of subordinate liens that in fact it is voluntary for the lienholder though the legislation before us states that entrance into the program is voluntary it seeks to layer condition that for condition upon any lender that you choose to enter into the program if participation is indeed voluntary we should allow all parties to work out a mutually beneficial agreement without first telling them what it has to look like a second my mema would make it statutory clear that these secondary lien holders rather than the government will be able to determine what is in their best interest under the pending bill secondary liens which is anything from a second mortgage to a state tax lien to real estate lien to a small business mechanic's lien as a result of putting a rough on the house or put in a new windows will get no more than one percent of the current market value of the home for example let's say the home sold for five hundred thousand dollars and is now reassessed at three hundred seventy five thousand dollars that's the new value on it but that means that a small businessman to install replacement windows for ten or fifteen thousand dollars the most he can get is thirty seven hundred fifty dollars take it or leave it  the senior lean holders can get eighty five percent of the current market vanity and so i wonder why this provision when and because if you win then you would never have anybody enter into a composition no one would agree to this voluntary voluntary arrangement this does not make sense to talk about a voluntary arrangement then to dictate the terms of that voluntary arrangement th obviously favors the large banks or the banks with the first mortgage on it in a route it does violence to the little guy with the event what does it makes it clear what the intent of the language should be and it strikes all this language that talks about the most of the junior league one hundred gives one percent of the appraised value and makes it explicitly clear that if this is a voluntary arrangement it indeed  voluntary the common law word for it is a composition and when i practiced law for years if you had a situation similar to this you'd sit down with all the parties come up with a voluntary composition  everybody agrees to take x amount of dollars over a period of time and if a payment is not made then of course that agreement is called off so all parties should be allowed to work out a deal that's favor possible instead of the subordinate lien holders being forced to accept a government prescription when the government thinks is best and i would urge support for the amendment i recognize myself for five minutes  would be glad to accept some of it we can do right now but here there are two pieces well it should be clear that the bill as written makes it all voluntary no one is compelled to participate no secondly hold as to budget debate it does say that if there is participation we want the oversight board to help with it now and let me read from the bill at page thirteen line nineteen this sub paragraph may not be construed to require any holder of any existing mortgage to participate in the program under the second generally over the spect any particular loan of a generalized further clarifying language the third paragraph his amendment is something substantial to which i would be glad to agree we did want to make it clear that we we don't want to prevent the oversight board from saying look this is how we think you should do it but people have a chance to say yes or no we think that would clarify this without taking away the right if the gentleman wanted to work with us i believe we could take the third paragraph of this and work out compromise language i would object to striking up the ability oversight board to intervene make suggestions and help structure it since it's all going to be voluntary in the end why do we want the governor bob because we think the government can facilitate this we have for instance that the federal level in mediation board mediation board stepped in a voluntary situations in private labor disputes and sometimes that's helpful we thought the oversight board could be helpful here it remains voluntary so i think it is not the case that it's either coercive or the government should say nothing at all sometimes of third parties intervention can help local gentleman would yield yes under the illinois think you the reason i brought that up is i was involved in probably two thousand real estate transactions that i practice long in a lot of those involved representing mechanic's l holders municipalities or counties with tax liens secondary mortgage holders and judgment lien holders in oftentimes you'd get a situation where you're trying to avoid foreclosure so we would bring all the parties together in a room and work out a composition and the composition could be anything from from the parties agree take a certain percentage of the sales sale assets if it was sold or green to restructure their amounts provided they would get paid something but mr chairman none of these cases would you ever have a person  get as little as one percent of the appraised of the home in byte by putting that formula in there that means that nobody would ever enter into this agreement which means that that your bill which has a lot of m section it would never be used if it's voluntary then you don't need any guidance from the federal government voluntary means voluntary they may just sit down with the parties and you work out a composition and i just you know i what it says here is you can enter to a voluntary voluntarily but the terms are not voluntary you have to take no more than one percent i would i would yield to the that you're not going to get paid off you're just going to have your debt reduced and then you still have to wait for the person to make payments or over a period of time or if it's refined as you get paid at that time i would never advise a client to accept saying you you wouldn't advise somebody to do it but the alternative would be zero i think the problem here with your amendment is that it goes too far to strike all of the language because then the subordinate l holder has nothing no reason to even protest a paid in a discussion maybe the one percent is not the right thing but something has to bring the subordinate lienholder to the table otherwise they sat there and hold everybody else that has a vested interest in this you know they hold them captive so nothing can  happen so maybe one percent is not enough to get them to the table but if you put nothing in the ad then they will never come to the table they'll just hold up everybody it's a general and go heeled up to the general quite quite the contrary if you allow the parties themselves to negotiate and sometimes it's done on the basis of the ratio of the debt to the total amount of older the debt to the value of the property but what this does is this this  is a voluntary act to say we're going to agree to it and then the chairman talked about arbitration everything a voluntary agreement does not have arbitration or anything so you know i just think it's wrong to say the subordinate lienholder can only get one percent and you're going to a big fight here because under state law the real estate taxes have a priority over it they would even trump what's owed to the first mortgage or fifty eight thirty by mr miller of north carolina at the end of the bill add the following youth action section five mortgage servicer reporting and disclosure requirements a general disclosure and reporting requirements for service modification we've heard from the industry and from president bush just yesterday that hope now is resolved one point four million mortgage modifications already but chairman bernanke has said that very little is going on the reductions of principle balance are very rare and that mortgages are going forward that are costing people their homes when they could pay a more reasonable mortgage and it would ultimately be better for the for the mortgage s to do so we've heard much the same thing from secretary paulson he is said that the lack of data being provided reliable data being provided makes it impossible to know what is really happening whether mortgages are really being modified and on what terms and a variety of sources including most recently just in the last few days of state foreclosure revenge and working group reported that seven out of ten seriously delinquent  modification and really understand what is going on what the policy needs are we really need reliable information and we just flat don't have it this amendment would begin to require that that information be  reported what servicers are modifying loans how many loans on what terms so we can begin to get a full picture of what is happening we can figure out which servicers are modifying and which are not which services have been naughty and which have been nice but right now we do not have any reliable data and we are hearing wildly different versions of what is really happening mr chairman i know this is this is a lengthy amendment and a gemma's recognized thank you mr chairman the purpose of this amendment is simple it would limit eligibility under the new f h a program to bars who had successfully made their first twelve months lee payments their existing mortgage on time again as we look at the underlying legislation we continue to have to ask ourselves who are we trying to help why are we trying to help them who pays the bill and what are the consequences again we have heard tell after tale of how many bars did not understand the meaning of the mortgage documents that they sign or they simply were unprepared for the resets that could happen under adjustable ra mortgage and i'm sure many of those stories are indeed true but there are also a number of people who default in the first year we know that no doc loans were prevalent zero down payments people who under other conditions probably wouldn't have qualified for the responsibility of homeownership got in the homes and so if we look at the data we also see that the number  loan performance data is analyzed by the f b i see tells us that the number of borrowers with sub prime loans that have defaulted in the first year before the resets that that number has tripled at least tripled over the last several years and so simply there were a number of borrowers who were not prepared for homeownership now again we have sided previously a study by the boston federal reserve saying that there were many people who got into homes who never were going to be prepared for the reset and were simply counting on appreciation to happen in the property so maybe for some people who didn't make their fur twelve payments maybe there was a depreciat in the value but still at the end of the day they weren't even able to make the payments the first year and although some may have mis understood the resets the universe of people who didn't understand what their first mortgage payment was going to be much less what their first their mortgage payments were going to be in the first year i asked would since that that universe is an incredibly small universe so many were speculator many simply were not prepared i'm sure that some had unforseen circumstances there are a lot of extenuating circumstances that occur and i have no doubt that some and this program had extenuating circumstances the so did a whole lot of other people and i think it's important again that we all know that within the last ten years there's been this incredible historic u in housing values and i'm not sure the market has the market has reset to its historic norms and if it hasn't there's a chance again that people who could not have been able to handle homeownership in the first place if you put them back in a home even at a fixed rate mortgage even after having the principal written down they still may be worse off that home could still depreciate even more and so i'm not really sure if you're doing these people of favor i've seen at least some studies that show that with anticipated further depreciation in the real estate market a number of these people could be worse off than if they simply went out and because historically c b l doesn't always get it right we're talking about three hundred billion dollars of potential taxpayer liability exposure and i think we need to do what we can to lessen that exposure and so for all of those reasons i would recommend passage of this amendment and i yield back the balance my time i recognize myself in five minutes up to him first i do want to deal with the three hundred billion there would be three hundred billion dollars of liability if everyone who got an f h a guarantee defaulted right away and we were able to recover nothing in the sale of the property there is zero chance of three hundred billion dollars being incurred as a boss's three hundred billion is  total amount of f h a guarantees that could be given chibi always doubtful that that many would in fact be taken out but again only of people got a guarantee and immediately defaulted made no payments and we got no recovery on the property would be done three hundred million decision of the f h a there was some concern that it all can mechanism might flood the f h a with too many applications and there would be no chance to go application by application that was one of the reasons why we withdrew the option back to qualify them because those were not under the terms of the mortgage they will meet made up the other problems we have is that we are taught about mortgages yes people may have overestimated their ability to pay the gentleman said there may be extenuating circumstances i think  in texas was critical of that and as he has consistently taken that position but i do think in this case he is expressing that disagreement with the notion of f h a discretion and we think if we are unable to do or temping to infuse three hundred billion dollars of lending capacity into the economy and we are specifically targeting those individuals who may lose their homes the idea here is yes to help the individual but more importantly to help general economy to try and find a bottom price to stop the continue to fall by diminishing the number for closures it's my experience that folks who are on the verge of foreclosure or in foreclosure have debt problems that go well beyond their mortgage in many instances what they've done is maxed out on their credit cards sometimes they have additional debt problems automobiles etc that's typically credit cards and in many instances taxes that turns out to be something that many many debtors in these circumstances wind up not paying and then oh ing and ultimately having problems with the chairman and i have discussed i'm concerned about the underwriting standards i'm also concerned about the appraisals that would be will be obtained and worried that we may not have the kind of protection that we might want to have in extending this credit in addition i think there will only be a small number of individuals relatively small number of individuals sought to be served by by this legislation that will actually be able to take advantage of it because mostly individuals will have additional debt problems and it seems to me that one of the things we should be contemplating is that some of this will be done in bankruptcy and some of it should be done in bankruptcy it's the only effective way that a consumer at the consumer level anyway not the business level but the consumer level the only effective way that somebody has to get a general agreement among creditors concerning how that individual might move forward this amendment simply says that these f h a guaranteed mortgages can be issued to individuals who have been in bankruptcy or are in bankruptcy the underwriting standards otherwise remain the same f h a currently has a prohibition on giving f h a guaranteed notes mortgages to anybody who has been in bankruptcy within the previous two years f h a is not in a position to give a mortgage a restructured mortgage to anybody who's in a chapter thirteen actually in a chapter thirteen with a lawyer representing the debtor lawyers representing the creditors and with a judge and a trustee that we could have a fair amount of confidence that the proposed reorganization that includes our guarantee of a new mortgage that that proposed reorganization is feasible and so it makes no sense to deny the possibility of having this reorganization a chapter thirteen or following a chapter seven or as part of a chapter seven and it also diminishes greatly the number of individuals that that have access to this and so we're not going to get the money out there as quickly so this is basically