Helping Families Save Their Homes Act Of 2009

Floor Speech

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Mrs. CAPITO. Mr. Speaker, I rise today in support of S. 896, the Helping Families Save Their Homes Act of 2009. As the chairman mentioned, it has broad-based support from a lot of groups that have been working with this bill.

Before I begin to discuss the specific provisions contained in this bill, I would like to talk about one of the provisions that is not in this bill. Thanks in large part to unified Republican opposition in the House and Senate, the bill does not include bankruptcy cramdown provisions. I joined with many of my colleagues in speaking against this provision, which previously passed the House and, in my opinion, would have caused untold damage to the mortgage market and substantially increased costs for consumers.

Allowing bankruptcy judges to unilaterally rewrite mortgage contracts is not the solution to the problems in our housing markets. The other body should, therefore, be commended for rejecting attempts to add cramdown provisions to this legislation.

Unfortunately, not all of the problematic provisions have been removed from the bill. The majority continues to insist upon salvaging the failed HOPE for Homeowners program. Last year HOPE for Homeowners was promoted as a way to assist hundreds of thousands of homeowners to modify their mortgages. To date, the program has helped only a handful of distressed borrowers. S. 896 attempts to fix HOPE for Homeowners by increasing the taxpayer subsidy for lenders seeking to offload their worst mortgages on the government.

Because mortgages modified under HOPE for Homeowners received an FHA guarantee, the inevitable losses that will result from defaults on many of these mortgages will further undermine, I believe, the solvency of that critical program.

It is important to note that the FHA is already under stress and that the Department of Housing and Urban Development has made an unprecedented budget request of almost $800 million to keep the FHA afloat. Perhaps a better approach than trying to improve the HOPE for Homeowners program would have been to end it altogether.

I've authored legislation that would provide the Department of Housing and Urban Development with the ability to set up a program to assist struggling borrowers that gives the department much-needed flexibility to adjust to market changes. Yet there are many useful reforms in this legislation that are worthy of Republican support.

First, the Senate included provisions based on legislation by Dr. PAUL of this House that will greatly increase the transparency and accountability of various Federal Reserve liquidity facilities and specific initiatives to rescue individual firms that the government has deemed too big to fail by giving the GAO the statutory authority to audit these programs.

Second, the bill includes provisions to ease the crippling deposit insurance premiums that community banks, banks and credit unions will otherwise face in the coming months.

And third, the Senate bill includes a comprehensive reauthorization of the McKinney-Vento homelessness program which, as the chairman noted, was passed in a strong bipartisan manner here in the last Congress.

We had significant contributions from many of my colleagues on both sides of the aisle. I'd like to thank Mrs. Biggert and Mr. GEOFF DAVIS of Kentucky from our side.

Mr. Chairman, S. 896 is far from a perfect bill, but S. 896 no longer contains what I believe were harmful bankruptcy provisions which could have further paralyzed the mortgage finance market. S. 896 will also make crucial changes in the deposit area which should help advance the economic recovery. For these reasons, I urge Members to support S. 896.

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