Recognizing National Homeownership Month

Floor Speech

RECOGNIZING NATIONAL HOMEOWNERSHIP MONTH -- (House of Representatives - June 09, 2009)

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Ms. WATERS. Madam Speaker, I yield myself as much time as I may consume.

I am proud to be a cosponsor of this legislation which recognizes June as National Homeownership Month. As Chair of the Subcommittee on Housing and Community Opportunity, I am indeed committed to good public policy that will assist citizens to realize the American dream of homeownership. I would like to thank Representative Gary Miller for his continued leadership on ensuring that this resolution comes to the floor every year. This is the seventh time that he has introduced this resolution, and I appreciate his commitment to America's homeowners. Preserving homeownership is more important today than ever before, with foreclosures reaching record levels and millions more Americans struggling to stay in their homes. Homeownership has historically been the single most important wealth-building tool available to families in this country. However, homeownership, as we know it, is at risk. The foreclosure crisis has all but erased the gains we have made in increasing homeownership rates, especially for minorities; and the gains those families thought they had achieved through increases in home equity have also diminished as now 20 percent of homeowners owe more on their homes than they are worth.

The combination of unemployment, unsustainable and predatory mortgages, and uncooperative mortgage servicers has created a perfect storm of record rates, of loan defaults and foreclosures. According to the Mortgage Bankers Association, a record 12 percent of mortgages are either in default or in foreclosure. According to the Center For Responsible Lending, 6,500 foreclosures occur each day in the United States. By the end of 2009, there will be 2.4 million families in foreclosure. We must keep families in their homes, and this Congress and the administration have developed programs to do just that. For example, the Making Home Affordable program, announced by President Barack Obama in March, builds on legislation I introduced at the beginning of this Congress to end this unending avalanche of foreclosures.

Despite the commitment from the administration and Congress to reduce foreclosures, mortgage servicers have been reluctant to modify troubled loans. In fact, NeighborWorks recently found in its survey of housing counseling agencies that servicers are generally uncooperative. They take up to 60 days to respond to requests and frequently lose important documents. In order to be true to the spirit of National Homeownership Month, I call on all mortgage servicers to fully participate in the Making Home Affordable program and to work with families to maintain their ownership.

Vulnerable homeowners are also threatened by scam artists who offer to rescue or help struggling homeowners stay in their homes for an exorbitant fee that must be paid up front. They often deliver either nothing or a higher payment than the homeowner was paying before contacting these companies. The Federal Trade Commission has begun to crack down on these scammers, and I support these efforts.

Prospective homeowners are also caught up in this economic crisis. Because they have no other home to sell, first-time homebuyers have the ability to help stabilize housing prices and neighborhoods. Housing experts are saying that now is the time to buy, but many first-time homebuyers are finding themselves locked out of the housing market. Many families who would otherwise be buying homes now lack the required down payment. Fortunately, the recently enacted $8,000 tax credit for first-time homebuyers is now being monetized so that these homeowners can use it to pay closing costs or to assist with their down payment.

America's homeowners face many challenges this month and will face many more this year. This resolution demonstrates this Congress' commitment to assisting them and first-time homebuyers in achieving the American dream of homeownership.

I urge all of my colleagues to support this important resolution.

Mr. Speaker, I reserve the balance of my time.

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Ms. WATERS. Mr. Speaker, I would like to request of my colleague that we join in a little colloquy prior to going to our closing.

Representative Miller, I know that you have been involved with real estate and housing and development and you understand a lot about the housing markets. And while we have identified that there certainly are problems we have been going through, a crisis with foreclosures and a kind of a meltdown, I am extremely hopeful that we are going to be able to stabilize this housing market and that we can continue to encourage our families to seek homeownership opportunities.

I think we see some indications of the banks getting stronger and being able to pay back money that the United States citizens have invested in the banks in order to stabilize this housing market. But I would like to have your opinion: Based on your expertise and your involvement for so many years, do you think that we are beginning to have a turnaround?

Mr. GARY G. MILLER of California. Well, you have worked very closely with me over the years on dealing with conforming loan limits in high-cost areas for Freddie and Fannie, and in California we almost felt like stepchildren for years. The limits were so low that people in California could not be able to use them to buy a home, and they were forced into riskier loans that many times you and I fought hard to change.

We have raised the GSEs and the FHA loan limit in California and are helping a tremendous amount of people refinance their homes, or people who need to sell a home and people buying a home be able to get into the marketplace at probably at least 100 basis points cheaper than they would be able to get into a jumbo loan.

I don't know if it is over, Maxine. I really wish I could say it was. I remember back in the early eighties when the prime went to 21.5 percent. You remember that. As a developer, I was paying a 24.5 percent interest rate for construction projects I had, and if anybody could even get a loan for 12 percent, they would buy a house at that point in time. But you couldn't get it.

I hope we are doing what is right, providing liquidity in the marketplace to encourage people to take advantage of the deals that are out there today. But you see more and more lenders having to foreclose on homes, and they are putting them on the marketplace. In fact, I have a bill right now that Chairman Frank is going to be bringing up before the committee that allows banks, instead of forcing those homes on the marketplace, they can lease those homes for up to 5 years, and that way you get a lot of these distress sales off the marketplace.

Hopefully we can find a reasonable bottom at that point in time and the market will start to come back. But you have such a glut of foreclosed properties on the market today that it keeps driving values down further and further, and that makes it more difficult for people to be able to stay in their home, because many times they owe more than it is worth.

So hopefully we can get together, and we have done many of these things in a bipartisan fashion, and create a structure that will create a bottom and get us out of this. I am looking forward to that.

But I am really thankful to you for your help and your cooperation and your support for the housing market. You have a passion for that, as I do, and I know Spencer Bachus does and Chairman Frank does also, and hopefully working together in a bipartisan fashion we can find a bottom and move the American people in a positive fashion forward.

Ms. WATERS. Thank you very much. I do appreciate your comments, and I value them because of your experience.

Mr. Speaker, I reserve the balance of my time.

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