a win win to the extent that individuals take advantage of the program that we're putting together here today in a bankruptcy setting i frankly think we're more secure it's more likely that that's going to wind up being a successful mortgage and so we win because we get additional security in a sense there's a lesser risk to the federal government and of course more individuals have access to it that's particularly important in georgia because georgia  any any state that has the same sort of foreclosure process that georgia has is leading the nation right now as far as foreclosures are concerned so this amendment would simply permit f h a guaranteed mortgages in different bankruptcy well the amendment itself makes makes reference to the sections that would be amended i don't have the main vil page the gentleman from north carolina in essence we when this was were submitted it was submitted as two separate amendments i really hadn't considered whether it should be one or two that just happened at a staff level the chairman suggested that we amendment and so i think my staff worked with its many staff to come up with the a member that you have in front of you and if there's some technical problem with exactly where the insurgency is going to be i don't know whether those technical problem or not i was just trying to figure out where it went in the bill but if me if they were otherwise qualified by the underwriting standards the presence of a bankruptcy would not disqualify them per se so they would have to be deemed to be credit worthy it's been my  experience and this is what i used to do before i was a member non virgin it's been my experience that people coming out of bankruptcy having just gone through a chapter seven having resolved all their debt issues having made those days she's very very public  are actually better risks than people who haven't yet done that at this level in many instances and so this what this contemplates is that yes it is possible that these loans could be made but it's not required that these loans be made if criteria in the bill that would that they would fit under even though they've been in bank that well this bill contemplate well first this bill starts with the standard f h a underwriting requirements and those are credit scores i mean there are a number of different things have to show income you have to have  certain to pass a deal to repay is essentially the inquiry and what's the risk that that will not occur and so it's down to contemplate full disclosure of obligations sometimes that does not happen it's fairly common that it doesn't you're pretty much guaranteed that it does happen in a bankruptcy setting but often when these are privately financed outside of a bankruptcy setting debts aren't disclosed you know those sorts of things do occur in a bankruptcy setting  sort of everything's on the table and you see exactly where the debtor is and what's the likelihood of repayment and frankly if there isn't a lot to her repayment there would not be a refinancing reclaiming my time it just it seems to be just contrary to what you would you would think that would be by definition that these are the very borrowers who have demonstrated that they can't cannot pay their their debts without considerable help from the government and from bankruptcy judges the gentle lady would yield i absolutely agree in many instances i don't know what the percentage will be there will be individuals who have the problems that this bill is designed to address they're being forced into foreclosure and this is their only financial problem there will be a certain percentage of people who just have this is their one financial problem but i think those who are experienced with this particular  issue would say that's going to be a small slice of the total and that most of the folks who can reorganize and pay their debt if the mortgage is restructured have additional debt problems that have to be qualify but really who have had the most problems and shown that they have been delinquent and they have default and i know their debt i think we've been enough we have so many people who are in trouble and we're trying to help as many as we can but to put those who have really shown that they haven't been able to do that is a is broadening the scope of this bill and i think i would have to oppose it  itself i guess not surprisingly began this process i remind people but they were the ones who first said look our l w ability will don't work here if you're going to try and help people in trouble can we make them more flexible i think this is a logical kind comment to that so i there are existing f h a rules that this does this does give them the flexibility to waive let me just for members attention i'm a democrat it was drafted as an amendment to a member already adopted and it would generally go in section it goes in the section that begins at the bottom of page eighteen and twenty flexible underwriting criteria so members want to know where it is we added some language in an amendment i did yesterday and it would go in there and it amend the lan also so in trusting f h a with a far greater amount of potential taxpayer liability exposure than we have seen in the past i for one would hope that we would take the hurdle rate up and not take it down and so again i'm sitting here thinking as i understand the amendment that now people who have either been through a bankruptcy proceeding or actually in a bankruptcy proceeding can now qualify for what is a taxpayer subsidized refinancing and it's been a number of years but i practiced a little bit of bankruptcy law myself in a previous life and i know the gentlemen his practice believe what he observed was counterintuitive in that a lot of these people made great bars it was not exactly the observation i had and it is still a relatively few fortunately number of americans who end up filing for bankruptcy and listen they may be very good people and great parents and patriotic americans but it doesn't mean they're good credit risk by definition they are bad credit risk and so we have a program where the gentleman you know i'd be happy it's a it's actually that last statement that you made that i'm attempting to address it is not by definition that there are bad credit risks if this amendment is adopted but if the amendment is not adopted of then it is in fact by definition that there are bad credit risks as opposed to simply looking at each case to try to determine whether or not it is wise to extend this credit in some instances it's not and i trust the f h a or whoever is making that decision will say no understand that you've restructured your other debt and i understand that you have a contention that you can handle this but we don't think you can here's why we're not won't take the risk free reclaiming my time i understand and appreciate the gentleman's point a point well maybe but for those who engage in the act of lending money and i would also always remind the committee that there is no constitutional right to force your neighbor to loan you money that those who are in the business of loaning money that it is at least a generally accepted practice that those who are in bankruptcy those who have been in bankruptcy tend to be far worse credit risk than the population as a whole and so again part of my interest here not shared by everyone is to do the maximum amount to lessen the taxpayer exposure whatever it may end up being maybe a miracle will occur and will buy all this real estate and make money for the taxpayer but again if history is my guide hadn't been told before that the taxpayers wouldn't have to bellow out so security medicare the national flood insurance program and the list goes on the predictions  zero and be on the long term cost of these programs frankly their batting record has been a little bit suspect so i am somewhat dubious of what this is going to cost and extending even more taxpayer liability for those who are in bankruptcy much mr chairman i also want to thank the gentleman just please just move the amendment that have a plan for providing and i state for providing in personal constantly and outreach to homeowners early as well as throughout the foreclosure process the foreclosure process is it hard home in california during the first quarter five hundred seventeen home were foreclosed each day and in my district four thousand five hundred twenty three families have already lost their homes this year that's about ten percent of the foreclosures in the state and overall eleven thousand families are currently in default in my county of san bernardino and yesterday the local newspaper seventy dino sun reported that the san bernardino riverside area ranked second nationwide in foreclosure filing this year and unanimous consent submit this article for the record thank you unfortunately fifty percent of the homeowners in default never contact the lenders and then the foreclosing expert witnesses say that when homeowners a notice of default to foreclosure they never open the letter consulate is available but it's not reaching homeowners in need fifty six percent of homeowners don't even know that free constantly exists reaching out to bars and persons providing  service conflict is more effective than just sending a letter in the mail it lets the bars know that their options to avoid foreclosure is in the last line of prevention and defense in both judicial foreclosure states and none to disallow states is are able to identify bars in foreclosures for outreach expanding these efforts is important especially in and additional foreclosure states where foreclosure notices limit my m m and simply direct some of the funding in h fifty eight thirty two consular organizations that already promote this proven method to already constantly organizations already promote this method it will also strain the relationship between counseling agencies lenders to reach out to bars who are behind in their payments this is a good public policy good business because it will increase loan modification and decrease foreclosure and that's our objective is to decrease foreclosures the mortgage bankers association support this amendment of also have a letter of support from fifteen consumer gazeta sins that i would like to unanimously submit for the record and some of these men without objection so ordered thank you i'd just like to mention a couple of these just for the record the national corporation the national soul she asian a consumer advocates the lawyers committee for civil rights under law the national for housing alliance the black leadership form and that housing counseling agencies i asked my colleagues to support this simple amendment that is good that basically provides in service constantly that's important to a lot of us and all of us can relate our own personal experience those of us that were graduating wanted to pursue a college degree we know that it's very important have a consular guide as in direct us and if we have an personal consulate we know exactly what to take or if we were taking classes at a day college or university or a community college and wanted to transfer water to make sure that we had in constant con to make sure that we had the right formation the right direction so this where we could pursue this is no different in terms of individuals that would receive the n calls and services is there further discussion general miller noise we will accept this  the gentleman is recognized for five minutes i thank you mr chairman i offer an amendment to provide f h a secure with the flexibility it needs to serve and an additional two hundred fifty thousand homeowners at risk of losing their homes i would have liked to have offered an f h a modernization bill as amendment but it believe it would have been found non germane i had hoped that the house and senate leaders by now would have worked out their differences on f h a modernization legislation and sent it to the president's desk we already could have helped hundreds of thousands of hours refinance through f h a secure if the leaders had completed work on that bill but here we are with no f h a modernization legislation said we have new legislation to create a new federal program i think shifting no new risks to the taxpayer so instead of offering of it to reform its entire entirety i offer this small but mighty amendment today it strikes the underlying bill which will cost taxpayers potentially three hundred billion dollars i know you've addressed that already and replaces it with common sense language that gives f h a secure to new tools to help struggling homeowners refinance into an f h a insured mortgage first amendment would allow to refinance existing mortgages into forty year mortgages current law only allows hud to insure a thirty year mortgage the forty year mark mortgage provision has passed the house twice in legislation authored by both and democrats f h a secure can lower a bauer's monthly payment by allowing that power just to spread his or her payments over out over forty years i think it's a simple common sense way to keep people in their homes now second my amendment allows f h a secure more flexibility to use risk based pricing in doing so refinance more mortgages without jeopardizing the financial stability of the program risk based pricing is necessary to keep s budget in the black and more most importantly it will help more homeowners refinance and save their homes twice this house has voted to allow for risk based pricing in f h a never has it been more important now when we're allowing without this amendment and ministrations f h a secure program can assist five hundred thousand homeowners with this amendment they can assist then seven hundred fifty thousand bauer's homeowners and why is it in han a secure through the amendment the way to go because it isn't a taxpayer funded bailout it doesn't set up a new federal program with inflexible criteria my amendment simply gives f h a secure to new tools to help more deserving borrowers refinance with f h a secure years strong underwriting criteria forty year option and risk based pricing more homeowners more american families will keep their homes the amendment won't put taxpayers on the hook it won't leave room for lenders to dump bad mortgages into the f h a program and it can be implemented by hud immediately deserving home american homeowners in trouble don't need a new government program they need a solution to help them now and i think this is the solution so i would urge my colleagues to vote for this amendment and you know but i recognize myself for five minutes first i do have to defend myself and my colleague from alabama mr back is against the gentlewoman's criticism of us for not having reached and myself we ran into opposition from the republican leadership in the senate committee on the question of loan limits and in fact there was a proposal by the senate an insistence that the loan limits that had been raised in the stimulus package be back have this before us and i hope to adopt much of that i would note particularly for instance with regard to risk based pricing that the house bill includes risk based pricing the one difference was and i still feel strongly if you are a an income if you an individual with the the weaker credit or lower income and you were charged more initially and you make your payments and the federal government to pay you back i don't think a hardworking person making forty thousand dollars who has made all the payments achiever he is supposed to have made  argument then we could but it was the senate that said no to the space pricing that's still on the table but the other problem is that this doesn't just do what we've already done it does it in a way that kills the rest of this bill and i think that's a great mistake at this point in fact i would ask border sub superglue to this so my objection is not so much to what this bill includes as to what it kills especially since what it includes we've already passed and maybe if we pass it a second time the senate will change its mind i i'm not immediately sure of that but we do plan to go to discuss it is my hope that we will see the senate act at some level on the g s c bill on not just f h a modernization but some very clear this there were tax provisions adopted in the senate which many of us i think on both sides here don't agree with the ways and means committee here adopted housing related tax evasion that were overwhelmingly supported they had all the democrats and most of the republicans i'm hoping all that can come together but i don't think that  the purpose of this amendment would be to kill the rest of this bill because it would simply put into