Helping Families Save Their Homes Act of 2009

Floor Speech

HELPING FAMILIES SAVE THEIR HOMES ACT OF 2009 -- (House of Representatives - February 26, 2009)

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Mr. JORDAN of Ohio. Mr. Chairman, there is nothing in this bill that requires borrowers to attempt to work out a loan modification prior to filing for bankruptcy. There is nothing in this bill that will limit bankruptcy relief to only those borrowers that are in danger to losing their homes because they have a subprime or nontraditional loan.

In fact, I offered this very amendment to limit the scope of the provision in committee, same amendment that was actually the bill that came out of committee last session. Unfortunately, that was defeated.

There is nothing in this bill that addresses the moral hazard the bankruptcy provisions will create by incentivizing homeowners to file for bankruptcy so they can cram down their principal and receive a windfall when housing prices rise in the future. And there is nothing in this bill that will place a sunset on the bankruptcy provisions so that this relief is limited to the current crisis.

Americans want solutions to this crisis that do not abandon accountability and that do not reward those who acted irresponsibly. But think about this: 94 percent of mortgages are being paid on time. It is wrong to tell those individuals they are now going to have to in some way compensate or not be able to get credit in the future to accommodate those individuals, that 6 percent, who have behaved in an irresponsible fashion.

Bankruptcy cramdown is not such a solution. It absolves lenders and borrowers of the responsibility, passing that responsibility off on the taxpayers, those who borrowed responsibly, and those who will seek to borrow responsibly in the future.

I urge my colleagues to vote against this bill.

I yield back the remainder of our time.

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