty three homeowners is protected projected to be in foreclosure over the next two years so much for a great economy this legislation and in short w expand the f h a program so the bar is in danger of losing their omes can refinance into lower cost government insured mortgages that they can afford and repay i heard so much talk about family friendly congress family values caring about children what can be more family friendly than keeping families in their homes i think not to many things but to be clear this bill will minimize taxpayer exposure in fact the congressional budget office estimates that the cost of putting homeowners into affordable loans under the bill would be not thirty billion dollars not twenty billion dollars not ten billion dollars but a total of two point seven billion dollars a few days in iraq few days in iraq not a month a few days  running contrary to the rhetoric coming from some this bill is not a bailout for irresponsible lenders or borrows only primary residences are eligible investors and lenders must take significant losses the own as they should the owner of the old mortgage of an old mortgage can only receive eighty five percent of the current value of the home and in return for an f h a guarantee on the mortgage borrowers much share with the government any profit from the resale of a refinance known the government will only have liability if the borrower defaults and the amount recovered in foreclosure is below the outstanding debt still owed furthermore the legislation homeowners opportunities where having people come home from iraq we're going to be talking about that they may have lost their home because they went to iraq and they couldn't keep their homes this helps them get back in a home and aisle let's mitigate the effects of the bursting of the housing bubble let's prevent hundreds of thousands and perhaps up to one million people from foreclosure and allow american families to stay in their homes homes through this responsible legislation let's stabilize our housing market help millions and millions of homeowners not at risk of foreclosure but whose neighbors are at risk for foreclosure and if they are foreclosed upon will see their home values deteriorate so the assistance is not just to those at risk of foreclosure but to all those who are in communities where homes are at risk let's pass this comprehensive bipartisan legislation today and work to get it to the president's desk without delay i am hopeful that the president will see fit to sign it vote yes vote yes on the american housing rescue and foreclosure prevention act of twenty  five vote yes for the families of the american gentleman yield back the balance of his time the gentleman from texas myself thirty seconds gentleman from texas is recognized for thirty seconds as this thing was majority leader said this is about people hurting he should know since his democrat majority came into office on this eighteen months ago we know that we have a three thousand dollars per family tax increase that has been approved gasoline and almost four dollars a gallon milk over four dollars a gallon gas this is about people hurting particularly the ninety eight percent that rent that have paid off their mortgages and their mortgages are current and if this bill is only going to cost the taxpayers two point seven billion dollars why is it written in the bill why do we see three hundred billion with that i'm happy to yield two minutes to the gentleman from arizona just like the gentleman from arizona has recognized two minutes i think the gentleman for yielding the gentleman from massachusetts knows the respect i have for his knowledge of free market economics he often scolds us on this side of the aisle when our rhetoric doesn't match our actions and he is often justified in doing so i've heard him quote adam smith and milton friedman with the best of them that's why i was baffled to see this bill come to the floor from his committee a bill that violates the same principles that he is chastened us for not recognizing he was right then and he is inconsistent and wrong today this bill has moral hazard written all over it we know that a party insulated from risk behaves differently than a party if foley exposed to risk the truth is here we are insulating home buyers and homeowners from risk and we will simply prolong the housing crisis by doing so let's be real here the purpose of this is to the purposes of this last legislation is to insulate political parties from risk that's what we're doing here if we felt such a need to intervene here we ought to remember what we did last september when i believe if i remember right we encouraged f h a to give money no money down loans why is it that we think that we're so hear about what's going to happen we can't outguess the market we shouldn't try to we simply will delay the bottom and don't lay and increase the dislocations that will occur when it politicians deciding to allocate resources and capital rather than the markets with our y the gentleman from massachusetts thirty seconds to respond to john texas he says why isn't the two point seven written into the bill it is in effect because it's subject to appropriation and no money will be spent on told us provided the three hundred billion is the number of mortgages we could be into it up to that we need to put that number there for c b o could tell us how much it will cost and written into this bill before it becomes one becomes operational will be the two point seven billion figure that's the way the process