play measures that are already there is there further discussion if not the questions on the amendment over in favor say  minutes thank you mr chairman my amendment is simple it sunsets the program after two years in the underlying bill the oversight board has the option to extend the program for an additional four terms of six months each affectively doubling the life of the program without congressional approval i understand the extensions are only in the event that the oversight board certified the need for it to continue entering into new commitments to insure mortgages however i don't know many government programs or boards that willingly say we've completed our task one hundred percent thanks for having us we'll go now indeed the length of most federal programs seems to be just a little more that being said i think that we as a congress need to set limits my regulatory philosophy is that everything should be reevaluated for context in time the set the duration of the program for two years and i urge adoption of the amendment you'll back general california on this chairman i would rise in opposition unanticipated by many of the lenders themselves even as bank of america is trying to close a deal on acquiring countrywide bank of america is almost in a state of shock about how many foreclosures they have coming in so i don't think we need to set an artificial time limit by which to sunset this program i think it's going to play out for much longer than we would like it to play out we need to have the opportunity to continue to help the homeowners  without having to get in a big hassle and a fight about making sure that the program does not close too soon and i think we need to give everybody an opportunity the services are learning that they must do new things the lenders are trying to cooperate with us many of them as we strengthen f h a and give f h a the opportunity to do refinance so this amendment is just premature and i think that it does the i don't gentleman the whole subprime crisis is very personal with me the manager had managed my mother's finances over the last year and she inadvertently got herself caught up into that with a predatory mortgage broker in florida i've seen the  seamy side of the inside of this situation and certainly i'm sensitive to those needs my my concern on this is the agency being able to self extend without a congressional mandate i think the reason i'm offering this amendment would be to allow to come back before your subcommittee make the case for extension if there were legitimate case to extend it then it could be extended but that way congress is in the loop as opposed to being notified after the fact you're back thank you very much and i do appreciate your concerns and i'm johnny one note here if we were unicameral legislature i could be more enthused about the gentleman's amendment but the necessity for things to pass the united states senate sometimes transforms my view of what the optimal procedure  is and nurture becomes a lot more of a negative force in view of that because i think the general makes a good argument general and that's the point is there further discussion on the gentleman's amendment if not the question is on the a member those afraid will say i  proceed well i have been advised that the staff is checked five p m looks like a reasonable time for us to take some votes and we've checked on both sides so as of now because we will still have some i think we'll do some votes who may be able to do a couple more amendments and then come in and finish up on thursday morning we've been going through the amendments at a pretty good pace so members should be on notice that we'll probably start voting around five i know when you start to get into without objection is recognized for five minutes on the amendment and i thank ms thank you mr chairman and before i go into any detail about my amendment and how it affect the underlying bill i'd like to take a minute to reflect on the misc perception that exists the perception that nothing has been done by either the private or public sector already to address our nation's current housing problems this point was made at our last hearing let's go down the list what already has been done the house pas the so called economic stimulus bill f h a reform g s c reform mortgage debt forgiveness tax bill and the predatory lending bill on top of that the administration has taken action they have started f h a secure program and hope now alliance the federal reserve has acted they have continuously cut interest rates they've dealt with their bailed out any other perspective the bear stearns they created a new auction facility to increase liquidity and proposed new hope of regulations and finally a fail has taken action they have lifted the portfolio caps on fannie and freddie as well as instituted appraisal reforms so to say that nothing has been done to try and help our nation's housing economy recovery from this downturn is truly absurd and i didn't even mention the two bills that just recently passed in this committee now today we are considering yet another bill that tries to address the current mortgage problem we face but this bill goes even farther this bill actually pays people to stay in their home it would give every homeowner who is in trouble right now who participates in this program an immediate ten percent equity in their home you know normally depending on the specific a loan would take three or more years for a homeowner enough payment to build up ten percent equity but now we're just giving that to people who are having trouble making their payments i know things are bad in the mortgage market right now but i don't think they are so bad that we actually have to pay people to own their own home have to ask where is the fairness in that proposal what about the person who has been patiently sitting on the sidelines over the last several years saving up and waiting for those unsustainable prices to come down we are now rewarding someone who undertook an irresponsible loan and bought something they can't afford or also what about the person who took out a loan three years ago and has been scraping by struggling to get enough money from every paycheck to afford their mortgage and attain their own ten percent equity now or disk in to give that equity away to people who didn't to save or decided to live above their means and some say the reason this provision is needed is that we will encourage people to stay in their homes i believe the possibility of being kicked out of your house is incentive enough so mr chairman i don't have a problem with helping people stay in their homes but i do have a problem an arrangement and which they are given effectively a ten percent equity in a home when the mortgage is insured by the federal government so very simply my man would amend the bill so that the homeowners does not get an ten percent equity stake but instead receives new loans underwritten in such a manner rest on an extended terms with an affordable payments this would allow the homeowners in trouble to get reduced monthly payments and be able to make payments over a longer period of time which would allow them in fact to earn all their own equity in the home i believe this man is fair and common sense and i would ask my colleagues to support it with that i yield back rise in opposition to the amendment the one problem is it would delete de exit premium we could make it more costly to the federal government the exit premium is the means by which we would recover some of the increase in air if we could happen the exit premium is in there as a protection to the federal government we are saying that borrowers who benefit from this and who then enjoy some appreciation in the equity if it goes they hold it for certain period of years they have to share that with the federal government as the exit premium so while the gentleman said we should not be putting taxpayer money which to some extent to help some of these people who made on wise choices this would increase that because it would reduce and offset that we could get in those cases where there was an increase in member house prices are not uniform throughout the country there may be some areas where they continue to drop on other areas a stabilizer go up so i think losing the exit premium is a very senior mistake the gentleman did make clear that he thinks that the the issue of  that a great deal is already been done and that may be one of the big differences between us many of us think that well some average have been made not yet have we seen significant accomplishments when the hope now program was first discussed i was supportive of it i thought it was worth trying the problem was it and this is another issue here when the german talks about striking a document that in that we originally talked about trying to do th simply but by reducing the indebtedness reducing the interest rate holding off the reset i believe that showed itself to be inadequate that's wh that we look at reduction of principal and others that is it was the bank regulators that often suggested to watch that we do some reduction of principle so i think it's a mistake to ratio than we have talked about but again i think this is reflected by the general assessment that we have of the program has enough been accomplished we don't think that the efforts so far either  secure or hope now have been enough i would say let's note the sequence here we began with hope now where the administration did initiate an effort to reduce indebtedness and by working on the interest amount and i know there were some that were very critical of sector paulson that said he was intruding into the market which he was it of course it was voluntary but when the secretary asked you to do something it's not as voluntary a purely private citizen does when that proved not to do enough we then had the f h a step up with f h a secure and then just before we had our first hearing on this bill we got a proposal for f h a secure because they then began to make even more changes in the f h a so we have been told that he turned well enough is being done here but we have not yet seen enough being done by the administration's own view because we are now hope now f h a secure and the most recent proposal on the third version of what the administration has been trying to do that increases a public sector intervention here now it's not critical that i say i'm not being critical when i say that that trying or and in fact we got an announcement yesterday members are aware that the head of the f d i c the president to appoint human bear who's been an excellent regulator is talking about an even broader program the proposal by human bear goes even beyond what we have in this bill and i appreciate her help and advice so the notion that the gentleman said enough is being done i disagree and that's and appreciate the gentleman yield in his time and just in the comments of the chairman's park comments just two points the obviously the bill does not contain language with regard to my statement which was my introductory statement saying that we have done a lot of things and we may be see some effect likewise with this legislation maybe the prudent thing to do is to put pressure on some of these other reforms that we've already passed out of committee see that they get through the senate to the president's desk signed into law then maybe we'd actually see some positive greater positive impact upon the marketplace and the legislation that's before us is not necessary second point is with regard to the exit premium understand where the chairman's coming from you know the extra premium was simply put in there because we were giving something away if you will to the to the homeowner were saying to the homeowner in a case we're not we're not talking the cases where they're fraud or anything of that just specifically for that homeowner who maybe got in over his head borrowed more than he should have borrowed took out a loan with no downpayment took equity out of his house maybe one bought a shore house maybe bought a boat invested in other things or went on vacations to that homeowner that got in over his head bought imprudently that you know what we're going to reward you we're effectively going to pay you to stay in your house and the exit premium was to put in there to say well then if you sold your house over a certain period of time there was a recapture we're saying in this amendment that we shouldn't be treating that individual in a better postured in th person across the street who acted prudently who's been paying his mortgage day after day month after month scraping the money to the other to pay his mortgage and only after three or four years finally has gotten a ten percent equity stake in his house we shouldn't be treating that person who is acting irresponsibly better than the person who is acting responsibly and that's why the exit premium was put in this legislation obviates the need for the exit premium by simply saying that we're not basically giving that to you in the construction of the loan  and therefore the extra premium is of less import under the underlying bill on this amendment in the memo that i will do smith later on in my comments later it always simply goes down to one of fairness i have a hard time going back to my constituents the vast majority ninety five ninety six percent of the my my constituents who have been on time with their mortgages who are in their house doing whatever they can to make sure that they stay in their house to say we are not going to help you out we're going to help your neighbor mortgage or in other words this amendment would allow the f h a to protect the american taxpayer by giving the f h a the authority to use individual pieces of information that reveal the risk of the borrowers defaulting  believe that the f h a should be allowed to use all the tools available in order to determine which loans the taxpayers should be responsible in a case of default it's not fair to the american taxpayer to insure the loans of the riskiest borrowers who may not be able to pay their mortgage no matter what the terms of the loans and my constituents in south carolina who work hard and spend wisely and pay too much money in taxes should not be forced to insure the loans of someone who has abnormally low credit scores reflect problems of paying loans in the past i'm concerned that this provision in the building not f h a perhaps the two greatest indicators of the borrowers ability to to manage their mortgage their credit history number one and number two the  long history i worry that we're encouraging the f h a to repeat the same mistakes that many private mortgages and lenders are are not doing enough due diligence to determine the credit worthiness of the borrowers understand the motivations of the section of this bill to try to include as many people as possible in the program without letting a single mark or preclude their entrance in the probe i meant to help them and i'm sympathetic to all these people but unfortunately there are many borrowers who are whose loans are too risky for the american taxpayers to insure and these markers such as credit scores are meant to reflect the risk of the borrowers we should not prohibit the f h a from tel owing telling a bar or borrower with unusually low credit scores from saying that that person is to grit greater risk to insure we should also give the f h a enough discretion and i think that's what i'm asking for here in this amendment mr chairman is discretion to protect the american taxpayer from risky loans from people with scores of past link which sees only mortgages peaked people have low credit ratings in the past or have past checkers checkered with mortgage delinquencies or defaults posing an elevated risk to the lenders no matter what type of loan they get simply the f h a should get as much discretion when possible in determining which loans the american taxpayer should be exposed to otherwise i worry that they are just throwing good money after bad and mr chairman just to to to kind of wrap this up all i'm asking for is the discretion for the f h a to be able to use these tools if they need to if it is a person that has gotten in trouble one time versus somebody that has a constant history of getting into trouble i think the people that are putting the american taxpayer on the hook at the f h a should have just a little leniency and a little back in business they have been competing with many of the loan originators and financial institutions who are offering all of these exotic products and they were not able to compete and i think we have done a good those those loans where the