```

[Congressional Record Volume 154, Number 185 (Wednesday, December 10, 2008)]
[Extensions of Remarks]
[Page E2360]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

INTRODUCTION OF THE ECONOMIC RECOVERY THROUGH RESPONSIBLE HOMEOWNERSHIP 
                                  ACT

                                 ______
                                 

                           HON. DAVID DREIER

                             of california

                    in the house of representatives

                      Wednesday, December 10, 2008

  Mr. DREIER. Madam Speaker, the current economic crisis that we are 
facing as a nation has spread throughout many sectors and many 
industries. The banking industry has been crippled, credit markets have 
frozen and manufacturing capacity is shrinking. The worst job loss 
numbers in 34 years were just released last Friday, and the losses were 
widespread throughout every major industry.
  But this crisis began with the housing industry, and it will not be 
fixed without addressing the root problem of excess supply that drives 
down prices. The lack of home buyers has caused the supply of unsold 
homes to increase rapidly. This not only causes blight in neighborhoods 
across the United States, but also places severe downward pressure on 
home values. Falling home prices are particularly detrimental to 
working American families, many of whom rely on their home as a 
financial investment to build long-term wealth.
  As home prices fall, homeowners are faced with the reality of 
declining equity in their homes and many are finding their mortgage 
debt to be greater than the value of their home. Declining values and 
increased foreclosures create a vicious cycle. As more homes enter 
foreclosure, home values continue to decline, leading to yet more 
defaults and further declines in value. All of the ripple effects that 
we've seen throughout the economy, in the credit markets and beyond, 
stem from this core problem.
  We also know that irresponsible actions on both Wall Street and Main 
Street contributed heavily to this current situation. We need a plan 
that addresses the core problems of the housing industry, providing an 
immediate stimulus to the economy, while rewarding responsible, working 
middle-class families who live within their means and make prudent 
financial decisions.
  Today I am introducing a bill that will help to accomplish just that. 
This legislation offers a new tax credit for 2009 and 2010 for every 
home purchase made with a down payment of at least 10 percent. A home 
buyer making a down payment of 10 percent will receive a $5000 tax 
credit. A home buyer making a down payment of 15 percent will receive a 
$10,000 tax credit.
  By linking the tax credit to down payments, this bill will encourage 
only responsible home ownership. And by incentivizing home buying, it 
addresses the oversupply of homes that is creating such strain on the 
broader U.S. economy.
  Unlike the credit enacted by Congress this summer, which was offered 
only to first-time homebuyers, this credit would be available to anyone 
who is able to meet the down payment criteria set forth in the bill. 
This ensures that all working families, not just first-time buyers, are 
able to take advantage of the new credit.
  Furthermore, this bill requires a significant down payment. We all 
know that irresponsible participants in our housing markets--
individuals, banks and government-sponsored enterprises--took advantage 
of the system and helped to create our current crisis in the first 
place. That's why this bill encourages home buying that is based on 
sound financial planning.
  I believe this plan will deliver quick relief by restoring our ailing 
housing industry. It enables responsible home buyers to jumpstart the 
industry, stop home prices from continuing to plummet and restore the 
communities that have been plagued by foreclosures. And because this 
new benefit will expire at the end of 2010, it will encourage quick 
action. Our challenges won't be solved overnight and there are no quick 
fixes. But we must take this expeditious and prudent step to put us 
back on the path to recovery.

                          ____________________
```