Providing for Consideration of Senate Amendment to H.R. 3221, Foreclosure Prevention Act of 2008
Floor Speech
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Mr. SCOTT of Georgia. Mr. Speaker, this is the most important issue facing the American people today, and it is so important that the American people are watching this debate to see, as we are focusing our energies on this and to also, Mr. Speaker, take a look at the other side and the unfortunate distractions. We are not dealing with the war supplemental here. We are dealing with the issue that is on the minds of the American people. The American people are hanging on by their fingernails to their houses. Millions of families are losing their homes. An average of 7,500 people every day in this country are filing for foreclosure on their homes. As we debate this bill in this one hour alone, there will be 875 people who will file for foreclosure in each hour we are debating. That is important, Mr. Speaker.
There is nothing more important on the American people's minds than to do something that brings some reasonable end to this miserable nightmare we are in as a result of this mortgage-foreclosure issue.
Millions of families are seeing their home values drop. Trillions of dollars of household wealth and property values have been lost. Homeowners now owe more on their mortgages than their homes are worth, and the housing mortgage crisis has caused businesses to lay off workers. Hundreds of thousands of Americans have lost their jobs. This is what is at stake, Mr. Speaker.
In terms of liquidity, we are in the worst economic times since the Great Depression, and that is why it is important that we lay this backdrop so the American people can see what we are doing to respond to this issue that is before us today in H.R. 5830 which is a very thoughtful, which is a very responsive response to this very, very serious issue. H.R. 5830, the FHA Housing Stabilization Homeownership Retention Act is the answer to this problem. I commend Chairman Barney Frank for having the foresight in our Committee on Financial Services to put it forward.
Essentially what it does is it gives just $300 billion in authority, not cost, Mr. Speaker. It is very important because I know the other side is going to come and talk about a $300 billion bailout. This is a bail-in that is going to cost the American taxpayers just $2.7 billion that has been outlaid and scored by the Congressional Budget Office.
Later in the debate we will explain exactly what these costs are. And what this bill will do, it will ensure a refinancing of loans for borrowers who are struggling to afford their current mortgages. Participation is voluntary. The mortgage holder would have to agree to a substantial reduction of the current loan's outstanding principal and provide new loans that that borrower can afford.
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Mr. SCOTT of Georgia. That is what is important here, Mr. Speaker. What we are seeing on our side as what is critical is keeping people in their homes. And in order to do that, we are simply offering that we extend the FHA ability to authorize and simply place a guarantee of loans up to $300 billion which in fact is a $300 billion reinvestment in our economy. And again as I mentioned, the cost is only $2.7 billion.
To help defray the government's cost and prevent unjust enrichments such as borrowers' flipping, the bill requires that the borrower shares with the government a substantial position of any profits from selling or refinancing homes.
Mr. Speaker, I come from the State of Georgia which is suffering dramatically because of home foreclosures. The State of Georgia ranks number eight in home foreclosures.
It is at the top of my agenda to make sure that we bring some relief, certainly to the people of my beloved State of Georgia, but certainly the 13th District, which even has a greater preponderance of foreclosures because of the subprime mortgage meltdown. This is extremely important.
And, Mr. Speaker, as I conclude, let me just say this point.
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Mr. SCOTT of Georgia. Will the gentleman yield?
Mr. DREIER. I would be happy to yield to my friend.
Mr. SCOTT of Georgia. It has been made clear, my good friend from California, by the Federal Reserve, by noted economists from my beloved school of Wharton, as well as Harvard, that in terms of liquidity, we are in the worst times of depression.
Mr. DREIER. Mr. Speaker, if I could reclaim my time, let me recognize the gentleman did describe this as that.
Mr. SCOTT of Georgia. Liquidity.
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Mr. SCOTT of Georgia. Madam Speaker, I just wanted to correct an item. I made the statement about us having the worst times since the Depression. I want to bear those facts out. So I want you to know that I am telling the truth.
In this statement from the Joint Economic Committee, it says mortgages exceed equity in homes with falling housing prices. More than 10 percent of homeowners now owe more on their mortgages than their homes are worth. Homeowners' debt on their houses exceeds their equity in their homes for the first time since 1945. In terms of liquidity, money in the marketplace, it is the worst time since the Depression.
Now the important thing to understand as we move forward is to understand the seriousness of the condition. You bring up gas prices. We bring up food prices. We've got all of these problems, but today, the American people are expecting us to deal with the housing crisis.
The SPEAKER pro tempore. The gentleman's time has expired.
Mr. WELCH of Vermont. I yield the gentleman an additional 30 seconds.
Mr. SCOTT of Georgia. Let us deal with the housing crisis. We've got several problems to deal with. And simply because we're dealing with the housing prices, you come down here and want to throw up the gas prices as if to say we've got to deal with that, then the other. We're going to deal with each of those items.
But today, this day, we have housing bills that are on this floor, and we owe it to the respect of the American people to give it the integrity, to give this issue the respect and the seriousness that they demand of this House, and let us stop playing games.
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