initiators agree to write down to about eighty five percent and the institutions will be able to take them on their books the homeowners can be helped and we have given them the tools by which to do this of course the baikal scores are very important and they are to be considered but i think maybe we're saying the same thing that there should be some discretion in determining who qualifies for the guarantee and i think this would undermine this him him it would undermine all of the work that we have done to ensure that f h a is strong that its underwriting standards are strong and that they're able to use this guarantor in a way that will help homeowners many no fault of their own who have got them trouble we don't want to tie their hands we don't want to many manage them what we want to do is to make sure that they're understanding of the amendment and the way the sponsor just proposed it would actually just do the opposite it would actually strengthen it by giving them greater flexibility greater insight greater in information before in front of them before they go forward with a loan and one other interesting thing on it is that a may not have this authority under the underlying bill like that without this amendment this practice may actually be already going on in the real world and when i when i talk to lenders they're in originators and services out there they're already doing some of this and i think he's exactly right and the f h a does a fantastic job like that like the gentle lady from california said and and i'm not i'm not disputing that what i'm saying is if we give them another tool in the tool box to make sure that we don't leave the american taxpayer on the hook now if if there's a couple out there or a man or a woman or somebody that bought a home and for whatever reason they have a good credit history or maybe they've had problems once or twice then let's take a look at that let's give the discretion to the f h a but in the same breath if there is a couple or somebody out there that's bought a home and they have a consistent clarify fired a little bit more and strengthen it because i do think this is a good thing i think this is another tool in the toolbox and if the gentle lady will agree if it's already in there then let's put this amendment in here to strengthen it and with that you' your back my time i recognize myself for five minutes we do want to give the f h a flexibility but we are asked him to do it case by case there was reference to maybe one default of islam if i'm correct could see indicated inability to repay then of course they could be refused but remember on the current loan the premise of this is indeed it only operates if the holders of the loan decide to write down the principle they decide they're better off foreclosing nothing that i am aware of will stop them from doing it there's a possibility of bankruptcy bill i support that it was defeated in the senate i'm not optimistic although i continue to support it but in general to be there voluntary choice whether or not to do this but what we believe is it the fact that you had a didn't think would see the current loan doesn't automatically  necessarily mean that you wouldn't be able to make the payments on a reduced a loan and the fact that you could not make payments of three thousand or thirty one hundred dollars a month shouldn't be held to say that therefore you can't make payments there of defaulting and you're right that that could be the case in in a certain circumstance but if there is somebody that has a history of continuing to default i think we should be able to allow the f h a to have that tool in the tool b take a look at that entire history whether they have it but if you say they do have it and we got an f h a now that that's where they are but it does contemplate because it's not purely redundant that you could say you know based on current loan so we said you could not that the f a k could say no based solely on the delinquency on the current loan i think that would be a mistake i think it would undercut the the proposal the notion is that if you had been delinquent on the current loan but you could get a rewrite that that that you should then be able to get in the door and show that you can make the payment or not so that's my objection to the allowing the notion that you could be denied solely on the basis of the current loan even if that is a loan even if the loan that you were applying for was substantially lower is there further discussion on the amendment if not those of fables a i suppose no no the nose  add what they want but at some point i think we will run out of amendment process simply because i don't think twenty roll calls serves well the purposes of deliberation the gentleman from texas  for those existing land holders that may be contemplating participating in the provisions of this bill and basically how that would work is is that in return for taking a current principle right on their current certificate that any deficiency that they have would be issued a ford nation true to get in the example i use is if a lender has a hundred thousand dollar loan and under the provisions of this bill they would be asked to take a fifteen percent write down assuming that the property a price for one hundred thousand dollars they're going to get eighty five thousand dollars or ninety thousand dollars actually from the new loan because they're going to get a ninety percent loan and so ten thousand dollars would be applied to our ninety thousand dollars would be applied to that one hundred thousand dollars loan so they would have a ten percent deficiency if that person also had a home equity loan of say five thousand dollars that person is going to be also asked to forego their any payment on their land and so basically you would have subordination certificates for those lenders that decided to take iraq down at this particular point in time now what happens is you move forward with this process in five years or ten years the homeowner decides to sell that house and now they have a crude equity  they would then have to go back and apply the some of the proceeds from their newfound equity and some of the economy is created by these certificate holders and pay those folks back principal only the only amounts that would be eligible to be counted on the certificates would be just principal no penalty no interest accrued up to that point other words just your your remaining unpaid balance now this does a couple of things one it's a fairness issue in that the lenders are providing equity for that borrower and they should in the four so that they can get this new loan it's more affordable to them and it provides also a protection that they're not going to go take this new equity now and put another land behind that because there's going to be these subordination for typically it's have between the first landholder or the new primary holder and the previous holders the other thing is it provides some somewhat some flexibility for those holders that have taken a discount or have written off part of that debt in that there may be a market for these certificates out there that some people may say well i think in the future that there may be these certificates are worth five or ten cents on the dollar some people may think more and so those lending institutions that took those discounts could then go out and actually market or  put out into the marketplace these certificates so i think it provides a clean vehicle for the search for this process to happen it's a fair process under this provision the only thing that this really does is in the current version of the bill there there's some kind of a participation with the federal government i really believe the fact that they were charging three percent front and one and a half percent  during the term of this loan is a premium and then with the exit premium that the federal government that should be fair compensation who should be getting some opportunity to get some of their money back is these moot lenders that a facilitator the b r to be able to participate in this program i think we have to be careful here and say that the reason that some of these people are in default is because of the lender in many cases some of the reasons that these folks are default are not necessarily the lenders fault and so i think this bring some parity and some equity to this process and i think provides an opportunity for there to be some potential recovery for the lenders that have helped facilitate this borrower getting into a lower alone about and a more affordable payment and so i would encourage my colleagues to join me in supporting this summit i believe this really makes this underlying bill a lot bill from directly opposite positions and sometimes i think maybe if i just didn't like to crossfire go forward it would be best we've been told that we're putting the government too much at risk the taxpayers are too much at risk this of course does exactly the opposite of texas says he believes that with the three percent fee that we already got enough protection for the government what the amendment does we are hoping that there will be some increase in equity when some of the homes being guaranteed are sold and again i want to be clear i think people overall you don't protect us knowing this business has never made this mistake no one should think that all the prices are going to go up into the wall going to go down we already have variances by region i mean one of the things that we've tried to get across to people i think on a bipartisan basis here is the house prices are the most graphic of the various datum in the american economy and people who talk about house we guarantee the new mortgages to the extent that we can in some cases the price will never go up but in other cases they will maybe will have been in fact here not in getting the price up but in slowing down to the excessive rate of decline and as i said people said you're trying to stop prices and declining no we are trying to control the speed i i would very much like to lose fifteen pounds but not by tomorrow so we jump times want to have some impact   the sale of this residence if there is no additional equity these subordination certificates still have no i agree they don't know value if they if there is some profit then the government gets its exit fee but it's appropriate that these folks that made this gain possible by making that sex would have some opportunity for recovery i appreciate in the gentleman i may have over spoken i'm not suggesting any creases the viability but it decreases the possibility of capture that is what we are in agreement equity should never gets that may or may not have value if they don't have value nobody's lost anything it's not a for the loss to the government i agree but if they do have value the question is should the government get all that increased value through the government share all that increase value only with the borrower which is the lender gets some of it and we if you under the current plan the federal government would get more than under the amendment and the c b o cost would go up because not that it would incur liability but it would it would move the government from receiving some of what is now going to receive and transferred to the lender we've been told by many that didn't want to see anything that was aiding those who were the wonder that you know as the gentleman from texas i know agrees whenever we talk about the hundreds we're talking about the people who bought from the lenders the lenders have long since flown the coop in many cases with money in their pockets and we are talking about the the holders giving more money to the holders would in preference to having the government benefit we're talking now about those instances where there's an increase would be a mistake are you ok my friend well and i appreciate that now i want to be clear that that chairman remembers participation in the first five years under his bill what i'm saying is gosh after the government has gotten a sufficient premium for the risk that they are taken i believe it's unfair not to let  first of all i appreciate it testing to our fiscal responsibility and the argument that we're getting the government too much is a refreshing change a lot he's being totally consistent i still believe that it is better to maximize the potential of the government than to the chairman i thank you and mr mchenry is on his way to come and hopefully will join us during the course of these remarks and thank you so much for these moments mr chair i do have serious concerns about the bill that is under consideration before our body today because it has the potential to expose the american taxpayer to an extraordinarily heavy burden three hundred billion in government backed loans and simply this is a large amount of risk that congress is asking the taxpayers to take on including the estimated ninety five percent of tax homeowners in our country who are paying their loans on time and while i understand and do not question the intentions of this bill mr chair i do understand also that hardworking americans are facing undesirable circumstances there is very real pain in our country for homeowners for builders for lenders for banks but i do believe that the bill does have serious flaws both in principle and in practice and there's also concern for the precedent that the bill sets by removing adverse consequences from the decision making process because both the lenders who made careless underwriting decisions or perhaps seemingly careless underwriting decisions and borrowers who took out loans that ultimately they could not be afford will in some manner be rewarded by a taxpayer subsidized bailout and again all backed by millions of taxpayers who are making their payments on time and working hard to do so so this is the compromise mr chair that i'm proposing today we can help to ease the burden on individuals in this difficult situation by ensuring that lenders are not dumping only their worst loans on the backs of american taxpayers and that's the laws of the borrowers absolutely will not repay by making sure that the borrowers the lenders the servicers the investors still have some skin in the game and the amendment that i'm offering today with my colleague mr mccann reason we hope will join us would require that the oversight board that is created by this bill must establish standards to reduce lenders incentives to offer mortgages that have a relatively high probability of becoming delinquent after being refined aunts and insured through the program in other words we want to improve this bill mr chair and mitigate the adverse selection and what this amendment does specifically is to specify those standards which should include a penalty on the holder or servicer of the original mortgage if the mortgage or defaults on the new f h a guaranteed mortgage during a period of time which would be established by the oversight board at the very least are meant it would ensure that the taxpayer is not forced to shoulder the burden of bailing out the most poorly underwritten and irresponsible loans this type of safeguard was recommended by federal reserve board most notably during the committee's april ninth hearing by the federal reserve board governor randall crossness governor crosser stated quote a robust defense against adverse selection the incentive of current servicers or lenders to send only their worst credits to the government insured mortgage program is necessary to protect the interest of the taxpayer and he went on to state and i quote steps to guard against adverse selection could include adding a loan seasoning requirement that is for example a period during which a new loan could be sent back to the original terms the oversight board could and should produce to avoid adverse selection without this provision lenders would no doubt cherry pick only their worst loans and ship them off to a taxpayer back never never land without a second glance and  flexibility that this that this amendment offers is great it offers great variances in our constituents deserve better and with that i would yield back mr chair  just to say that this illustrates what i said before we just had an amendment and we were told that we should give the men do a better chance to get some equity now we're going to be tougher on them and this it seems to me is an example of the  for both members entitled to their views but i don't think we can simultaneously be too tough and too easy or you'll remain in my trying to deal with california thank you very much mr chairman i very seldom rise in support allowing for the lenders to write down to eighty five