Federal Housing Finance Reform Act of 2007
Floor Speech
FEDERAL HOUSING FINANCE REFORM ACT OF 2007 -- (House of Representatives - May 17, 2007)
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Mr. DOOLITTLE. Mr. Chairman, in 1908 in response to the mounting opposition to the creation of forest reserves in the West, Congress passed a bill which created a revenue sharing mechanism to offset for counties the effects of removing those lands from economic development.
The 1908 act specified that 25 percent of all revenues generated from the national forests would be shared with the counties where those revenues were generated to support public roads and public schools. From 1986 to the present, these payments, because of the decline in timber sales, have decreased precipitously.
Responding to this urgent need, in 2000, the Congress passed the Secure Rural Schools and Community Self-Determination Act to compensate for the loss in revenue for these counties, providing the necessary funds for schools, roads and public lands.
This funding benefited 4,400 school districts in 615 counties throughout 37 States.
In September of 2006, this authorization expired, and in December the last payments were made. While several attempts have been made to reauthorize this legislation, none has succeeded to this point, and as a result, our counties are left without the funds that they were promised and they depend upon to provide public infrastructure activities to maintain their roads and send their children to school.
The results have been devastating. In California's Fourth Congressional District, let me just talk about three instances. In Plumas County, where 70 percent of the land is owned by the Federal Government, layoff notices went to 55 teachers and its school districts, and the county is compensating for this by increasing class sizes, closing all school libraries, closing cafeterias and possibly even closing entire schools.
In Sierra County, which is 75 percent opened by the Federal Government, the county is planning to lay off almost 40 percent of its entire education staff, and the superintendent spoke to me about the potential of shutting down one entire school district and being forced to bus children across State lines into the adjoining State of Nevada to receive a public education.
Finally, in Modoc County, which is 75 percent owned by the Federal Government, they will layoff one-third of its entire roads department and over 12 percent of its teachers.
These hardships are not unique and have spread to other States. You will hear in a minute from Mr. Walden of Oregon. Before the government makes any new promise for funding, it should make good on the obligation it already made to the 615 counties across the country which are now struggling to deal with a lack of funding for basic infrastructure needs.
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Mr. DOOLITTLE. Mr. Chairman, the underlying bill makes numerous references to public infrastructure. We feel this, indeed, is public infrastructure, and that it deals with roads and schools. There are certainly needy counties by virtue of being included in this Secure Rural Schools Act. That's why we thought the amendment would be germane.
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Mr. DOOLITTLE. Mr. Chairman, this amendment will prevent the government-sponsored enterprises, or GSEs, from purchasing any mortgage from a lender where the person who received the mortgage did not use a valid Social Security number.
In my State of California, it has been calculated that each legal resident in the State pays approximately $1,200 every year for illegal immigrants to use taxpayer-funded resources, including our highways, hospitals, and schools. Reducing the opportunities for illegal immigrants to purchase primary residences in the United States will be an important step toward decreasing the burden illegal immigrants impose upon our society.
Fannie Mae and Freddie Mac support the residential mortgage market by purchasing mortgages from lenders that, in turn, use the proceeds to make more loans available to home buyers. These organizations, chartered by Congress, should not be in the business of assisting illegal immigrants to purchase homes.
The size of the GSE's portfolios represents a concentration of mortgage market risks, and this has been observed before, that led former Federal Reserve Board Chairman Alan Greenspan and others to urge Congress to consider ways to shrink the size of the GSE's asset portfolios.
What better way to reduce the size of these portfolios than to prohibit mortgages for illegal immigrants. Not only will this change decrease the market risk, but it will also eliminate one more incentive that draws illegal immigrants to our country.
When a person applies for a mortgage, he is asked whether the loan is for a primary residence, a secondary home, or an investment property. According to my amendment, only a person seeking to buy a primary residence would be required to have a Social Security number. Therefore, this amendment does not discourage foreign investment in the United States. Should a foreign investor wish to obtain a mortgage for a real estate investment, he would be able to do so. However, no person illegally in this country should be allowed to purchase a primary residence here.