works you get a c b mr chairman section five of five of title five of this legislation contains language pertaining to the treatment of disabled veterans in the bankruptcy code every member of the house supports ensuring that no disabled veteran is discriminated against one of taining federally supported housing loans or subsidies mr chairman can you clarify for me why this provision was included in the bill and why we need to protect disabled veterans from discrimination in this language literally yield and i know sometimes conspiracy theories run around this place the reason we put in the legislation to protect disabled veterans who had bankruptcy from being issued in this program is to protect veterans disabled veterans who've been in bankruptcy from being in this program there were people who should jested that sensitivity people have a bankruptcy could be a problem i will point out by the way that thanks to some very good amendment by the gentleman from georgia mr marshall we've dealt with this problem in a more general way and he's a bankruptcy expert from the not in any way be discriminate against them and maybe therefore set a good example for everybody else mr chairman there have been reports suggesting that this provision could be used as a placeholder for a broader expansion of the federal bankruptcy law can you clarify that this language will not be expanded in conference to include a broader rewrite of the nation's bankruptcy laws or be used in conference for any other redrafting of language in compassed under title eleven of the u s code other than the specific provision  but entirely separate from this this will not be a big offering and in fact i think it would be dishonorable for anyone we've had too many examples of people trying to huge veterans and particularly disabled veterans as a political stick to achieve other objectives i would find that to be an absolutely outrageous procedure and i can guarantee you it will not happen i think the chairman for the clarification i'd also like to commend your leadership on producing a balanced bipartisan bill and allowing me to work with you during the committee market to improve the bel gentlewoman from illinois recognize for additional thirty seconds that contrary to the earlier comments from mark league in texas i want to specifically acknowledge the inclusion of my amendment to disallow participation in this program to anyone who had misstated their income on their original loan or been convicted of mortgage fraud and on the whole this legislation will help stabilize the housing market economy while not creating any uncertainty in legal contracts by reducing risk to lenders who keep borrowers in their homes instead of foreclosing i think the chairman and i yield back gentleman from texas the speaker man quite how much time is remaining on your side the gentleman from texas has six and planned to talk about something else altogether but it's the nature of the debate that causes me to simply say i do view this as a bailout of sorts but it's not a bailout for the borrowers it's not a bailout for the lenders if you understand the bill you understand that actually the deals that the borrowers get are not particularly good the deals that the lenders get are not particularly good this is intended if it works as a bailout generally for all those innocent homeowners and taxpayers who have been dragged into this mess in part because of our failure to regulate previously and part because of the incompetence virtually virtual the pitiful performance of the rating agencies and as a result an awful lot of people and our economy are being hurt and i view this personally as a bailout for the economy with an incidental effect of avoiding foreclosures in individual cases and that's nice it's nice to help people out but i'm not voting for this thing because it's helping individuals out and happens to help a few lenders out it's not a bailout for those folks in my view it's a bailout for the entire economy and all these people been dragged into it now you efforts to bring this bill to the floor i question this moral hazard argument and i question it because i have to ask myself where was the moral hazard when we bailed out ten central penn central got more than laissez fair penn central got more than market forces penn central got seven billion dollars in a bailout where was the moral hazard when we bailed out lockheed martin two hundred and fifty million dollars franklin national bank one point seven billion dollar bailout for the good of the country we bailed out chrysler at the tune of one point five billion dollars continental illinois four point five billion dollars farm credit system four billion dollars first republic bank one billion dollars major airlines got five billion dollars the steel companies got seven billion dollars where was the argument about  stearns that was never brought to the floor i've heard about a letter that's been circulated why didn't you bring the argument to the floor let's talk about the bare facts that bear stearns facts bear stearns got twenty nine billion dollars in a bail out and a thirteen billion dollar loan so if you really talk about the bare facts that bear stearns facts you're talking about for eighty two billion dollars we live in a world where it's not enough for things to be right they must also look right it doesn't look right for this country to continually bail out major corporations and when the american people little people as we sometimes call them here they are big in my heart but the little