percent and they benefit because they want to get these off their books homeowners benefit and they're able to get to refinance and i think that makes good sense now if we are talking about having good underwriting standards as we have you know identified in f h a reform and some other members even that's been added to the bail and the lenders and f h a everybody doing everything that they possibly can to make sure that they're making good decisions and sound judgment i don't think we we need to add to this any measure that would say but after you have done all of this if there's a default on this loan within a certain period of time then somehow we're going to have to pay the lies the lender other service or anybody else i just don't think that makes good sense  particularly when they underwriting standards are sound and that the ganter has done everything possible to make sure that they are making good judgments and making them affordable to people who certainly have demonstrated the ability to repay i don't think we need to pain allies the lenders the the services in this manner so i would ask for a no vote on this amendment i think we should stick with this balance that we're putting together where says that if you participate in this program agree to the write down and the mortgage or the person the borrower then before you the person who cooperated in this program might be subject to a penalty i think that's a very gr they can take that variable but i think it's important that the taxpayer does have the back so i understand but it does not get paid and we have like a recorded vote does not give them the right to do a penalty all those who will say i  to the amendment would add to the requirement for the eligibility of f h a mortgage insurance the following that the secretary require can require sufficient information and supporting documentation from the underlying underlying underwriting of the original loan and it further provides in the case of any default under the new f h a loan the lender will be liable for any losses from loans that don't meet the underlying standard so in other words this would empower the secretary to have the ability to request such information it doesn't it doesn't mandate that the secretary does but it would empower the secretary to make those inquiries and have the ability to opposition to this for the similar reason i think it deters people and there also is a problem here with who's on first because it says and it's the liability section of be seen to be things we could work out i would say we did ask that we see amendments in advance people have the right not to show them to us but that makes it harder for us to try and come to some agreement i say that only because one of the members only said well we wouldn't be working with the minority we made the offer several times publicly privately to work with amendments when they're not presented to us obviously we can't do that a and b we might believe that it implicates innocent people or people who are only marginally responsible they may find themselves paying all the money because someone might be a more responsible and be poor  so you get someone with marginal responsibility in it with the with the deep pockets situation but we're also talking about different individuals here we are talking about the information is in the hands of the person who gave the original mortgage there may well be a new we would expect there to be a new mortgage in this situation and the whole the person who gets the new mortgage under this libel jointly and severally with the individual who would give him the amendment be amended there's a typo on our page to line nine mortgagees should read mortgage holder and i ask unanimous consent to that effect well geminids for recorded vote those joining with him will signify we will have a recorded vote on this one is well but i will repeat again this does bite into the time to do to do more because if every single this would allow lenders to write down eighty five percent of the principal of an outstanding mortgage so the mortgage holder we pay the balance from the proceeds of a new f s a insured mortgage loan with an avenue ninety ten l t v and a five percent a loan go to f h a reserves effectively i have concerns that if the program remains structured like this lenders will be able to do well some people put it done many other words loans on the federal government the numbers i have in the scene indicate the lenders which currently go through foreclosure normally recoup around seventy percent of the original loan value and i've talked to others who give the numbers down as low as fifty four percent so this program would effectively give lenders eighty five percent of the original loan fifteen percent more than the normal foreclosure process and you might say that there's no incentive for the lender not to unload the worst of the bad loans on the f h a which could then have untold cost to the american taxpayer and most of my colleagues would agree that we're not here to bail out the big banks that are anything such as that that made  unwise or inappropriate lending decisions and i believe we were going to allow the lending institutions an ability to get out of many of the bad loans they wrote than they should but more of their own skin in the game as the saying goes so very simply my men would require the lenders to take on a little more risk of the loans going through this process and allowing the f h a to insure ninety percent of each of the loan and this will provide the f h a with some much needed relief from insuring one hundred percent of valuation of the loans submitted while ensuring that the industry has a say has a stake in the success or failure of each of the loans that the f h a is backing i believe we must ensure that lenders are unable to dump all their worst loans in the federal government forcing the banks they are potentially to pick up the tab and so this is a common sense good government amendment that would gentleman for putting it forward again straightforward this is a very important amendment it does go to the philosophical differences about what we're doing yes i do accept the fact that we are putting the government some it's not three hundred billion dollars  remote number near it but the alternative it seems to me for a recession to continue longer and deeper than we would otherwise like it and again i would note that within recent period a clearly it would have been better if we'd never been in this situation but we're in this situation and i think the ninety percent maximum again would make it much less likely that people voluntarily enter into this there was a tradeoff here that people accept income cap from fifty percent to no more than forty three percent the other thing it does is it allows for an increase up to forty eight percent only after a series of exemptions and waivers are provided by the over putting this back into the over the original bill when it's highs fifty five percent or twelve percent twelve percentage points higher and what this allows is it that it goes five percentage points higher than the forty eight these are already borrowers that are high risk and may have other payments car payments alimony payments all kinds of payments that some of payments are which are not even counted in this debt to income ratio and i think putting these borrowers back in a much higher framework which is way above the current norms in the marketplace  not good policy now the oversight board has some flexibility here to raise these up but i think we're raising them up to fifty five percent is just asking for trouble and so this just allows for a modest compared to what and we're in a very much of a compared to what situation the it is clearly not an answer i have ever been called upon to give but it does seem to me to be it does seem to to still be general the philosophical the relevant ideally no you would not want people with such a debt to income ratio in the program but what we're trying to do is to diminish foreclosures we have people who are already in difficult situations we are saying that the oversight board in the f h a working together should have the discretion to make exceptions to what would be the normal if that seems to them like me to avoid foreclosure  knowledge by doing what we're doing by doing indeed what the f h a already proposed to do a couple weeks ago we do make it likely that two things will happen a large number of people will get mortgages that they can continue to pay and  smaller number but a larger number than would otherwise have existed will default we are going to help significantly increase those who can pay and also increased by a much larger number we believe those who will default but i do think that is a the gentleman from texas is now recognized thank you mr chairman the amendment would limit the program to families with incomes that do not exceed one hundred forty percent of the median income for the area in which the housing is located the effect of this amendment clearly would be to means test the assistance provided under this new f h a program so that the funds are directed to those of low and moderate income now one can debate exactly what the appropriate figure ought to be this particular figure is the same income limitation that was included  loans funding the resale of housing in the neighborhood stabilization act sponsored by the gentle lady from california the chairman of the subcommittee so as we deal with two different bills and at the same situation again it becomes a matter of principle where should we focus where should we focus is particular assistance if you're going to have the program i believe it ought to be focused on those low  median family income without this amendment being in the underlying bill i think it is possible that all of a sudden you could have multi millionaires who might have high debt to income ratio is over thirty five who may ultimately receive the same treatment is folks a very modest wage perhaps even minimum wage it is possible to have a lot of wealth in very little income and one has to also question where where did the debt come from where did the income come from but at the end of the day somebody could be living in a multimillion dollar mansion may have had a downturn in his income  maybe he sold out his dot com idea of the year and made a guy's illian dollars but all of a sudden he said not a lot of wealth but very little income maybe even this multimillionaire bought more house than he should of but all of a sudden we have a program that can benefit that person and i think that simple fairness demands that if we're going to have this program if we listen to the debate it is all centered around people who perhaps unwittingly stumbled into mortgage products that they did not know the contents thereof that they did not understand the transactions well i'm not sure then that the multi millionaire is the guy who would necessarily be qualifying for that kind of poster child of this legislation so again on the grants and loans portion of this package we have limited the beneficiaries to one hundred  forty percent of median income i think this is the same ought to be true for the f h a program as well so if we're going to sit here and for those who have decried any bailout of wall street or talk about the inequality of income in america it's a very simple amendment aimed at making sure that the benefits of the program are targeted to low in median income people and i would urge its adoption with that mr chairman with  the numbers would include approximately fifty two point two million families nationwide i'm a citizen of the city of dallas it would include three hundred seventy two thousand families residing in dallas making less than sixty nine thousand five hundred dollars seventy one thousand five hundred families in denver making less than seventy thousand two hundred thirty four dollars approximately eighty seven thousand five hundred families in boston making less than seventy four thousand five hundred  one hundred eighty thousand five hundred families in new york city making less than ninety nine thousand two hundred fourteen dollars at least one hundred eighteen thousand five hundred families in atlanta making less than one hundred six thousand four hundred thirty dollars unfortunately i do not seem to have a metric for a metropolitan area in your state but hopefully that gives you some sense of the numbers and magnitude of which we discussed and with that mr chairman i recognize myself for  but the loan limits we have raised in fact are two hundred twenty five percent of the median house price or one hundred seventy five percent of the fannie and freddie price were jabbers lower so in no case can a home that is worth more than one hundred twenty five percent of the median income of the median home price in that region be eligible now obviously you could there's not an absolute link between income and homes because if there was we would have a sub prime crisis of people borrowed more than they could but there was that limit so the multi millionaire i think is unlikely to be going in a home it's only worth one hundred twenty five percent of the median unless it's some particularly eccentric one or a few in my district  ethnic traits that lead them to be some of the old online people are very very frugal secondly remember that this is optional with the lend nobody gets into this program until not the lender correct myself until the holder of the loan of the service or acting on behalf of the lender says well this person can't afford to do it i mean in fact they could foreclose they can decline to give this meet so if the servicer finds that the individual is in fact very wealthy and does not deserve the relief he or she can turn it down there is also one so i disconnect between the gentleman's explanation and the amendment because he said well you could have somebody who's very wealthy doesn't have much income well they'd be they wouldn't be hurt by this because this talks about income so if in fact you had somebody with a lot of wealth who went to a year or so without income they would not be excluded by this by this amendment what does exclude are the two things first of all the one hundred twenty five percent of median house price now that's in the bill pending it may go lower i hope to hold that but remember that that's been in contention the and again the purpose of this is not so much individual welfare as to try and help the country deal with an economic problem it is our hope that this will diminish the number of foreclosures not primarily to give belie the gentleman is recognized by the chairman this man would require the mortgage or provide certification to the originator of the mortgage that such residence covered by the mortgage being insured is the only residence in which the mortgage or has any present ownership interest this is directed towards vacation homes second homes and things of that sort the fact is that many home purchases are not for primary residence combined total vacation vestment home sales accounted for thirty three percent of all existing new home sales however often times borrowers were less will list a vacation home or investment property as a primary residence for tax purposes and other purposes my men would ensure that only those borrowers who are in a position in which they are losing their actual home not their vacation place or an investment gone bad will be able to participate this is directed so that the legislation actually does assist those homeowners that are truly losing their actual home i don't think we want to be in the position nor do i think the chairman legislation is to bailouts individuals who have a second or third how many ever homes and they made a bad purchase on one and they want to get out from under it so i think this would help clarify  the overall and intent of the legislation i think is a very commonsense simple amendment directed at an unintended consequence of the legislation and i yield back recognize myself to express my support for the amendment and to just say the dominant one area where i would hope we could work between now in the form that is this is called in my tenure at my initial reaction was yes this is what we want to do and we want to accept it there may be cases where someone has  herited a partial interest in some of the residents in a manner that makes it difficult for that interview to any unaided but they don't really use it much i'm hoping we might be able to work out something on the floor that would protect people in those situations you know you get inherited the general we did see this remember before you would repeat this