Since all people who are legally allowed to work in the United States are able to receive a work authorized Social Security number, this bill only targets those that are here illegally. Lending institutions should not be allowed to reward individuals violating U.S. law. Please vote ``yes'' on this amendment.
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Mr. DOOLITTLE. Yes. I did indicate that this only applies to a primary residence. A foreign investor could indicate that----
Mr. FRANK of Massachusetts. Not an investor, but someone who is here under a student visa that might not have a Social Security number, is not working, is here under a student visa and maybe can't work. Could that individual buy a home?
Mr. DOOLITTLE. You would have to be entitled to have a Social Security number, which, as I understand it, would be someone who is employed here.
Mr. FRANK of Massachusetts. But we do have people here, for instance, who are here as students. There are wealthy people who come here to study. In fact, if you find someone paying full tuition in a college, she is probably from another country. And if that parent wanted to buy a home for that student, I don't believe they would have to get a Social Security number; I believe under a student visa you might not be able to work.
Mr. DOOLITTLE. A parent wouldn't need the Social Security number.
Mr. FRANK of Massachusetts. I understand that. But does every student here under student visa have to get a Social Security number? I am told in some cases under a student visa you can't work. If you are here as a student with wealthy parents, the parents want to buy you a home, you might not have a Social Security number and this would keep you from buying a home.
Mr. DOOLITTLE. Well, if the parents want to buy you a home, it would be their investment.
Mr. FRANK of Massachusetts. No, excuse me. The gentleman first said it wasn't the parents. The parents live in another country. The student is here under a student visa, not working, for a 4-year course of study. Could the parents from another country buy that student a home under this bill if the student didn't have a Social Security number?
Mr. DOOLITTLE. As I understand it, Mr. Chairman, the answer to that would be yes.
Mr. FRANK of Massachusetts. How could they if the students don't have a Social Security number, how could you buy them a home?
Mr. DOOLITTLE. Well, because the owner of the home is the parents.
Mr. FRANK of Massachusetts. No. The gentleman is obfuscating now. The parents live in another country. The parents give the student the money so that the student can buy the home. What about a student lawfully in the U.S., under a student visa, whose parents in another country want to finance the purchase of that home? The student doesn't have a Social Security number, maybe under the visa can't work. I think that is the case. The student wouldn't be able to buy a home.
And I do agree that we should tighten up the rules on people here illegally, but as I read this I think it may sweep too far, impose too broad a mandate on Fannie and Freddie over things they can't control. And there may be other categories, but somebody here under a student visa whose family lives in another country, is prepared to finance the purchase of a home, it would appear to me that would make that impossible.
I yield to the gentleman.
Mr. DOOLITTLE. It is true the student himself wouldn't be able to purchase the home. But the parents----
Mr. FRANK of Massachusetts. Again, the gentleman is simply misrepresenting the question. The parents live in another country. People in Saudi Arabia don't have to have Social Security numbers. So the parents are in another country; the student is here without a Social Security number. How does the student buy the home?
Mr. DOOLITTLE. Mr. Chairman, I thought I made clear, the bill allows for foreign investment in the country. The student, under the provisions of this amendment, himself would not be able to buy the home if he were a student not able to work, therefore not having a Social Security.
Mr. FRANK of Massachusetts. The gentleman's interpretation in foreign investment is the parents buy the home for the student. Well, if the student had enough money on his or her own, then the student couldn't buy it.
Mr. DOOLITTLE. Then the student couldn't buy it.
Mr. FRANK of Massachusetts. Well, I don't understand why we would say that. There might be students who have the money to buy it. And this fiction that students who buy a home, parents who buy a home for their own child to live in are foreign investors seems to me to import a fiction to get around an excessively rigid bill. And there may be other categories of people who are lawfully in this country who don't have Social Security numbers and could have the money to buy a home, and I am unpersuaded that we should prohibit that.
Mr. SCOTT of Georgia. Mr. Chairman, I move to strike the last word.
Are you saying that this amendment would prevent home buyers without Social Security numbers from obtaining home loans? Is that correct?
Mr. DOOLITTLE. That is correct.
Mr. SCOTT of Georgia. Is it Social Security number, or valid Social Security number?
Mr. DOOLITTLE. Well, obviously the intent is valid Social Security numbers.
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