National Guard and Reservists Debt Relief Act of 2008

Floor Speech

NATIONAL GUARD AND RESERVISTS DEBT RELIEF ACT OF 2008 -- (House of Representatives - October 02, 2008)

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Ms. ZOE LOFGREN of California. Thank you, Mr. Chairman.

Mr. Speaker, I rise in support of this bill. It is obviously important that we make sure that any of our armed servicemembers who have suffered a financial loss because of their service have access to relief through the bankruptcy courts. That's the least we can do to assist these fine men and women.

But I rise also to say that there are other things that are not yet before us in the bankruptcy arena that we, I believe, are gaining some bipartisan support for.

Many of us have expressed concern that lacking in the recovery package that we will be voting on tomorrow is any provision that deals with the primary mortgage, mortgage on a primary residence, that might be one of many tools to deal with the underlying crisis that has created this worldwide economic instability.

I would have preferred that such a measure be in the recovery package, but it is not essential that the measure be part of the package. It is possible to move such a measure separately.

We were here earlier in the week. I complimented my colleague from Utah saying that it was unlikely we would be on the floor together again because he is not returning, but here we are. And I would just like to compliment him for the hard work and discussions that he has put in behind the scenes over the last several weeks to see if disagreements can be resolved and if parties can come together in the interest of the country. I can't say that we have accomplished that yet, but I think that we have an opportunity, and I actually am quite optimistic that we will be successful in that effort that would be very important for our country.

I see the gentleman standing there. I wonder if I could yield to him, if he wishes to make a comment.

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Ms. ZOE LOFGREN of California. Thank you for yielding.

I would just note that in fact in the rescue package there is a provision requiring the Secretary to renegotiate loans and that will actually, I think, be of tremendous value in dealing with the foreclosure crisis that we face when the government owns the whole mortgage, all of the mortgage. But because securities are being purchased because the credit markets are frozen, we won't necessarily own all of the mortgages in every case. And half of the subprimes have second and third mortgages that will be able to defeat any effort to renegotiate.

So I think that moving a narrowly crafted, for-subprime-only primary residence mortgage measure either later in this Congress or early next might be something that could avoid the $2.1 trillion in mortgages that are set to reset and certainly are at risk of default in the next 18 months.

I am just stating here today, I think we have an opportunity to accomplish that working across the aisle and working across ideological barriers because really we're all in the same place. We want Americans to be safe and secure in their homes. If they are able to meet their obligations, we should go the extra mile to allow them to do that.

I just want to say once again how much I have appreciated working with you, Congressman Cannon, over these years. And I said this earlier this week, but if you look at your voting record, you've got one of the most conservative voting records in this Congress, and as I mentioned, I do not. But that has never prevented us from working together to find solutions for the American people.

I really think you're a remarkable legislator, someone whom I respect a great deal, and I thank you for your service to our country.

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Ms. ZOE LOFGREN of California. If the gentleman would yield, as we both know, because we were on the same conference call with one of the foremost authorities in the United States on this subject, the expectation is, in the natural course of events, that about 20 percent of the acquisition of securities would result in owning all of the rights in order to do a negotiation.

So when you look at the entire package, it's not what we want, but it's not nothing either. I mean, if you could actually renegotiate 20 percent of the reset, it would have a market impact. What you're suggesting, I think, makes sense. And I think, also, that the bill that's coming back would allow the Secretary to actually do what you have suggested because there is that discretion in the measure.

If we did what you've suggested, if the experts are correct that we will have 20 percent of all ownership to renegotiate as provided for in the bill, we're still going to need an additional tool which we're not going to get in this bill, but to do a narrow carve-out for the subprime markets to be able to--for judicial intervention for those areas that we cannot get the rights for.

I thank the gentleman for yielding.

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