American Housing Rescue and Foreclosure Prevention Act of 2008

Floor Speech

AMERICAN HOUSING RESCUE AND FORECLOSURE PREVENTION ACT OF 2008 -- (Senate - June 25, 2008)

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Mr. DODD. Mr. President, if I may, I will inform Senators as to where we are on the housing bill. Most of my colleagues know that we voted for cloture yesterday with a substantial vote of 83 to 9--not something that occurs with great frequency, getting that kind of strong, bipartisan support for the housing bill, which Senator Shelby and I have spent weeks crafting, with the support of our members on the Banking Committee. The most recent vote was 19 to 2, on a committee with 21 members, where we ended up with strong, bipartisan support to deal with the foreclosure crisis in this country, to reform government-sponsored enterprises, and to provide for an affordable housing program. That is not to mention other provisions that came out of the Finance Committee, under the leadership of Senator Baucus and Senator Grassley, to deal with mortgage revenue bonds, tax incentives, first-time home buyers, and counseling services. As well, we have expanded the numbers to assist individuals who are seeking to stay in their homes and are trying to achieve workouts with lenders at a cost that is affordable for them.

There are many aspects of this important bill. There is no more important issue before us today than dealing with our economy. One need only look at the headlines of the major newspapers in the Nation this morning saying that consumer confidence is the lowest it has been, according to some, in 40 years. The prospects people see for themselves and their families are very low. That in itself is a source of great concern, and it ought to be to every Member of this body--that our fellow citizens don't see a very bright future for themselves and that we need to take some steps on energy and health care costs and housing. We have 8,400 people every day filing for foreclosure. That ought to alarm everybody. We need to take some steps to allow people to work this out and stabilize this cascading housing problem.

When you have home values falling by the hour and you have problems with the lack of new starts, unemployment rates occurring, with it spreading to student loans and commercial lending, this problem has at its center the housing crisis and foreclosure crisis all across our country, and it is not localized in one or two areas.

The fact we have been able to put together a major proposal that addresses this issue, and yet as we stand here, I am stymied because one Senator has decided this bill is not going to go forward--one--because it takes unanimous consent for us to move to the bill.

We already worked out a number of amendments on this bill. People have ideas they want to bring to it, and I welcome those. We wish to get to those ideas, even take the agreements we have reached with Republican and Democratic Senators. One Senator is saying: You can't do that. Again 8,000 more people are about to lose their homes today, but one Senator has said: No, I am sorry, but my bill is more important than the 8,000 of you yesterday or the 8,000 tomorrow who will come up.

We are trying to get this bill done. There are several other Senators, Democrats and Republicans, who have ideas they wish to bring to this debate. Some we can agree to, some we cannot. But they deserve a debate and a vote on their idea. I welcome the opportunity to have that conversation with them. In many cases, we will try to work them out if we can. Where that is impossible, then this body has a right or obligation to vote them up or down, whether or not to accept those ideas.

We had very constructive conversations with the House of Representatives. I am very grateful to Speaker Nancy Pelosi who has welcomed our work here as we try to work out the differences between the House-passed bill and our bill, which are not substantial, in my view. We ought to come to some agreement on those differences. Congressman Barney Frank from Massachusetts, chairman of the Financial Services Committee in the House, has been working with us so we can resolve these differences. I had hoped before we left for the Independence Day recess we would have been able to send a bill to the President for his signature. What greater signal could we send, as I said yesterday, to the American people than this Congress--highly divided, partisan beyond belief in too many cases--was able to come together on an issue that affects so many of our fellow citizens. We are this close to doing it. But I cannot offer an amendment today or invite Members to resolve their differences because one Senator has decided we should not do anything except his bill.

Unfortunately, that is how this institution works too often. As people know, I have been sitting here patiently for the last day and a half, along with Senator Shelby, trying to resolve these matters. We have to wait until the end of this day. We will go another 5 or 6 hours doing nothing, sitting around in quorum calls and listening to speeches until we run out the clock and then have an opportunity to get to these issues.

