Warm in Winter and Cool in Summer Act--Motion to Proceed--Continued

Floor Speech

WARM IN WINTER AND COOL IN SUMMER ACT--MOTION TO PROCEED--Continued -- (Senate - July 24, 2008)

BREAK IN TRANSCRIPT

Mrs. MURRAY. I assure my colleague from Pennsylvania, I was listening carefully to his comments. He has traveled worldwide, and I am certainly interested in his viewpoints. I hope I didn't make him feel rushed at all, and I appreciate what he had to say.

HOUSING

Mr. President, this week, tens of thousands of homeowners traveled here to the Nation's Capital, and lined up for hours--and even days--in hopes of taking advantage of a mortgage counseling workshop through the Neighborhood Assistance Corporation of America.

These homeowners came from as far away as Boston or Miami--all because they are struggling to hold onto their homes, and they need help with their mortgages. Many others are now steps away from foreclosure because they have seen their mortgage rates rise out of control, or because their mortgage now exceeds the value of their home because property values have plummeted.

Now, while many of the homeowners who came to DC this week were able to get help, there are millions more across this country in the same position who are still in need of assistance. Nearly 8,500 families file for foreclosure each day. And as many as 2 million homeowners could lose their homes this year. Fortunately, we will have a bill before us soon that will enable the Federal Government to lend a helping hand to many of those families.

The housing package that passed the House on Wednesday includes a variety of provisions that would restore stability to the housing market, provide assistance to communities hurt by this crisis, and help prevent thousands of foreclosures. We have considered much of this package before, but it has been blocked by Republicans who have preferred to drag their feet than to address this crisis. We now have another chance, and I have come to the floor today to urge my colleagues to support this legislation and get help into the hands of the homeowners and communities that need it.

Those of us who go home each weekend to talk to their constituents know how worried our families are about the economy--and about whether something will happen to threaten their ability to keep their homes.

It is hard to overstate how serious the housing crisis has become. There are communities across this country where people are literally abandoning their homes because they can't afford their mortgages, and they can't find a willing buyer. As I said, as many as 2 million families could lose their homes to foreclosure this year. And reports estimate the number of families facing foreclosure is higher than at any time since the Great Depression.

At the beginning of this crisis, many of those people were subprime borrowers who received adjustable-rate loans or who were the victims of loan scams. But as home values have dropped across the country, the problem has spread. Families with strong credit, who received fixed-rate mortgages, have seen their homes drop in value by tens or hundreds of thousands of dollars over the past couple of years. Their mortgages are now under water, and thousands of them are at risk for foreclosure too.

This is a problem even in regions that have been relatively healthy, like my home state of Washington--where more and more people tell me they are worried that they will be stuck with homes they can't afford.

The housing legislation that we will consider soon may be one of the most important steps we take this year to help our faltering economy because it addresses the root of the problem--the housing crisis. So I want to take the next couple of moments to talk about three of the main provisions of this bill to explain why we must act now.

First, the bill provides $180 million to give counseling agencies the resources to reach out and help struggling homeowners. Counseling is one of the most cost-effective tools we have to help families who are on the verge of foreclosure. Counselors can help families negotiate with their lenders, readjust their payments, or learn how to budget their expenses better.

And it is incredibly important that we provide the resources now so that we can help families before they reach the crisis point.

Earlier this year, I had the opportunity to meet a single mother from Ohio who had fallen on hard times, which in turn led her to fall behind on her mortgage. Luckily she was able to talk to a counselor, and she and her children were able to stay in their home. She explained that when she got behind, she was overwhelmed. She told me she didn't know what to do. She said, ``This isn't something they teach you in school.''

This bill would help more families like hers get help. Despite the numbers who traveled to Washington, DC for help this week, far too many homeowners still don't know they have options when they get behind on their mortgages.

I fought alongside Senators MIKULSKI, SCHUMER, and BROWN to include this counseling funding back when this bill was first debated in April. It comes on top of a $180 million initiative that my ranking member, Senator Bond, and I included in the 2008 Transportation-Housing Appropriations Act. And I want to thank Chairman Dodd and Ranking Member Shelby for helping to protect the funding in the most recent package.

Next, the bill makes some important changes to help modernize the Federal Housing Administration and enable it to help more homeowners refinance their mortgages. First, it raises the loan limit to take into account the increase in home prices over the last several years. This is very important because in many communities, home prices are higher than the current loan limits, meaning FHA mortgages aren't an option.

It also provides $300 billion to enable the FHA to back loans and help as many as 400,000 homeowners at risk of foreclosure get more affordable--and less risky--mortgages. These changes will help stabilize the housing market and encourage more mortgage holders to give borrowers a more affordable loan that will enable them to keep their homes.

Now, while I support these measures, I want to add--as chairman of the Transportation and Housing Appropriations Subcommittee--that this bill is also putting a lot of new responsibility into the hands of the FHA. That agency currently has close to 300 vacancies and it has the money to fill them. Unfortunately, it has been burdened by the painfully slow hiring processes at HUD.

It is my understanding that FHA Commissioner Montgomery, and our new HUD Secretary, Steve Preston, are determined to reverse this hiring record and get more people on board soon. I certainly hope they succeed. But I also recognize that as we head into the new fiscal year, we may need to take measures to boost the salary and expense funds provided to the FHA as well as get money to the agency to improve its computing capabilities. I intend to address those needs when the Appropriations Committee marks up the next Supplemental Appropriations bill in September.

Finally, I want to caution my colleagues on the Banking Committee that we will all need to continually monitor the lending activity and the funding balance of the FHA's existing mutual mortgage insurance account as well as the new homeownership preservation entity fund established in this bill. None of us wants to saddle taxpayers with unnecessary risk as we try to help homeowners. This bill establishes a new board that will face the daunting challenge of deciding which homeowners can and can't be helped under this new program.

But Congress will also need to do its part to monitor the fiscal health of both the new and old FHA accounts to ensure that the taxpayer isn't guaranteeing loans that have no hope of being repaid. The whole hope of this legislation is about calming the housing markets and using the FHA guarantee to entice mortgage holders to give borrowers a better break--an affordable loan that will keep them in their home. But we must ensure that taxpayers don't end up holding the bill for unsalvageable loans.

Finally, the bill would take important steps to strengthen Fannie Mae and Freddie Mac by establishing a new regulator. It also provides temporary authority to allow the Treasury Department to take action when needed to keep them stable. Fannie Mae and Freddie Mac are the foundation of our system to finance homeownership in the U.S., and it is absolutely critical that we take decisive action to help quickly restore confidence in them.

We started work on this bill in February because Democrats wanted to get help into the hands of homeowners who need it. But despite the desperation people feel in communities across this country, some Republicans have preferred up to this point to stall and block this bill. Now, I was very happy to see President Bush finally drop his opposition this week. And I hope my Republican colleagues will help us get this bill to his desk as quickly as possible.

Especially when it comes to helping people keep their homes, timing is everything. A family that gets access to housing counseling before they start missing mortgage payments can still save their home. And I hope we will finally be able to make that possible for thousands more families in need.

I hope when we finally get this bill out of here, we will be able to make it
possible for more families to feel secure in this country again.

Mr. President, I thank the Presiding Officer and look forward to the vote tomorrow morning.

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