30-Something Working Group
30-SOMETHING WORKING GROUP -- (House of Representatives - March 14, 2007)
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Ms. KAPTUR. Mr. Speaker, I thank the gentleman from Ohio (Mr. Ryan) and also Congressman Kendrick Meek from Florida, two 30-somethings who are outstanding leaders in this Congress, bringing new energy and new vision. I thank them for yielding me this time.
We will have extensive debates on the budget concerning the supplemental request for the war in Iraq, the global war on terrorism, and other related measures tomorrow and later next week. But as we are debating this and looking at sending another $100 billion across the oceans, halfway around the world, to support our troops and to try to reach resolution to that conflict, I want to bring to the attention of the American people a very serious issue here at home, one that is making headlines all over the United States.
This is USA Today's headline, ``Record Foreclosures Reel Lenders,' and ``Subprime Troubles Send Stocks Into Swoon.'
The issue of mortgages across this country going belly up by the thousands should be of concern to every Member of this Congress. The stock market this week has been roiled by concerns over the financial health of largely unregulated mortgage brokerage institutions that have been irresponsibly issuing mortgages in what is called the subprime market across this country and much of that market targets consumers with less than stellar credit ratings or who are at the margins of home ownership in this country.
They have been luring them into mortgages they can't afford, and as those mortgages adjust to higher interest rates in the third, fourth, fifth and subsequent years, they go belly up.
We saw yesterday the connection between the fast rate of foreclosures and the health of our economy when the Dow dropped 243 points as a reaction to the dramatic rise in these foreclosures. As USA Today recounts in the first paragraph, ``The reason many mortgage lenders are in trouble became alarmingly clear Tuesday. The Mortgage Bankers Association said more than 2.1 million Americans with a home loan missed at least one payment at the end of last year, and the rate of new foreclosures hit a record.'
Companies like New Century Financial, the Nation's second largest subprime lender, have quit making loans and are edging towards bankruptcy protection. There is a map in the article that shows certain States, and I am going to discuss my own now, that are far above the national average where we know thousands upon thousands of people are losing their homes.
Ohio was the number one State in the Union to date with these mortgage foreclosures, three times the national average. They are estimating that in the next year and a half, over 250,000 more home mortgages will reset, and they are estimating that the financing gap in Ohio for this year and next year now totals somewhere between $14 billion and $21 billion. That is just Ohio. Add to it Alabama, Texas, Mississippi, Tennessee,
Indiana, Michigan, West Virginia. This is a problem of national proportion.
There is plenty of blame to go around, but there is no question it is a serious issue that should be given primacy in this Congress.
I want to compliment the gentleman from Massachusetts (Mr. Frank) for holding hearings yesterday on hedge funds, the unregulated part of the financial markets that is rather secretive. We don't know a lot about them, but we know many times they are involved with intertwining with these types of loans that have been going out into the marketplace.
We know our weak economy contributes to the situation, but also the failure of the past Congress as well as State legislatures to address predatory lending practices and to try to nip this problem in the bud before it became so much worse.
There is another side to this coin as well, and that is the large number of campaign contributions made by these hot-shot lending brokerage firms that have been making deals across this country; and that story, unfortunately, has to come out, too, and perhaps why some lawmakers have been unwilling to grapple with the magnitude of this problem and prevent the kind of foreclosures that are going on across the country.
Let me say that this USA Today article and the U.S. Department of Housing and Urban Development have a phone number that I urge citizens to call: 888-995-HOPE. 888-995-HOPE.
This line will connect those who are concerned about losing their homes to foreclosure with foreclosure prevention counselors nationwide. That is something we can do immediately. In the measure we will pass next week, we will make every effort possible to put in housing counseling money, and I would urge the Department of Housing and Urban Development to target those dollars to the areas that are just bleeding with foreclosure after foreclosure after foreclosure.
State and local governments could do a lot to help homeowners find help also, particularly in working out financing deals. I think Wall Street is going to have to take some losses. They ought to take them earlier rather than later. We ought to package some of this debt, and we ought to find a way to eat some of it and move some of those egregious profits they are making into filling the financing gap, because what good will it do for us to have millions of housing units across this country vacant? It is not going to help anybody.
We know in these subprime markets, they don't set aside escrow money for property taxes, and we know this is going to have a major effect on local government as well.
Mr. Speaker, I just want to say the President and his administration are focused on rebuilding Iraq, but somebody had better focus on rebuilding America and dealing with these rising foreclosure problems across the country. I will be the first in this Congress to put my shoulder to the wheel.
I want to thank Congressman Meek for yielding me this time and thank him for his leadership in showing how much money we are spending in Iraq and how it is affecting our ability to address domestic needs here that coast to coast are so very serious.
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