person needs some help we don't find it within our hearts and within our power to help them we have the ability to make a difference in the lives of people today this is why i'm encouraging my colleagues to vote for this bill now on the question of bad loans every loan that we take represent stockton california which unfortunately has the highest foreclosure rates in the country many families in northern california have lost their homes and the foreclosures have led to personal hardships community instability and national economic ris when my constituents asked me what congress is doing to fix the economy i tell them we're pushing to create a family wage jobs and put money back in people's pockets today we're building on these efforts by considering legislation that will provide fiscally responsible options for families struggling to stay in their homes last december i hosted a workshop for foreclosures in stockton with my colleague dennis cardoza to provide housing counseling to local families while we expected to turn out to be high participants started lining up two hours early and ultimately more than five hundred people showed up i heard heartbreaking stories from my constituents and this is just one single little stray s today's legislation is so important one of the biggest challenges facing the housing market is the high cost states like california is that housing programs have not kept pace with the times unrealistic low loan limits for fannie freddie and f h a mean people living in the high cost states have not fully benefited from these programs the economic stimulus package temporary loan limit increase to to seven hundred thirty thousand dollars raising loan limit injects liquidity into the mortgage market to provide access to credit it opens new opportunities for refinancing however since these increases are only temporary it is clear that making them permanent will have been official effects for the housing market i notice the homeowner opportunity act to permanently raise the loan limits and i'm pleased that and to my friends from texas who have heard stories that this is a bailout this is no bailout this is about strasburg colorado where they are there have been foreclosures around the neighborhood and one person trying to sell our property can no longer do that because the value of their house is less than their mortgage their innocent they didn't deserve this secondly coats we're in edgewater colorado where the lender the appraiser and the building owner got into a young couple buys a condominium and now the properties around here are around them are foreclosed they are going to lose this property they need assistance they're innocent they deserve some help from this government same thing in c colorado i heard all of these stories last night on a telephone town hall while we were debating the neighborhood stabilization act and that's what this bill is about it's about the community as a whole mr marshall from georgia understands what this bill is about it's about looking after our neighborhoods and protecting our neighborhoods and averting five hundred thousand foreclosures across this country where our neighborhoods our cities our towns are going to pay for this if the federal government doesn't assist in some fashion this is a nationwide problem the nation has to stand up we have to deal with this this bill does it in so many ways and i just appreciate it coming to the floor vote yes on speak out like to first thank our chairman barney frank for the leadership that he's provided on dealing with the serious problem in america i'd like to thank the members once more for the support that they gave me on the neighborhood stabilization act that we passed today that coupled with what is being done now will go a long way to providing real assistance to our cities to add counties to as states and to our citizens i know that it has been said over and over again today that people are suffering that there are people who got into these loans that did not understand what a no doc loan no interest rate loan was an arm that was going to reset within six months one year or two years and that the mortgage would double triple or quadruple their innocent hard working americans out there every day who simply want to live the american dream and many of them were steered into these loans because there was this big big housing bubble we had these local initiators of loans to our banks and i markets brokers who discovered they could package them securitized them they would be invested in on wall street and the wall street people invested mightily in them and now the services have them all and the only thing that the services can do is floor close on these properties well we can do something about it i don't know why we have to argue and fight about whether or not we can have the american people they sent us here to look after their best interests i don't understand why anybody can call this a barrel out when in fact nobody has said anything about the bell out of the almost thirty billion dollars for bear stearns if we can help wall street we certainly can have the people who vote for us every day and who sent us here we have people all over this nation in different ways some people are confronted with a hurricane or storm are flooded on earth quake american citizens expect us to be you mr speaker housing is a very complex issue we're talking about a person's home real people with a real problem prior to congress i was a realtor for over twenty years i've worked with many families to help them