is why it's helpful if we see these before my initial reaction was why not the answer was very exceptional situation we would give the oversight board the authority to be promulgated moules where the somebody would get the right to do that or perhaps less than a less than a majority owner some percentage like you know we do know a situation where people inherit a particularly interest in a situation in which you just you could say well make them sell it but in some cases you can't sell your piece if your and may i just humbly make another suggestion as you go forward in the working process let me just give you another scenario and the other scenarios that's what you know right now in the in the last year and a half they said that some people have used their homes basically as a t m s and go and get equity loans on their houses so they can go out and get vacations or boats or basically get one hundred percent loan off against their house to go and buy that house down the shore now would your certification address that situation or could be expanded to say that i did not take any equity out of this house so that i could go and buy one of my vacation the gentleman yield i don't think you need that i think even with whether they did or didn't take equity out borrowed under there's no job you won't another home and ends in a somewhat broadway so let's say you have to practice let's say you have twenty properties you would not be eligible if one of these goes into default you would not be able to get the tax payers  chairman i find myself in a bit of a parliamentary parliament terrilyn difficult situation i have a couple of amendments that i wish to offer to the underlying language page twenty seven  twenty through page twenty eight lines twenty one but we've already exhausted to design a standard to second degree amendments one of my amendments would strike that sub paragraph but i'm not as to the strike in that sub paragraph if the adoption of one of the previous second degree amendments occurs so what would it with you assist me through this if i'm correct the gentleman is talking about the we would accept that as as in a member what's the second one of the problems i have with that mr chairman if i may is that if my amendment to second degree amendment to mr watts amendment that's previously that's that's resting on the table waiting for about if that amendment were adopted then i wouldn't offer my striking amendment well let me offer this to the gentleman at some point the amendment process will end and we might even have a vote to that him but i would say that i would  gentleman doesn't want to offer this unless his secondary amendment is defeated is that correct that that would be correct let me ask you nance into this point that whatever parliamentary situation we are in if the gentleman secondary amendment is defeated we would at that point halt the roll call process to allow the gentleman to offer this amendment and get a vote on that subject you are discussing it now in other words we don't want to have too much of a break let me explain why we ask members to come out of all calls they have other things so we could debate the amendment now i know this is irregular but it does seem to be will accommodate all the interest we could debate it now and amendment is very simple the problematic one of the problematic sections of this bill and we talked about it extensively last week and again today is on page twenty seven paragraph b lines twenty through page twenty eight line twenty one this is the area that this is the section of the bill that in essence earmarks thirty million dollars and with the adoption of amendment previously presented would be thirty five million dollars to be used for counseling of intermediaries counseling intermediaries and for individuals to proceed with the use of federal taxpayer money  potentially for significant litigation my contention and then those of many others is that that's that in what our constituents believe would be an appropriate prioritization of the use of their hard earned taxpayer money this would simply strike that that entire section if as we have talked about if the language in an amendment that i previously offered that would say that not one of those monies could be used for for use in litigation if that amendment were not adopted so again i think it's a this is the area a bill that is a significant contention it's an area that have that many of us have great concerns about and i think this would allow those concerns to to ask my friend a question and i will yield to him is it your belief that in so doing you will remove all funds that have been made available for the counseling legal counseling is that the second page have two hundred million mile time for just a moment and line twenty the amount of funds made available online twenty would be removed is that correct and that is correct that's a portion of the two hundred million but the two hundred million obviously up on line six would remain and on line fourteen talks about providing those funds for counseling and also reclaiming my time momentarily because i'd like for you to respond we would also in so doing prevent those persons who are tenants from receiving legal services in forcible entering detainers forcibly tain is commonly known as eviction lawsuits is that correct that would be pursuant to page twenty eight and we over on lines seven is that correct i think the answer to that is that it would explicitly remove it but not implicitly remove it i don't think there's anything out anything in the remainder of the bill that would preclude the use those moneys for individuals in a tenancy situation i mean my time if i may i would have to  oppose the amendment because we have received indications from the organizations that are currently counseling persons that this type of assistance is needed and i can tell you from some personal experiences that i've had we've heard persons talk about their own personal experiences a day that we do have tenants who are caught up in this eviction in this foreclosure process many of these are persons who actually have paid rent and they find themselves having to leave schools that they have their children and they have jobs that are possibly nearby and they are not persons that have cars or a mode of transportation other than one that may be available because of the area that they are located in and this would have a an impact on them in an adverse way i think this kind of counseling is really something that is needed is not something that we speculate about the imperial evidence supports the notion that this type of counseling is needed for persons who can be that who are tenants now aside from the tenets of the actual property owners that are being foreclosed on they too  will need legal counseling from time to time to benefit them some of them unjustly foreclosed on and there is a need for legal assistance so i would oppose the the amendment for this reason and would welcome your response and i appreciate that one i don't think that the rest of the bill precludes the use of those monies and i would hope that the gentleman would support my previous amendment which a lot would allow explicitly for the  legal counseling but would make it so that those monies these monies don't end up moving to increase the significant amount of litigation in the in the courts my recollection of your previous reclaiming my time your previous amendment was that it had the bro language and i find that this language would also put us in a similar circumstance in terms of the legal aspect of it something that is needed so i would have to oppose the amendment is there further discussion i would recognize myself just to say the st me to be similar to the earlier amendment the gentleman has indicated that by saying that he wouldn't that so i propose and i guess to combine two maxims an apple a day will not keep a doctor away if you can get two bites at it  mr chair you know i try not to get into the ideological dialogue too much because i understand it doesn't often help illuminate the issues very well but i do want to say a word in favor of our system of civil redress in america we do talk a lot about lawyers and trial lawyers and always cast it in a negative light but i mean you know first of all this crisis we're in did involve a lot of fraud misrepresentation serious problems like that and if people have legal cognize will legal interests they should be able to pursue them i don't think we ought to try to throw barriers in the way also you know there are a number of safeguards to make sure that unwanted litigation excessive litigation does not occur and so i just want to make sure that this is proceeding didn't go off today haven't there been a lot of fairly i think unfair criticism of the civil redress system in america which is a hallmark of our sister constitutional right to a trial without saying and something in favor of our of the system that we have and i also want to say that you know the provision that the amendment points to directly really doesn't doesn't necessarily speak to litigation it speaks to counseling and if people need legal counseling that may in fact avoid a matter being tried and being in litigation so again i rise in opposition but i just want to make sure that somebody speaks up on behalf of our system of civil redress and that the legal profession is honorable in my view sure and i appreciate those comments and i would just remind my friend that that this portion if it were not adopted wouldn't change anything about our legal system i don't know that there's anybody out there thinks we have too few lawsuits where there are a lot of resources in the community to be able to have access to the courts or the legal services corporation or local assistance in the in the community this this amendment that this bill than a line bill would simply expand the use of federal taxpayer money to i would suggest move people much more rapidly to the reclaim my time i do think that there are too few lawsuits in certain aspects of our society i think when you're talking about poor people being taken advantage of  as has happened in that with this mortgage crisis oftentimes they don't have any access to justice oftentimes they don't have any access to legal counsel and so the fact is you know i think it makes sense to try to keep a lid on unwarranted litigation nuisance lawsuits i'm with you there was that with it and we're going to be a lot more more tied will you thank you a question that probably requires no response but would you be amenable to having the persons who are the holders of the mortgage proceed without counsel and without filing a lawsuit i don't believe i've offered that  amendment no no i understand you have it my question is however and this is they help with the philosophical divide the reason the tenant will have a lawyer is because the tenant has be sued that is a lawsuit atena may also have a lawyer for tenet is doing the suing agreed but my question to you is would you would you would you support the notion that the person who is suing the tenets the persons who are for closing not have lawyers and not to file lawsuits to do this and the bank foreclosed of well the holder of the note foreclose without the benefit of a lawyer and that's a fallacious question because it doesn't get to the issue that we're talking about here my the tax payers in the six district of georgia believe that they pay their hard earned taxpayer money for certain priorities in the federal government and they would suggest i believe or i would suggest on their behalf that the use of an extra another thirty five million dollars to be shunted to attorneys to bring about greater number of cases in our courts is not the best use of their hard earned taxpayer money that's all i'm suggesting i defendant often in legal actions have a hard time bringing suit and in this situation i know we have the legal services corporation but the legal services corporation never contemplated in the resort the resources made available to legal service go break and never contemplated this current crisis we are in a temporary situation we hope in which there was a demand for legal services beyond that now the government says the constituents in his district and before that not surprisingly to constituents and my district quite obviously have different views of what is appropriate for the federal government that is do we can all talk about this but it is i think without question that those resources that are available to indigent people without the money to hire lawyers clearly didn't contemplate this flood of potential litigation and i do stress again that in many cases for koger is a legal proceeding we are not talking necessarily about initiating litigation but giving the defendants in that mitigation some equal chance because i do not believe there are now in the legal services system or anywhere else  to provide legal defense for people shoot either in foreclosure or for debts that we now know in many cases they didn't really know so for that reason all the amenities defeated the question is now on the amendment all those in following for such counseling for veterans recently returning from active duty in the armed forces and generally recognized thank mr chairman this amendment again gets to that problematic section of the bill i believe and hopefully is one that would around which all members of the committee might rally all of us understand and appreciate that there are real concerns and real challenges out there in the in the housing arena that there are real challenges and real concerns and real issues that individuals have who valiantly continued to serve our nation and when they come home as veterans or when they're when they're serving it is some of them who are falling into the difficulty of being able to stay in their home consequently this amendment would simply say that the earmark funds the thirty five million dollars that if the previous amendment is adopted  would be for counseling of for veterans recently returning from active duty in the armed forces and given the context of the bail and given the context of the paragraph it would be obviously for those having challenges with  their mortgages and so i think hopefully what this would do would put be put to put aside the the the difficult area the area where my friends on the other side believe that we ought to be move and tens of millions of dollars to assist lawyers to pad their pockets to get to court and instead stand up for our veterans and say we we want to make certain that those individuals who have served us so  and bravely are the ones that are the beneficiaries i think that is a a priority that that constituents certainly in my district and i hope across this nation and their representatives will be able to support sarge adoption amendment  myself to say first of all the gentleman just referenced to lawyers who want to pad their pockets to get to court is precisely what the gentlemen it's always talk about i am also proud that we were nation of laws and that we have a legal system that accurate characterization i believe of many ways it is a very unfair characterization of those who do legal services people may disagree with what they do but to denigrate people who graduate from law school often in positions where they could make large amounts of money in private practice who choose instead to go into this kind of work as people trying to pad their pockets is unfair having said that i'm going to support the amendment because i do think we should help the veterans my own view is that the way to help the veterans however is not to put them into a pot with other people as a gentleman does but in fact to get some more money for veterans so i will support this man to this point i've spoken to general motors and i don't know about to yield to him and i think by the time we get to the  floor the gentleman will get what he works for and we will make sure that we have adequate money for the veterans probably increasing the total amount or yield to the general carolina appreciate jungmann yelling i want to make sure that he's not agreeing to do it in substitution for was there i support adding additional funds for counseling for veterans even though under the current bill they can participate in the counseling money this authorized don't pay only page twenty seven line six they can participate in the legal money this authorized on page twenty seven line twenty but if the if the gentleman in to have a separate designation for counseling for veterans in addition to those things i would be fully supportive of that but not in substitution in the way the amendment is