Basically What You Have Done on the Bill is it Says: Effective on the Date of the Act there are Rescinded

Floor Speech

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Ms. HIRONO. Madam Chair, an amendment offered earlier directing the Secretary of the Department of Housing and Urban Development (HUD) and the Secretary of the Treasury to study the negative impacts of underwater mortgages on the housing market and on the U.S. economy and to report the findings of this study to Congress, including recommendations on how to mitigate the effects of these mortgages, makes eminent sense to me.

About 12 million to 15 million homeowners, nearly one quarter of homeowners in this country, are currently underwater on their mortgages, meaning that they owe more on their mortgages than their homes are worth. These borrowers are diligently making their mortgage payments but need some kind of lifeline to reduce their debt burden.

We all agree that we need to look at ways to cut government spending to address our country's fiscal crisis, but what is the purpose of this underlying bill? Why are my colleagues on the other side of the aisle trying to end programs that were established to assist families suffering from the foreclosure crisis without offering any plan or remedy to help the millions of Americans who are trying to stay in their homes?

Families in every single one of our congressional districts are desperately seeking help to stay in their homes, the American Dream. Last year, I met with an owner of a car dealership in Kihei, Maui. This constituent had a successful business until the economic downturn reduced the number of her car sales. Increasingly, former customers of hers were returning to her dealership to return the cars that they had purchased from her, handing back their keys because they could no longer afford to make their car payments.

This car dealer eventually found herself in dire straits, so much so that her lender wanted to put her dream home up for a short sale. She didn't understand why the lender was only considering a short sale and didn't want to work with her to help her keep her house.

It was only when my office contacted the lender on her behalf that she was able to receive a forbearance on a portion of the principle and get a permanent modification. Sadly, stories like hers are commonplace these days.

The Federal foreclosure mitigation programs, which unfortunately have not helped as many homeowners as we would like, still provide a lifeline. Without these programs, many more lenders would be pursuing short sales and foreclosures rather than trying to help meet homeowners halfway in helping them keep their homes.

The FHA Refinance Program, also known as the FHA Short Refinance Option, assists underwater borrowers by facilitating voluntary mortgage principal write-downs and refinancing the loans into a new stable FHA-insured mortgage, thereby enabling borrows to have a reduced monthly payment and a mortgage that is more aligned with actual property values.

FHA just started implementing this program a few months ago; we need to give the agency time to get it off the ground. We should also focus on what can be done to make the programs more effective so that the maximum number of underwater borrowers who are eligible for the program can benefit.

Instead of coming up with new initiatives to assist thousands of homeowners or working to improve existing foreclosure mitigation programs, bills like this will only serve to destabilize an already fragile housing market and further delay our economic recovery. With bills like this, the House majority continues to turn their backs on the middle class families and our country. Let's focus on what can be done now to stabilize the housing market, create jobs, and get the economy back on track.

I urge my colleagues to vote against the underlying bill.

Madam Chair, I yield back the balance of my time.

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