realize their dream of homeownership i've served as chairman of the virginia housing study commission i've seen good markets and bad in many changes to the mortgage industry i've struggled with how to define and protect against predatory lending practices i've seen interest rates and loan products that seem too good to be true unfortunately we've seen they were too good to be true there are many components of this bill which i think are excellent and acting those reforms now would have a huge impact on the housing market and be helpful to american families my concerns with today's package include the establishment of a new affordable housing fund and a three hundred billion dollars federal loan guarantee program a lender with troubled loans could contact those homeowners offer a federally backed loan and refinance at a loss but now he's moved that loan from a complete loss to eighty five percent current value that will be guaranteed by the federal government he now has no reason to work with borrower neighbor a bought at the height of the market he struggles but pays neighbor being negotiated eighty five percent of current value a huge impact on the value of surrounding properties this is a voluntary program can't we develop incentives for the private sector and not obligate the american taxpayers with three hundred billion in loan guarantees there are several things that are currently making a difference the f h a secure loan program hope now an alliance to prevent foreclosure through outreach to delinquent borrowers and freddie fannie mae is currently working on a streamlined short sale program to allow the sale of properties that are over mortgage the fact is one out of two pennsylvania two minutes gentleman from pennsylvania is reckon us for two minutes thank you ms speaker for the opportunity to speak much has been said about how we got into this situation although someone said it best i thought too little oversight too much greed too little understanding but there are several things we do understand there's no single cause for why we got into this housing crisis so there is no single solution but second we must act now this march there was a fifty seven percent increase in the number of defaults than there was the previous march a year ago and of all the adjustable rate mortgages that will be reset this year to higher interest rate eighty percent are in the sub prime category those sub prime rate twice that of a fixed rate in short even before the interest rates go up we have so many people who are already in trouble with their loans and third and most importantly this is not just about the homeowner  mortgage lender this is about all of us what we've seen is autonomy not just the housing in the manufacturing industries but it's actually now seeped over into the bond market for municipal bonds and even for education to where because of the exposure bond insurers we cannot have bonds that are being given in these categories so therefore i think very highly of this bill i think it's done in the right way it's providing relief to actual real people those who are living in homes not speculators second it steps over and it doesn't give any bailout to lenders that actually says you must write down your loans and that you must pay into a revenue reserve fund and do closing costs and most importantly it has the government reaping the wards when the houses inevitably go back up in value i think this is great for the economy mr chairman i would just ask one thing to consider as we go forward i'm taken by incentivizing people to come forward and as someone on the other side said in even by being exposed to more risk the c b o did say that out of the two point eight million foreclosures expected to occur if nothing happens between now and twenty thirteen about five hundred thousand could have twenty second bill h r thirty two twenty one the american housing rescue and foreclosure prevention act of two thousand and eight and in particular h r fifty eight thirty the f h a housing stabilization and homeownership retention act of two thousand and eight which is part of this housing rescue package i am proud to be a co sponsor of h r eight fifty eight thirty i believe that it is a will balance measure that will go a long way towards turning around the housing crisis and address the issues that have resulted in a nationwide economic crisis mr speaker i'm especially pleased with the title two of the bill which establishes a long needed office of housing counseling within the department of housing and urban development i commend chairman frank and ranking member waters for including it in their bill i sincerely appreciate the fact that community based organizations with expertise in the field of housing counseling will be given a voice in the development of such policies i am pleased that the bill provides for the building of capacity to provide housing counseling services in areas that lack sufficient services such as large parts of my district in the rio grande valley and in the rural america in general moreover i applaud chairman frank and congresswoman waters for including in the bill the authorization of three million dollars for public service announcements as part of the x national public service multimedia campaign this campaign will help persons facing mortgage foreclosure elderly persons persons who face language barriers and low income persons i want to take this opportunity to thank them for increasing the availability affordability and quality of housing in rural america and i believe