I know there are people who care about Medicare. They care about the supplemental appropriations bill. People care about the Foreign Intelligence Surveillance Act. The majority leader has laid this out in clear, concise terms that we need to deal with these matters before we leave, and we are going to do it the hard way or the easy way. But it requires cooperation. It requires people being able to put aside their differences and let us get to the matters before us.

No other issue is more important. I apologize for getting emotional about this issue, but it is awfully difficult to go back home when people are facing gasoline prices that have gone through the ceiling, they are watching their fellow citizens lose their homes, the values of theirs, if not losing them, are declining, joblessness rising in the country, and they are wondering why we cannot manage to get anything done on their behalf.

While we cannot solve every problem, here we have a collection of bills worked out in one package, crafted by Democrats and Republicans coming together, and we cannot even get to debate the issue or bring up ideas other Members have on how we might improve this legislation.

I wanted to inform my colleagues as to why we have not been able to get much done here. It is not for the lack of leadership by Harry Reid. He has been leading and asking the other side to work with us to get this job done. As he said last evening, there are moments, we all understand, when partisan politics take over. There are other moments when you have to set that aside, and this is one of those moments.

So my urging at this moment at 11:15 this morning is, would this one Senator reconsider what he is objecting to and allow us to get to this matter. That Senator has had four different opportunities to vote on his bill. I happen to support his bill, by the way. I think I am a cosponsor of it. If not a cosponsor, I certainly have been supportive of it. I also understand there are other issues with which we have to grapple, and the housing issue is a major one for us.

We are right on the brink. In a couple of hours, we can resolve this matter, vote on it, send it to the House, and hopefully they will agree, and send that bill to the President. We can do that literally in the next 2 or 3 hours if I can only get an opportunity to raise these matters on the floor of the Senate.

I am deeply grateful to the majority leader who has done everything conceivable to make this happen. What we are lacking is the kind of cooperation required to get this bill done. This is not a bill I would have written on my money, nor would Senator Shelby. There are 100 of us here. We all have our ideas on how we would frame these matters. But we are elected to a body that includes 99 other Members, and you have to sit down with each other and work to achieve anything. When you refuse to do that, you make it impossible to step forward.

My urging at this hour of the morning is let us get to this bill, allow these Members--Democrats and Republicans--to have their ideas brought up, resolved, or voted on so we can conclude this work, send it to the House, and hopefully to the President of the United States for his signature.

Mr. President, I ask unanimous consent that the time the Senate spends in quorum calls during today's session count toward the time postcloture.

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Mr. DODD. Madam President, before our colleague leaves the Chamber, I commend him for his statement. I had a chance to listen to part of it before coming to the floor of the Senate. This is a long-held view of my colleague when it comes to civil liberties and the rule of law. I commend him for remaining consistent in that insistence. He is absolutely correct that this is not a choice between security or liberty. In fact, I argue, as he has, that when we begin to retreat on the rule of law, we become less secure as a people. We have learned that lesson painfully throughout history. This is the time for us to be vigilant, both in terms of our security and also when it comes to our rights. This is an issue that ought not divide people based on our determination to deal with terrorism or those who wish to do great harm to our country but to recognize that historically, when we have been motivated by fear and have failed to stand up for basic rights, we have made horrendous mistakes. When we have stood up for our rights as well as insisting on our security, we have done our job as a generation, as previous ones have as well.

This is one of those moments history will look back upon. Why did we say that 17 phone companies that relied on a letter and not much more than that decided for over 5 years to invade the privacy of millions of Americans and would still be doing it today but for a whistleblower who revealed the program? Why did they not seek the FISA Court, as 18,748 other cases that been submitted and only 5 examples when they were turned down seeking a warrant since 1978? Why in this case did the Bush administration decide to avoid that normal process and go with a simple letter, without any legal justification I can determine, and get that kind of reaction? Why should we not know that? Why should not the American people know that? What happened here?

That is what the Senator is insisting upon. We will not know the answers to those questions if we, as a legislative body, by a simple vote here, declare that the courts have no business examining the legality of this action. We will avoid that responsibility by casting a vote to keep this immunity process in place. I will be joining him. In fact, I will be offering the amendment to strike the immunity provisions, to do our job when it comes to dealing with FISA, to modernizing it, but not to grant immunity to 17 phone companies.

