Emergency Mortgage Relief Program Termination Act

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Mr. HUIZENGA of Michigan. I appreciate the gentleman's yielding. I need to clarify this.

I'm a freshman here in Washington, D.C. I was not here for the creation of this program, but it's my understanding--and I'm hoping to hear some clarification from you--that there has not been a single application that has even been put in, much less denied or accepted, because this program has not had the regulations promulgated. That is correct; right? I mean, it strikes me that it's like giving a job layoff notice before you've even hired anybody. And that really is the issue, it seems to me, that we need to make sure that we are getting people back to work. That is the best protection that we can possibly give to any program out there for people to make sure that they can make their payments is by giving them a job.

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Mr. HUIZENGA of Michigan. Madam Chair, I move to strike the last word.

The Acting CHAIR. The gentleman is recognized for 5 minutes.

Mr. HUIZENGA of Michigan. Madam Chair, everybody needs to understand a little history here, all right?

This program was put first in place in 1975. I was 6; all right? This vital program has been in existence since 1975. I understand some of my colleagues on the other side of the aisle may have been here for either the creation or shortly thereafter, but this vital program for 36 years remained unused, unfunded, and ineffective because it didn't exist. Now we hear that it's a vital program. We hear that we cannot continue to protect the homeowners of America without this program. It is absolutely nonsensical that we are going to put people further in debt and call that helping them.

Here is what happened the last time government started going in and demanding that credit be eased and all these other things. And I have some experience in this. I was a former Realtor, licensed Realtor in Michigan. I can also tell you I have done housing development. My family is involved in construction.

It used to be, not that long ago, it used to be that you either had to own your lot or you had to have 20 percent down to go get a mortgage and a loan. Well, that 20 percent quickly became 15 percent, which quickly became 10 percent, which became 7, which became 5, which became 2 percent, which became zero down, which became 120 percent loan-to-value because we needed to get people in homes. Well, that was not because the private sector and the free market was dictating that. It was because this body and others were directing them to do that.

We have an opportunity here to unwind some things that have been done. As I said, I wasn't here for the creation of this well-intentioned but crazy initiative, but I am here for the unwinding of that program, as are many of my other new colleagues, and it's about time we do that.

Madam Chair, how we realize we can really truly help people, how we are going to help homeowners, is we are going to get them a job. We are going to create an atmosphere, not a government program. We are going to create an atmosphere that's going to allow the private sector to go out and be productive.

Prosperity is created by the private sector, not the public sector. The public sector receives the dollars that it gets from us, taxpayers, from me as a small business owner, from my employees. It's not a government program that's going to create that prosperity; it's the private sector. It's our job to create an atmosphere that's going to allow that private sector job creation to happen.

I yield back the balance of my time.

Mr. FRANK of Massachusetts. Madam Chair, I move to strike the last word.

The Acting CHAIR. The gentleman is recognized for 5 minutes.

Mr. FRANK of Massachusetts. Madam Chair, I have to respond to what I just heard because it simply isn't true. The notion that the government directed people to make these loans is not true. I don't understand what directive the gentleman is referring to. I would be glad to yield to him.

What policy of the Federal Government, what law directed people to make loans of 120 percent loan-to-value?

I yield to the gentleman.

Mr. HUIZENGA of Michigan. I appreciate the opportunity from the gentleman from Massachusetts.

Fannie and Freddie. We had Fannie and Freddie that were allowed to go do that.

Mr. FRANK of Massachusetts. I reclaim my time.

Understand the difference, ``directed'' and ``allowed.'' Fannie Mae and Freddie Mac never originated a loan. They could not have directed anybody to do anything. They were the secondary market. Fannie Mae and Freddie Mac could only get into action if some private entity made the loan in the first place. Beyond that, during the period when we had the increased subprime loans, which some of us were trying to ban, Fannie and Freddie were in a declining percentage.

But I will yield again to the gentleman to tell me who directed the private sector to make these loans.

Mr. HUIZENGA of Michigan. I appreciate that.

It was an encouragement that happened, and it was allowed.

Mr. FRANK of Massachusetts. I reclaim my time.

I want to say to the gentleman, we are here in the House of Representatives making policy. You have got to be precise. I would say to Members about what you say, ``directing'' and ``allowed'' are two very different things. It is one thing to allow it.

By the way, when you were talking from the perspective of the private sector, it's a very big difference. And there are many things that the government allows that I wouldn't direct. There are things it allows that I wish people wouldn't do. But the gentleman didn't say ``allowed''; he said ``directed.'' That's simply wrong. I asked because--and he didn't say this, and I acknowledge that, but there were some who tried to blame the Community Reinvestment Act.

I should note that in the Financial Crisis Inquiry Commission, three of the four Republican appointees, including Bill Thomas, our former colleague here, chair of the Ways and Means Committee, and Douglas Holtz-Eakin, who was the chief economic adviser to Mr. McCain, specifically repudiated the notion that the CRA had caused this. So we ought to be very clear.

Mr. HUIZENGA of Michigan. Will the gentleman yield?

Mr. FRANK of Massachusetts. I yield to the gentleman.

Mr. HUIZENGA of Michigan. I will be the first one to acknowledge that occasionally Republicans make mistakes as well. So thank you very much.

Mr. FRANK of Massachusetts. I was not talking about Republicans making mistakes. I have no idea what that's supposed to contribute to the debate. I was citing two responsible and thoughtful Republicans, the former chair of the Ways and Means Committee and Mr. McCain's chief budget adviser, plus all of the financial regulators under both Bush administrations who said CRA wasn't the problem.

Now, the gentleman didn't say that it was. Some people have said that, because CRA did have some kind of more mandatory position, but it wasn't for those subprime loans. In fact, with regard to the loans the gentleman is legitimately complaining about, it was those of us on the Democratic side who tried to ban them. Beginning in 2004, the gentleman from North Carolina (Mr. Miller), the gentleman from North Carolina (Mr. Watt), I joined them a little bit later, tried to outlaw those loans. And we were blocked by people who said, No, that's a mistake.

In fact, in 2007, when this House, when we became the majority, finally did make illegal many of those loans in a bill, The Wall Street Journal denounced us and said we had created a Sarbanes-Oxley restriction for housing.

So I just want to make it clear that there was no direction by any entity of the Federal Government. The gentleman appears to acknowledge that when he said, well, Fannie and Freddie allowed it. That's a long way from saying that it was directed.

I yield to the gentleman from Michigan.

Mr. HUIZENGA of Michigan. Thank you. I appreciate that. I am curious, though, how, getting back to this particular amendment and this particular bill, as we are removing this program, why is this program so vital if it was authorized in 1975, and in 1995 the Clinton administration under HUD used this language?

Mr. FRANK of Massachusetts. You've got to move quickly. I have only got 5 minutes here.

Mr. HUIZENGA of Michigan. The language that they said is they wanted to remove this outdated, obsolete, and underutilized program.

Mr. FRANK of Massachusetts. I am reclaiming my time. The gentleman is using it up with the papers.

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