this bill will do more of the same mr speaker i believe the product chairman frank and congresswoman waters have texas has four and a half minutes remaining the gentleman from massachusetts thirteen and a half general of texas to continue reserve gentleman from massachusetts i yield two minutes to dent morgan jim and morgan's recognize for two minutes mr speaker last year one point five million american households entered foreclosure and this year the number of american families in danger of losing their homes could be as high as two million these foreclosures could reduce overall economic activity by a hundred sixty six billion dollars this year as the effects of the mortgage crisis spill over into other sectors of the economy in my state of oregon the foreclosure rate among subprime borrowers increased by twenty eight percent in the fourth quarter of two thousand and seven over five thousand oregon families are currently in foreclosure more than half of whom hold subprime mortgages but this debate is not about facts and test statistics if it were it would be over by now by requiring that that the holders of debt take a haircut down to eighty five percent of current market value we are sharing the pain by requiring that people who are working in order to be eligible for this program  meet need are paying at least thirty five percent their income in order to be eligible we are exercising a responsibility what this debate is really about is a matter of values and their the the values being expended on the other side of this debate are absolutely astounding and nothing else trades a better than a movie that i love it's a wonderful life george bailey was the hero of that movie and he was dealing with a hard hearted old man named mr potter and and mr potter said to george bailey as he was trying to save american households have you put any real pressure on these people to pay their mortgages and mr george bailey replied times are bad mr potter a lot of these people are out of work then foreclo george bailey answers i can't do that these families have children not my children said mr potter well what we hear from the other side is not my children these folks are irresponsible minute to the gentlewoman from california gentlewoman from california as reckon us for one minute thank you mr speaker and let me thank chairman frank and chairwoman waters for bringing this badly needed legislation to the floor today millions of families  america and they are facing their dream of homeownership and turning into a nightmare foreclosure rates have reached crisis levels in california and in many parts of my district too many families are facing devastation and entire neighborhoods mind you are on the brink of collapse home ownership has been the primary means that most americans have to accumulate any kind of wealth to send their kids to college to start a small business or to do whatever it is they want to do to be part of the american dream  chairman frank for including language in this legislation that i introduced with senator mccaskill to address the reverse mortgage proceeds protection act which protect seniors for you from losing their homes we're really beginning to see some of the same abuses in the advertisements and high pressure sales the reverse mortgages as we saw on the sub prime mortgage crisis these provisions will ensure that vulnerable seniors are fully informed of hidden costs and thank you mr speaker i heard from one of my constituent to said they felt like that this bill was not really about rescuing homeowners they felt like it was another i can't at well distribution they feel like it's a risk in the cars that are born and should be borne by irresponsible lenders investors in bars are going to end up being transferred to the federal government and thereby to the american taxpayer once again and this time it is to the tune of three hundred billion dollars what the bill does is the good actors the ninety two percent of all mortgage holders who are paying their mortgage on time they're going to end up being liable for the irresponsible actions of lenders and speculators the way my constituencies it is that this is a risky business this congress should not send a message that it is acceptable to give up on a novel de sion because you're going to have a government by a out or a bailout and you're going to be able to cut your personal losses last weekend at a seminar in my district i worked with some government and private sector initiatives such as hope now working to help homeowners weather this storm to get the information to them they needed and mr speaker that is what we should be doing educating homeowners on the options that their disposable their disposal as opposed to passing measures that reward recklessness and provide a safety net for irresponsibility congress does not need to bail out the housing market it needs to encourage a kick start i hope that my colleagues will join me and that together we will vote this bill down thank you and i yell back  homeowners have signed mortgages where they can't afford to make the payments especially as they're adjusted upwards we need to write down the principal amount to something that these good homeowners can afford but we're told don't bail out the lenders there are two ways to write down the principal amount of the loan and involuntary way through the bankruptcy court and we had a bill before this house which authorized the bankruptcy court in very limited circumstances very well tailored to write down the balance of the loan don't bail