drawn now striking a line twenty two on page twenty seven and all that follows through page twenty eight line twenty one takes from the veterans who could put dissipate in the use of the legal services if they needed to them if they needed them and gives back to them counseling which they may or may not need also so if we could add it as an additional provision in the in the bill i'd amendment we worked out a procedure this is a similar procedure but the gentleman did not offer a secondary remember and i just checked with the parliamentarian the amendment that spending and i have to say the gentleman we accommodated him on the previous amendment in a way to respond with  mr dembski is volunteering to interpret is to knock out the part that strikes the existing language and instead simply adds the authorization for veterans is don't know it's going to suggested if it's adopted when we get to the floor i think it would be appropriate to provide some more money but that is what  it's important that we not proceed in haste this is an amendment that that was my amendment was offered sincerely i think it's an appropriate amendment it what it does is outline clearly or define clearly the prioritization of this congress whether the priority is for legal services legal thirty five million dollars or thirty million or forty man whatever the majority decides upon in their previous amendments whether we ought to increase the civil litigation the number of lawsuits in this nation or whether as a as a higher priority we ought to have counseling for veterans returning from active duty that's an appropriate question whether or not the chairman's amendment to my amendment accomplishes that same and that is to determine what the priority of this committee and what this congress ought to be i'm not certain it does this question and i'm not sure that the bill excluded counsel for veterans but i would yield to the chairman i thank the gentleman which clearly doesn't let me say first of all i will repeat had we seen this amendment earlier as we had several times the general george earlier today said oh the majority doesn't want to work with the minority quite to the contrary i urge several times publicly this morning that people share amended with us if we had seen the amendment earlier we would have done this he said we couldn't legislate haste well members who want to avoid a third in my judgment offer amendments that no one has been able to see and talk about we are available to discuss them secondly the amendment clearly does what i said it would do it strikes the part of the gentleman's amendment that would who are out the counseling we have already cheval votes on that pending no one is being denied a chance to vote on that the gentleman offered a member to strike the civil litigation part he then a few minutes ago said he was in a punishment or difficulty we extended ourselves to work that out and put it in a situation where you get another vote on this he then she said he wanted to substitute veterans counseling for the legal counseling the amendment that i offered says no we won't substitute veterans counseling for the legal counseling will do both that's very clear cut and so i think frankly the gentleman may be disappointed that veterans now cannot be used to deny legal counseling but we will provide both will always by colleagues from copy doesn't help too much but could you read the text of this again so i can understand yes it would the amendment instead of the gentleman george's amendment it would go to page twenty going to twenty one and add the following it would say it require the bar receive a simple and clear explanation of the new loan that he or she is being right refinanced into this is a disclosure amendment that mr green from texas mr  co sponsored on the mortgage bill we produced out of this committee a few months ago this is what there is a real need for in the financial marketplace is accurate disclosure for key loan terms and this is a major decision that bars are making and there's a real need for the simple document that breaks down in layman's terms and makes it clear this is what you should expect by the refinancing under this new loan similar to the disclosure amendment i referred to earlier it would give clear and simple assessments of the new loan obligations as this bill is currently written it seems that most of the work out for refinancing into an f h a insured loan is being done behind the scenes and without much input from the bar or i think it's also reasonable to assume that part of the reason why the borrower is in a position of needing to refinance and refinancing out of fear foreclosure is because here she didn't have a full understanding or explanation as to the financial responsibility he or she was  taking when financing the original loans my memet would insure the bar understand the most important aspects of the new line including the amount of any prepayment penalty to be charged if the mortgage is paid in full before the final maturity date of the mortgage including the percentages of a net proceeds to be received by the federal government in addition my memet would also disclose the bar the amount of of the exit premium that a bar or must pay when he or she sells their loan whether it's six years from the start of the loan or twenty six years from the start of their loan it would certainly be force of fortune if we didn't take this opportunity to better inform borrowers as their new loan responsibilities it's a very simple straightforward disclosure amendment very much in keeping with what was actually passed out of this committee and h r thirty nine fifteen i could go over this specific provisions and i'd be happy all the  again we seem is now and i think it is reasonable amendment some questions may be raised about the signature and whether it's whether the this is a problem read gentleman is recognized for five minutes thank you mr chairman this is yet another minute designed to protect the ninety five percent of americans who rent their homes and their homes outright or pay their mortgages on time the admin that specifically would strike the open ended section of the bill that allows the oversight board in the future to lower the debt to income standard below thirty five essentially as it fit the base bill now as i read it states that the oversight board may decrease the d t i level if it is quote necessary and appropriate to make eligible for the program those mortgage or cannot reasonably afford their existing mortgage loan or loans unquote but who otherwise would qualify for the new program under the bill and so again mr chairman i have a situation where i suppose the only practical cap then is whether or not we run out of borrowers or whether or not we run out of three hundred billion dollars of loan insurance authorization cap i think there should be greater selective it again on who the recipients are of this tax payer benefit and we will look at debt to income ratio as we've got to remember maybe somebody somebody has a low income ratio because maybe maybe they didn't show up for work and they got fired maybe they have a lot of debt because they went out and bought a lexus when they should have bought a ford maybe they're in debt because they took a vacation to vegas when they should have gone somewhere else maybe they bought a home that they could not afford there can be a number of reasons but already we seem to be pressing the limits on those who are a good credit risk those who can reasonably be expected to even stay in the home under the rewritten mortgage provisions that would be authorized under this law and several people i believe have referred to this really is a mortgage crisis that demands an emergency response but if so why do we want to leave an open opportunity for the oversight board to go beyond what appears to be the original intent in the bill i don't think this provides any certainty to the servicers other mortgage holders about what precisely is the scope of this new program and i think in  live to the market taking more time to actually recover that it would recover at a slower pace due to the uncertainty of who ultimately may qualify under the program i think it increases moral hazard in that some bars may be making some difficult choices on how to meet their mortgage obligations and may look again for ways to shift their obligations to  so i think that taxpayers frankly would be better suited if the oversight board was moving in the opposite direction and we hear a lot of voices from those who again have been victims in this process but i think we also need to hear from the voices of those who ultimately are called upon to pay the bill and so not unlike other members i read my mail from time to time as we all should and let me if i could just quote from a couple of letters i've received from constituents in the fifth district in texas i heard from the huff family and been we learned in the fifth district quote i am opposed to any attempt by government to bail out private citizens who have defaulted on their mortgage i am not a rich man i live in a modest three bedroom home my driveway is dirt and my tractor is worth more than either my or my wife's automobile but i always have been careful to not borrow more than i knew i could repay and i just bought a new home and i could have gotten a bigger home i could have bought bigger according to the lenders and builders but i didn't and so i just think it's important that we hear the voices of people like the family in been wheeler taxes potentially make this an open ended program only limited by the running out of bars or reaching a three hundred billion dollar loan insurance authorization cap to this is new territory for everyone and no one can be sure about what works or doesn't work and the german correctly said what i think should be guiding us here is not certainty about the number but the bound to risk you want to take and whether bashar and i do think in this case the gentleman has a reasonable point that does not mean that i think there never would be a time when we might not want to change that but i think it would rise to the significance of a legislative change not something that should be this and so but it may be that something like this would be better dealt with if this goes into effect six months later when we've had some more experience i think there's something to be said for that and we'll continue to see something like this i think could be done in that fashion to read i think the amendment will help the department of justice crackdown on mortgage fraud our men would give the f b i and the department of justice an additional thirty two million dollars to hire more investigators and prosecutors to go after those who  perpetrate mortgage fraud often overlooked is the prominent role that mortgage fraud played in undermining our housing market especially in major cities last year alone mortgage fraud increased by forty two percent since two thousand is grown an astonishing twelve hundred percent we need to tackle the fraud that is at the root of many of our sub prime or predatory loan problems and is the subject of so many headline grabbing stories across the country chicago we've had many problems with mortgage flipping and inflated appraisals our papers are filled with stories about low income elderly and even mentally disabled homeowners who have lost their homes as to these schemes again bangerz discovered it was easier to steal money mortgage money than to sell drugs and rent been our problem and it also it authorizes money to the f b i and in several cases to the department of justice to the prosecutors it's a very important amendment we are able to  consider it thanks to the hearing the gentleman from illinois was very gracious in holding off offering it until we could be sure that we would have the support that would not trigger  our line of work are false dichotomies people who say don't do x do thirteen instead and in fact the answer is you often can do both and this very properly says yes prosecuting for what is a very high priority for us and that has been for there been floored by a lot of parties and that should be prosecuted this gives them both the investigatory authority to do it and the prosecutorial authority there is an f b i task force here it specifically gives them recognized in five minutes i don't need five minutes i'm just amazed at the parallels here between this amendment and what we've been talking about all day actually for two days now because  i'm cognisant i'm fully supportive of the amendment but i'm cognizant that we are hiring thirty additional agents which would be the equivalent of counselors or investigators but ultimately for them to way they would go to court actually yes the lawyers who actually go to court and what would they be pitting their pockets with those that are reasonable probably would get some tissue paper in their pocket like the low income people lawyers do all the way counselors can't go all the way to resolve these things we need other people lawyers place for roles sometimes in the process thank you general would you know then i would notice it isn't just to prosecutors as she's aware but two additional dedicated prosecutors and by dedicated here they don't mean people who work hard although they do that but who work only on this so this is a recognition of the importance of lawyers amendment strike line three on page one and all that follows two page three line two and   as we here in congress have a requirement to do and that is to prioritize where hard earned tax payer money ought to go it is my intention to prioritize that the thirty thirty five or forty million dollars whatever this committee deems to be appropriate at the end of this that it go to for counseling for veterans recently returning from active duty in the armed forces who are having challenges in their housing situation mortgages as opposed to the item selected in some paragraph be in the original text that was amended or will be amended by the gentleman from north carolina  and i know it's that it's that it's not comfortable to make that choice but our constituents choose every single day every single day between finite resources some of my friends the other side think that that the resources are on ending coming to the federal government as chairman i'm here to tell you that they're not on ending and that citizens all across this nation believe that believe currently that they are taxed too much but too much of their money is used by the federal government and that as we increase the taxes to the american people what we do is ultimately and have i believe decrease the economic vitality of our nation and the more we do  so the greater we risk opportunities for all in all sectors of society so this is this is i think a very clear proposal it is a pro proposal that sets up if we're going to spend the money where would that priority be and i would say jest mr chairman that that that priority ought be with those men and women who have valiantly served and have bravely fought to defend our liberty and our freedom and hopefully defending a congress that will recognize that it ought to decrease the amount of spending at the federal level and not increase the amount of spending at the federal level and so i urge adoption of the amendment and i yield back the balance i rec for five minutes just to say that i didn't know the gentleman's criticism of the tax policy in acted by the bush administration and the republican congress he said we have taxed too much we are of course now moving on to tax laws that were adopted by president bush and the republican congress i don't like the monkey do although i think from a different perspective the down would you argue but let me say that to i believe that i'm not going to ask people to vote against a veteran's i the clerk will designate the substitute amendment substitute for the want amendment it will come last after any secondary amendments are adopted we will be voting on the promo to remember to the  amendments when that amendment process is completed we will then vote on the substitute what the substitute does is what i sought to do before before the gentleman withdrew his amendment and it says that we will have the promoter remember we will have the underlying remembered for legal services we will have the promo to remember and then it adds on page three and see for such counseling for veterans recently returning from active duty in the armed forces now several of us think that we can afford some more money to pay for this made on so that we don't have the veterans taking a secondary or having a fight for the money but it adds veterans without