Quest, to their great credit, when they were given that letter, said: We need more legal justification. They did not engage in this program. Not all phone companies did. But the ones that did bear the responsibility to determine whether what they did was legal. We will never know the answer to that if the Senator from Oregon and I do not prevail on our amendment.

I commend him immensely for his statement.

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Mr. DODD. Madam President, I see my good friend from West Virginia on the floor. While I have some disagreement with him on the effort he has made on the FISA bill, I commend my friend from West Virginia. He has the thankless task of heading up the Intelligence Committee, which is a difficult job. I wish to acknowledge that and recognize that. My respect for him and the work he is doing and trying to do on this issue is something I respect immensely. Unfortunately, we don't agree on one aspect--at least one aspect--of this bill, but that in no way diminishes my respect for the effort he has made to try to produce as good a bill as he can under the circumstances. You only have to try and manage a bill around here to understand how difficult that can be, as someone who is engaged right now in this housing proposal.

Senator Shelby and I have spent weeks putting together a bill that has enjoyed almost unanimous support in our committee--19 to 2--coming out of the Banking Committee. We had the vote of 83 to 9 the other day on a cloture motion to deal with a proposal we put together covering everything from mortgage revenue bonds and tax incentives for people to buy foreclosed properties, not to mention the GSE--the government sponsored enterprises--reform, an affordable housing program in perpetuity to assist rental housing opportunities in the Nation, as well as the HOPE for Homeowners Act to deal with the foreclosure crisis. Here we are now approaching the late afternoon of Wednesday. We had the cloture vote yesterday morning, about 30 hours ago. We have yet to have one amendment I can deal with because one Senator is insisting that his bill be paramount, that we disregard the efforts we have made to listen to ideas, to take additional suggestions that have come from other Members to incorporate as part of this bill.

Senator Kohl of Wisconsin has a very good proposal which we have worked out. Senator Sununu has made a proposal as well and we have been able to modify it and work with him to be a part of it. Senator Isakson has made a proposal we are working on to deal with a date in this bill that could make a difference. Senator Bond has a proposal we are working on dealing with disclosures. Senator Kohl and Senator Nelson are working on a proposal dealing with 401(k)s. All of these ideas have to be held in abeyance because one Senator won't even let us consider these matters on the floor, to bring them up and to deal with them.

It is awfully difficult to understand, when you consider that between 8,000 and 9,000 people every day are filing for foreclosure in this country. This is the center of our economic problems in the Nation.

The Wall Street Journal reported today in a banner headline that consumer confidence in this Nation is at the lowest point it has been since the late 1980s, early 1990s. A report yesterday actually takes it back to 1967. We are also told that home values are declining by the hour in this country. The Case-Schiller Index indicates that home values may decline by as much as 30 percent over the next 2 or 3 years. This is affecting student loans, it is affecting municipal finance, and it is affecting commercial borrowing. We are literally in a stall with the economy growing worse and the level of optimism and confidence of the American people declining at a rapid rate.

There is nothing more important we could do before adjourning for the next week to go home for Independence Day than to deal with this bill. We could literally complete this housing bill in about an hour. That is about all it would take to consider the amendments we can agree to, to adopt the ones we have, and then move this bill off this floor, out of this Chamber to the point that I think the House may accept what we have done, and send the bill to the President for his signature.

What better message to send to those who are facing potential foreclosure, of losing their most important and valuable asset that the overwhelming majority of Americans will ever have, not just in financial terms, but in the context of having a home for their families. This is something most Americans wish for their children, wish for their grandchildren, wish to have themselves, that idea of a home where you grow up and live. The fact that between 8,000 and 9,000 people--not on a weekly basis, not on a monthly basis, but every single day--every day we are home next week, every day we are gone from here, remind yourselves that another 9,000 people are beginning to file foreclosure and losing their homes. Neighborhoods collapse, values in these neighborhoods go down, and we see the continued suffering that goes on in our country, all because I can't even bring up and allow consideration of some amendments on this bill.