out the lender just tell the lender they have to take less that bill is not going to pass it's a posed by republicans in the senate the second way to do it is the voluntary way you make a fair offer to the lender that if they'll write down the principal amount then they'll get a guarantee of that lesser amount from the government so at least they'll get paid something now we're told to vote against this bill because it bails out lenders were giving hypocrisy a bad name if you're going to help homeowners you have to write down the balance of the loan and people come to this floor and they say well all week we can't do it the voluntary way and we can't do it the involuntary way but just as soon as we find some other way they'll be happy to bail out homeowners the fact is they have voted against using the bankruptcy court to write down the principal amount and not give the lenders anything and now their sale is saying that when we make a fair offer to the lenders to do the same thing we're bailing out the lenders i have a lot of respect from anybody who can come to this floor and just say they don't want to general from new york for you say the gentleman from new york i thank the gentleman for leading of for yielding to me and for his extraordinary leadership on this extremely important housing stimulus package it is good for the country and good for my speakers just by self to quote ok thank you mr speaker i rise in strong opposition to this bill i think we've had a good discussion here too but today unfortunately it was a discussion only and there was not opportunity for our side or really any other members to participate in this process of our offering amendments that could have most likely made this a better piece of legislation there's several reasons i suppose it's number one is the flawed process in my tenure in congress i've never had a major piece of legislation like this that i'm not even going to get an opportunity to cast my vote now i know people that are watching this process are wondering what now you mean we've been talking all day about it this important piece of legislation that the other side says this is a very important to the american people yet their member of congress is not going to get a vote on this process it's a flawed process we brought an energy bill over stripped all of the energy provisions out of it we're putting housing into an energy bill i still don't understand the mechanics of that and maybe someone later on can explain that to me this is also about not saddling the american people that are are excuse me already struggling to make their own house payments to make their own rental payments to pay has gasoline prices in the history of this country and the high electric cost in natural gas costs it's about saddling them now with the payments for their neighbor what's a one hundred ten million people that are doing what the best they can walk to the united states congress to do is to leave them alone and really start dressing the major issues that are important to the american people it's about not rewarding bad behavior we have some lenders and we have borrowers that went out and bet that the housing market was going to go up and it didn't go up and in fact unfortunately in some places it went down and now people are faced with a negative effect that we are smaller equity in their home and we are sympathetic to that as i said earlier i've been in the real estate business for a very long time i've seen the markets go up i've seen the markets go down and sometimes that causes a situation where people don't have as much equity but what you have to understand is a lot of people went into this process with no equity and now this bill says you know what we've got a deal for you because now we're going to help create equity in your house by putting your neighbors at risk this is a bad bill i encourage members to vote against this bill i'm sorry we can't vote against it vote against the mr speaker i understand the complaints about the process remember though that several of the bills being reenacted today have already been fully debated amended on the floor there is one that was not subject to the normal process and i'm a general defender the normal process it's the f h a rescue bill and i will say in this case i think it is fair to ask members a vote for an up or down it is a very integral mated piece of legislation it tries to balance it incentives it would be easy to put it out of whack and in this one case i think it is fair to say you could vote it up or you can vote it down members will have a chance to vote on it well it's in the form of an amendment of that amendment is defeated it dies i also want to address the issue of the amendment offered by the don't know kind of general ohio routing preemption because it may be some confusion i personally spoke today with representatives of the banking organizations american bankers association the independent community bankers and the mortgage bankers they took the malaysian that if we were able to adopt the language offered by the general while they would find us a bill that they would accept and would not seek to defeat because of an objection we were unable to do this so technically yes they had previously said they were opposed to in that form they have also said after we outlined the by the attorneys general by the state bank supervisors by the advocacy groups will be the language that's in the bill so that there be no doubt about that there is no substantive objects you know what will happen now let me talk