Providing for Consideration of H.R. 1106, Helping Families Save Thier Homes Act of 2009
Floor Speech
PROVIDING FOR CONSIDERATION OF H.R. 1106, HELPING FAMILIES SAVE THEIR HOMES ACT OF 2009 -- (House of Representatives - February 26, 2009)
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Ms. ZOE LOFGREN of California. Mr. Speaker, we are facing a crisis of historic proportions in the housing market. Every 13 seconds, a new house in America goes into foreclosure. What this has caused is a dramatic decline in the value of housing all over the United States. For example, in Contra Costa County, across the bay from my home, housing values in one year have declined 53 percent. So those values, the collapsing housing market, is something we need to interrupt. This bill is part of that effort to interrupt the collapse of the housing markets by doing something that we should have done long ago to restore fairness to the bankruptcy system.
Now, bankruptcy has been part of the Constitution since the very beginning of the United States, and what it allows is for people who are insolvent, who cannot pay their bills, to go into bankruptcy court and reorganize. The unfortunate thing is--and the unfair thing--is that people who are bankrupt, who are insolvent, who are in bankruptcy court, can get reorganization for their yacht, for their investment property, for their vacation homes, for their cars, for their credit cards, for their jet airplane, but not for the mortgage on their principal residence. That's not fair. That's not reasonable.
This bill changes that. And in doing so, it restores some fairness to the chapter 13 process.
The voluntary modification system has not worked so well. According to Business Week last week, only 35 percent of the voluntary modifications have actually resulted in lower monthly payments. In fact, in 47 percent of the cases, they've resulted in increased mortgage payments. So it's small wonder that most of those voluntary reorganizations end up with a re-default in 6 months.
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Ms. ZOE LOFGREN of California. I would just like to note not anyone can go into bankruptcy court. You have to be insolvent. We made it very tough in 2005 to get in there. But we do believe that banks and lenders will come to the table with the stick that homeowners could, in fact, go into the bankruptcy court for relief.
It's important to note what this is not. This won't cost the taxpayers one dime. This is about lenders eating part of the cost for the collapse of the housing market. It's not a bailout from the taxpayers. It makes lenders take some responsibility for what has happened. I think it's about time that the banks stood up to their own responsibility and participated in part of this solution, which they have not done to date.
This bill has been narrowed. It's only for retroactive loans. We've made many other adjustments, but it's sound policy. It's something we should do as soon as possible. It's going to help millions of people, and it's going to help stop the collapse of the housing market and the collapse of prices.
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