Expanding American Homeownership Act of 2007

Floor Speech

EXPANDING AMERICAN HOMEOWNERSHIP ACT OF 2007 -- (House of Representatives - September 18, 2007)

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Mrs. CAPITO. Madam Chairman, I would like to first thank my good friend the gentlewoman from Illinois for yielding to me and also for her leadership as the ranking member on the Housing Subcommittee. She has left big shoes for me to fill, but I know she is not going to be too far away on the committee, so I can lean on her for help.

I also look forward to working with Chairwoman Waters on this committee. I know we will work well together as you all have set up a great pattern of bipartisanship on the Housing Subcommittee. So thank you very much for your leadership.

The legislation we are considering today is an important step towards stabilizing a housing market that has been in a steady decline over this past year. While many of us were working in our districts over the recess period, our financial systems were experiencing a bit of a credit crunch, due in part to the problems in the subprime housing markets.

Many of the problems we are facing in the housing market are due to individuals with credit challenges and inexperienced first-time home buyers utilizing very complex and creative financing tools to allow them to purchase a home which they would otherwise not be able to do.

Homeownership is something that we all aspire to, and I am proud to say that my State of West Virginia has some of the highest homeownership in the country, over 70 percent, because with homeownership comes solid community involvement, comes better economic health, and also better socialization and education levels.

The use of interest-only and adjustable-rate mortgages is now causing problems as these mortgages is now resetting at much higher rates, frequently unaffordable rates causing an increase in foreclosures.

The reforms to the FHA will help provide stability in the housing market by providing greater assistance to new and riskier home buyers. Some of the reforms I would like to highlight are the extension of the maximum length for an FHA loan from 35 to 40 years; directing the FHA to serve high-risk home buyers while lowering upfront fees for high-risk buyers; allowing for a zero down payment for first-time home buyers, and I'm hearing today also for those who are FHA qualified; and authorizing an increase in FHA loan limits for both rural and urban areas.

The final component is especially important because in many areas the current loan limits are outpriced by many larger metropolitan areas. These expanded limits will help many buyers access stable and secure loans so they can achieve the goal of homeownership.

Each of these reforms has bipartisan support, and we must continue to work together in order to provide much-needed assistance to our struggling homeowners.

Again, I would like to thank Chairwoman Waters and Ranking Member Biggert for their hard work on this critical legislation.

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