about the bill in the market i think it is generally unwise to us to enact legislation which in an ongoing way displaces the market but that's not what we do here there is a part of the reality of the market that is called market failure people have one nobel prizes joe stiglitz for working about market failure clearly there has been market failure with regard to mortgages the market failure was the breaking of the lender borrower writes in chip and the substitution of securitization without appropriate countervailing incentives this bill today is no ongoing intervention in the market it is time limited and limited in specifics to a subset of mortgages it seeks to do to a some extent to mitigate a market failure it will be the market i believe stronger going forward so i accept the general maraton is reminding me that i should stay true to free market principles this bill is true to free market principles and let me quote one of them leading advocates of free market principles in the english speaking world the economist called t attention by the staff of the financial services committee which has done enormously good work in substantively putting this bill together and in listening to me talk about it in various ways and i appreciate both aspects of that here's what the economists said the plan is hard to be a bailout talking about this bill is the current economists one hundred would have to write down their loans to eighty five percent of the current value of a house by the way under f h a secure the administration's plan they get one hundred percent loan put in then get somebody who's defaulted and get them a hundred percent loan we require an eighty five percent write down to the value borrowers would pay a fee for the insurance and give up a share of any major price wise to the government by the way they would also be barred for five years and taking out a second mortgage so the borrowers under this if there was an increase in equity would have to care much over the government and the earlier in the process in which they sold out the more the government would get that's not the bailout that people have described and people worry about mark has been i would assure people no b who goes through this process will say at the end of a boy that was fun where do i buy a ticket to get back on space mountain they will be deterred but we're not relying solely on that two thirds plus of this house many of my republican colleagues didn't do it but many of my republican colleagues did we voted for a bill to regulate subprime mortgages going forward we're not simply buying on people's bad experience we have put some restrictions on that i believe this is pro market the markets now are in trouble because a lot of people who are very smart bought things they shouldn't have bought including sub prime mortgages and having bought things they shouldn't  the sink and the shower because they have been so badly burnt if we do not adopt appropriate responses to this market failure we will not cure it and the lag in investment will continue we are working through the market here it is voluntary that a lender said we're going to cut it down to people said well they'll dump all the bad loans have the republicans who say that because many republicans are with us so little confidence in the f h a nothing  eight hundred dollars per loan do you really think if the loan fails it would only cost us forty eight hundred dollars that figure that two point four billion is c b s saying that there won't be many failures because of the criteria that are in this bill and people said what about the people who jobs when we should be gaining them in which real wages have been pulled down and the single biggest cause of this recession is the sub prime crisis and it's reverberations this is a rare case of a micro economics factor causing macro economic problem and the market got us into this and we don't say junk the market and i know people said all the markets way too smart people said me you know some smart people don't agree with this proposal well i agree with that but i also have to note that no dumb people got america into this problem you had to be really smart to understand collateralized debt obligation derivatives and the problem is that we need to restrain some of their instincts and the market function again and it simply will not happen if you're simply going to go here's what we say and by the way i support it hope now when it came out but i don't know how to floor it was based on the notion members on him pay attention  almost every else made of not foreseeing the depth of the drop in house prices so hope now has been overtaken by events we here are responding to reality in a way that is pro market and minimizes the outright i hope the bill passed all time for debate has expired so in the house resolution eleven seventy five the previous question is ordered the question of the of the motion is divided between the three house amendments the first portion of the divided question is will the house concur in the middle of the senate with  this will be a fifteen minute vote pursuant to clause eight of rule pursuant to clause eight of clause nine of rule twenty this fifteen minute vote on concurring in the senate amendment with amendment number one will be followed by five minute vote on concurring in the senate amendment with a minute number two concurring in the senate amendment with a minute number three adoption adopting the motion to instruct offered by mr flake and adopting the motion to instruct offered by mr can