knocking out counseling legal counseling as the gentleman from north carolina just noted we just a added a new authorization this is an authorization for i think a total of thirty two million dollars to didn't mean to do that that was a mistake in the you know i take it back it is you know if you look at the no no i meant i meant we had forty eight we had point what do you know i mean since we were going to do something for veterans i thought maybe we well five million may not be  comfortable or interested in making difficult decisions that's what we are supposed to do we're not supposed to come here i don't believe to congress and say everything can be afforded we can spend to to your heart's content no we ought not have thirty five million we have forty million without eighty million why not honored twenty million that's the kind of thinking that gets us the largest tax increase in the history of the nation seven hundred billion dollars it's been proposed by the majority party and adopted in their budget so it's clear that it is causing significant consternation i understand and i appreciate that but our constituents and here to make difficult decisions what i am proposing is indeed a difficult decision do you support the thirty five million dollars for attorneys without qualification or do you support thirty five million dollars for providing counseling for veterans that's a difficult decision that's a difficult question but mr chairman i would hope that that this committee would allow members to speak on what i believe to be a very important priority question for our nation to point out that the parliamentary difficulty we've gotten into is because we have strayed from usual parliamentary procedure a parliamentary procedure is in place to allow for an orderly process of things and not to confound and complicate the issue we are here if i may mr chairman we are here because the committee has been lax in providing parliamentary procedure to be put in place and i appreciate the  was the accommodation of the committee to allow us to move forward without dealing with second or to second degree amendments yes timely fashion that that was the laxity that the gentleman asked for he said he had some question one that you just got handed here it is continue to read the amendment mr chairman if i know i have order what you point to go to the amendment that is being passed that now is not the m m and i am proposing well the gentleman and then mr chairman i object because the rules clearly at the desk we don't have copied yet is it excuse me i mean i'm directing because you don't have copies yet now we will hold off while copies are being circulated are there further amendments if not we will simply wait until we get the copies of the corrected version of the amendment distributed mr i have another man at the desk if you'd like amendment page twenty seven line six strike two hundred million dollars and insert two hundred ten million dollars strike line twenty on page twenty seven in all that follows through page twenty eight line twenty one and insert the following be thirty five million dollars of the funds made available pursuant to this paragraph shall be used for such counseling for veterans recently returning from active duty in the armed forces generally recognized for five minutes so i reserve the point of order mr jim yes thank you mr chairman again i understand that that members don't want to make a statement regarding where they believe we ought to prioritize our spending in this area i appreciate that it is as sincere and  valid a point i believe on from this member to say that it is imperative that we make decisions to prioritize spending at the federal level this amendment simply says that we ought to use that thirty five if we're going to spend thirty five million dollars that's what's going to be adopted that that thirty five million ought to be utilized for counseling for veterans who are returning home and having challenges in the mortgage market our constituents at home make decisions every single day about whether or not they're able to afford a new house a new car whether they're able to afford certain services whether they're able to afford other items to assist them in their work activities or their community activities they expect us to come here and speak forcefully on their behalf to prioritize where federal spending ought to be they don't expect us to i don't think they come here expect us to come here and say regardless of the cost we will continue to spend and spend and spend and spend and spend that's the kind of thinking that gets us to adopt budgets as a house put forward by the majority party that have included in it the largest tax increase in the history of our nation it's already in the budget seven hundred billion dollars my constituents when i go home every weekend and talk to them i suspect are saying the same kinds of things that they're saying to other members i think probably a majority of members if given the opportunity to freely vote and what they're saying is that you must we must as a nation prioritize appropriately and restrain the amount of spending so i think it's very clear again that that i understand the majority don't wan prioritize in this area and i appreciate that but i think it's very clear that this is a question this is an issue that must be addressed and maybe it's just a start maybe it's just a start of an honest discussion and debate about where the prioritization of our federal spending ought to be i would hope that the chairman the majority party would allow a vote on this  put forth sincerely and respectfully and i would encourage my colleagues to support it and you know back the balance of my time i reckon just the five minutes to show you the suggestion that anybody is not being allowed to vote is  ridiculous the fact is that we will have a large number of all calls here amendments have been freely offered a number from both sides have been adopted and there will be a vote on this i will say this about the veterans i think there are important i think they are s iently important so that they ought to be considered on their own merits and not in part to deny legal assistance to people facing foreclosure in difficult circumstances who might not be able otherwise to defend themselves that's what the gentleman seems to me to be objecting to that the effort was and i don't remember the veterans coming up frankly until it appeared that it might be a useful way to block funding for people some of who what we are saying is yes some of us believe that helping veterans and helping people in legal trouble who are defendants in this and who have victims of abuses by companies that we've seen documented that both of those are legitimate we should note by the way that veterans who are fully eligible for the other funding so this is set aside for the veterans but as to priorities i am in favor of priorities to me the money that is being i don't like the fact that we were voting money to go into a spaceship to mars i'm glad we now finally said no to that instead of doing some of the things that are important here yes it's very important to do priorities but the notion that we take people in need and set them against each other at very low levels while we lavish spending elsewhere frankly i don't know how members involved the agricultural bill i don't think it's going to be an example of of tough prioritizing i don't know that that tax break the horse breeders would be high on most people's list of priorities who aren't in the worst business that's probably to be in the bill but yeah we are in favor both of providing counseling for veterans and providing help people well we compete on whose behalf legal assistance may be necessary and if members don't think that the gentleman said we don't have a chance to vote that here they do they i believe that the gentleman's amendment on veterans will be adopted it was adopted we will then have a roll call on whether or not to add counseling those who don't want to add counseling can vote no  i would have thought the gentleman would have understood that people who think that helping veterans excludes providing legal assistance could vote no on this substitute to be a member of the general of north carolina i don't know who that's depriving we are depriving people of a chance to use the veterans politically not at their request to block regal assistance to others for elderly women i don't know many veterans who think old women should be able to get a lawyer to help them if they're being a mortgage company and get the money back we are saying no you can't use the one for the other but if you want to vote for the veterans we've already done that if you then want to vote against adding in the money for counseling which we have then you're free to vote that way so you can do what priorities you want you simply can't hide behind the veterans to do it so i hope that the secondary amendment of the joe is defeated he already has i will say two other amendments pending that would do that and we did not interfere with those that young would judge it doesn't want money being spent for legal assistance he thinks boy as a people pad their pockets many of us think that while you play a very important role in this country when we defend ourselves as a country of laws and we're proud about justice system and we put in more money for prosecutors and we want more money for people to be able to defend those who are being attacked there will now be three can't just about no one that so i do not know what opportunity the gentleman  said representable sort of what he can do about what happened my neighborhood he's a he's returning veteran he said look man they've got to foreclose here they've got to foreclose they're what do you do about my neighborhood now if the spirit behind this amendment gets adopted i'll say well i can't do anything i can help you but i can't help any of that and i think that would be something that would make that very say you know back in the gym and you know yes i just want to formally withdraw my  having done it in an orderly fashion still would not make it inappropriate so i'm withdrawing my point of order but not my opposition we can do both of these assure him be losing any sleep about this tonight we can do counseling we can do the same thing that we did with  the f b i provide some legal assistance at the end of their process and we can do veterans if the gentleman wants to do that i don't know why and i can vote on it four times this day talking about the same issue waving it in and out with all of these amendments and points of order and whatever i'm an attorney i was a real estate attorney i think tourney's are very important in the in this in this field in fact we've had court cases that decided that in illinois that it was important and that a lawyer should be present at a closing and now saying that i think that i have some concerns with the language and just the open ended of of attorneys being here with the what is civil litigation things i would hope and i know that this is going to pass probably that this really could take another look before we go to the floor and  put find some accommodation for what the side of the aisle thinks you know why they are so concerned with is why i keep coming up and coming up because you're just not satisfied with the way that it's written and i don't think they're going to the language that's going to satisfy mr price because he disagrees with the notion that we should be doing this at all and whatever language i give him he's not going to be satisfied with it have a number of amendment votes on the want to moment members who who who will undoubtedly be kicking themselves at having missed this debate will get a primmer on how do and how the votes will be put and at five although there are going to be a couple of for about so we will start the vote either at five o'clock or immediately after the four votes because they will not be the last for a vote if we started five and there was subsequent what was will do some of them now and i think some of them tomorrow morning but we'll see i would goes with this will be mutually agreed upon but do we have idea how many locals are now pending fifteen fifteen for i think we'll be able to we may be able to do them all now but in five minutes i can be chairman and you're absolutely right this will not be a new language this is the pay go provision that that i and others have attempted to add to many authorising pieces of legislation and i understand there are concerns about adding it to authorizing legislation but i think that it it speaks to again that concern that our constituents have at home and that is that we ought to be be absolutely certain that we're prioritize incorrectly with the spending their hard earned taxpayer money and they were also being true to what we say although there is no score yet as i understand it from c b s this will will clearly cost at least three hundred billion dollars or guesses are about three hundred billion dollars worth of loans well over a default after being insured by the american taxpayer if they do that and then well i guess we could spend up to that that amount  objections from my friends on the other side often times to to this type of amendment oftentimes are that well paygo is part of the rules already of the house and they're utilized all the time and so there's no reason there's no reason  the paygo provision consequently making it so that that that fiscal responsibility isn't it here to in spite of protestations to the contrary they were specifically there's been a number of times these i think are the most december nineteenth two thousand and seven was waived and on the economic stimulus act hundred fifty two billion dollars pay go was way now let me and i know it gets tiresome but let me remind my friends and an ybody who might be listening what paygo is it means that you ought not spend this money unless there are identified sources to pay for it so that we don't increase the deficit and pay again more of  harder and taxpayer money trying to prioritize trying to become that fiscally responsible government that that our constituents demand that we be and that many folks in congress stipulate that they are however their actions sometimes belie their statements so i would hope that that on this occasion this paygo amendment would be adopted i think it makes all eminent sense especially in a in a bill that  into them at the insistence of the president with regard to the a m t and the stimulus both of which the president strongly supported it was among others a president who thought we should not pay go speaker pelosi tried very hard to do pay go  in those two instances i'm not i don't recall the first one but two thousand and seven she was overruled by a coalition of the senate and the president and it is her intention to apply paygo here but here's the key difference it's not whether or not we have paygo this says except to the extent that this act or such amendments provide for offsetting decreases in spending the problem i have is not paygo but requiring paygo to be internal to this act if we decide that the sub prime crisis is of sufficient impact that we want to take some money from other places set priorities and you get to offset this we can't do it at this amendment is adopted it doesn't mean that you don't have paygo the pay goal is in effect with or without this and by the way for to question of the senate now is overriding us and we could lose out on that the senate the president we would out here the question is whether or not pay go to be within the same act or whether we would be able to look at other places now i will tell you that we've already been working on this and we do expect to be able to come up with some paygo in particular and this from some things we can make some money elsewhere in the f h a bill in the overall package you know your thing i would say is the three hundred billion figure is of course the total amount of bonds of mortgages that can be insured there was zero change that any ship stanch a percentage of that will fail three hundred billion would be at risk immediately after getting a guarantee people whatever and what so much but we will begin with those votes because i think it's important that members be relatively fresh when they deal with that sequence if there are questions a parliamentarian will be available we are now  cooperated and i think we have done a fair amount of business a number remember and were adopted from both sides and we have some legitimate issues to be resolved we are in recess i don't see the five p m or immediately at the conclusion of the last well cool