Date: 1983-04-19
Speaker: ST GERMAIN (democrat)
Chamber: H

I would like to commend the chairman of the subcommittee for his very diligent efforts in this legislation. Once again he displays. for all to see. his compassion and feeling for people who are being beset with economic disaster. through no fault of their own. and unable to meet an obligation that is probably the most Important obligation they have other than feeding. educating. and clothing their children. as the shelter for their families. The gentleman has worked long and hard on this legislation. It is easy to come up with a variety of reasons as to why it should not be supported. But I think the bottom line should be this: Do we believe that it is fair and reasonable to assist. as the gentleman from Texas mentioned. the concerns and troubles of our major financial institutibns not only in this country but in the world? And yet. to say to innocent people who did not have the sophistication of those financial institutions. that "Though you. John Q and Jane Q homeowner are not responsible for the recession we have been in. though you are unemployed through no fault of your own. though you are unemployed because of fiscal and financial policies that have wreaked havoc upon untold millions of our American citizens. we are not going to help you. but we are going to help the major financial institutions of the world." I have to agree with the gentleman. these innocents who came before our committee dying to work. wanting to work. they came with their families. we listened to them and I. as the gentleman from Texas. was touched by them. I do hope that this House will exerelse the necessary compassion and feeling toward these innocents who have been ravaged by this severe recession. Let us not take away from them the dream of every American to own their own home. The time has come for us to assist them. And when I hear of threats of a veto by the President. the Senate not acting. I am totally amazed. I think the President on this one would have to reconsider very carefully. very. very carefully and realize that the assistance we are trying to provide through the efforts of the gentleman from Texas and the full Committee on Banking. Finance and Urban Affairs is assistance that needs to be given. Once again I commend the gentleman. I urge my colleagues to join me in throwing a lifeline to those families who are either in danger of losing their homes through foreclosure or who have already lost their homes and are wandering through the streets of our cities and towns seeking shelter. To most American families. their home is more than shelter and more than a hedge against inflation. Homeownership represents achievement. as well as stability and a sense of control over ones life. For over 50 years. Congress has passed law after law designed to encourage hardworking American men and women to become homeowners. As economic circumstances have changed. we have also acted to forestall tragedy in the face of crisis. I am persuaded that just such a crisis exists today and that we cannot stand idly by while hardworking families who have lost their jobs due to the present economic recession also lose their homes. Although we have been interest rates drop enough this year to permit some families to become homebuyers. the economic situation remains grim for millions of unemployed Americans. The national unemployment rate has topped the10percent rate for several months and many areas of the country are struggling with 14. 16. even 22 percent unemployment rates. It is not unexpected that as the unemployment rate increases. the delinquency and foreclosure rates increase. At the end of 1982 over 230.000 mortgages were 90 days or more delinquent and almost 200.000 homes were lost through foreclosures. the highest number of foreclosures in any year since the Depression. These statistics do not begin to describe the pain and humiliation of the families who are in danger of or actually lose their homes. In a nation that has a very strong tradition of homeownership. homeowners will go to great lengths to hold on to their homes because to them. losing a home represents not just a financial setback. but a social failure and humiliation. I am convinced that the unemployed families that this bill would assist. take their financial responsibilities very seriously and. if given shortterm assistance. will make every effort ti. repay the Federal Government for that help. The Congressional Budget Office estimated that the $760 million authorized in this bill would assist approximately 100.000 homeowners by providing a subsidized loan to cover the difference between the total mortgage amount. property taxes. and operating expenses and 38 percent of the homeowners income. The payments would be made to lenders on behalf of homeowners experiencing difficulty in making their mortgage payments due to a loss of employment. Assistance commitments could be made to eligible applicants whenever the 60day delinquency series maintained by the Federal Home Loan Bank Board exceeds 1.3 percent for 3 consecutive months nationally or in any Federal Home Loan Bank Board district. The loan must be repaid over time or when the property is eventually sold. In addition to this vital program of financial assistance. the bill also requires the Federal financial supervisory agencies to take specific actions to support continued forbearance. Under this provision. the Federal financial supervisory agencies would communicate with mortgage lenders encouraging them to exercise forbearance on residential mortgage foreclosures. The supervisory agencies are also directed to waive or relax limitations relating to mortgage delinquencies. so that these mortgage lenders are not unfairly penalized for exercising forbearance. Safety and soundness considerations would. or course. still apply. Finally. the Federal agencies that provide assistance in the form of advances. discounts. and extensions of credit are directed to give special consideration to applying institutions that have exercised forbearance. As important as each of these actions is. however. none is a substitute for the program of financial assistance provided in H.R. 1983. Rather. all of these provisions work as complementary efforts to relieve the dreadful burden of foreclosure that faces so many Americans. I strongly believe it is the obligation of this body to extend a helping hand to the homeowners who are struggling to keep their heads above water. I have confidence that once the economy is recovering strongly. these families will repay the Federal Government In full. Our actions will have maintained stability in hundreds of communities around the country and will reaffirm the role of our Government which is to act compassionately during times of great need.