We have been at this now since January, trying to put this together and here we are in late June and still unable to get even consideration of amendments or to vote on some we may disagree with. There are many others of our colleagues here who have some ideas. I failed to mention Senator Voinovich. We have proposals from Senator Levin and Senator Stabenow involving important projects in their State, not to mention Massachusetts as well. There are a number of other things included in this legislation providing the kind of support for those who are out there, including counseling to people going through foreclosure or who could go through foreclosure. All of these elements could make a difference; the community development block grants to mayors, county supervisors, and Governors that could provide some targeted help in neighborhoods that have foreclosed properties.

We learn from screaming headlines on a daily basis--you need not hear my voice; just listen to what is going on in almost every State in the country. Now the States of California and Nevada are particularly hard-pressed, as well as Arizona, Florida, Michigan, and Ohio are seeing these numbers at record levels. The State of Nevada, in fact, I think, on a per capita basis has the worst foreclosure rate in the country, what that State is going through and the people are suffering from in that jurisdiction, with 10, I am told, centers around the State trying to help people hang on to their homes if they can.

Here we have a proposal that would provide that kind of relief, a system that would allow for workouts where people could have a new mortgage they could afford to pay, as well as paying into the program at some cost, and the lenders taking, of course, a significant cut in what they would otherwise be getting. But it would allow us to keep people in their homes.

So in those States that are feeling this particularly, I want them to know there are those of us here--and they ought to know the majority leader of this body, Senator Harry Reid, has been on the forefront of trying to get this bill up, trying to allow us to vote on it to get the job done. I wish to thank him for that, as the chairman of the Banking Committee, to have a majority leader who understands this priority is at the top of our list. I am deeply grateful to him for making it possible for us to get as far as we have.

But to know we are down here with a few remaining hours before we will be leaving for a week or 10 days; knowing that in that period of time, unnecessarily, in my view, more Americans may end up paying that awful price, watching their home value decline, watching them possibly lose their homes; that idea of being able to build that equity and provide for your children's education, to contribute to your retirement, to deal with an unexpected illness in the family where that equity could make a difference, all of that is eroding because we can't get off the dime because we have a colleague who wants to insist that his proposal be paramount, that we drop everything else and deal with that bill. I say that respectfully. I have been here 27 years and this happens periodically. But at this moment, at this time, facing the worst crisis in housing since the Great Depression, this is not the kind of reaction we ought to be getting.

I am going to come here periodically as long as we are here to talk about this. I will make unanimous consent requests, or the leader will, to try and let us move on this. When objection is heard, then that Senator ought to have the courage, in my view, to stand up and express that objection on why we can't deal with this housing bill. Even if you disagree with the bill, allow us to vote. Allow your colleagues to offer their amendments. They need to explain to the American people why it is that after all of this effort, with an 83-to-9 vote yesterday, that Democrats and Republicans want to do something about housing, but we can't get a bill up and can't consider these outstanding amendments.

I apologize to my colleagues for this, but they ought to know what is going on and why it is. Members have asked me: Why aren't we voting? Why can't we bring up these matters? The reason is because I need unanimous consent to do so and one Senator can object, and because they object, none of these other amendments, Republican or Democratic amendments, can be considered or modified, even, in this context. So that is why we are here and where we are. If people are wondering why, after this long time, despite the efforts of bringing people together, we are not managing to get this bill done, that is the reason. My hope is that common sense and reasonableness may prevail in the coming hour or so that will allow us to get to this. But if we are unable to do so, then that is the reason.

With that, I yield the floor and note the absence of a quorum.

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Mr. DODD. I thank my colleague and agree with him on several fronts. The first is that I commend Attorney General Cuomo for his aggressive pursuit in ferreting out fraudulent appraisal practices. Law enforcement has said repeatedly that unscrupulous appraisers are the ``enablers'' of mortgage fraud.

Appraisers, seeking new business, are eager to ``hit the number'' needed to make sure a mortgage is approved. If they fail to give the lenders and brokers the appraisal needed to close the loan, they simply don't get any more referrals from those lenders. As a result, appraisers were inflating their estimates of house value, adding to the frenzy that created the housing bubble.

The guidelines negotiated by Attorney General Cuomo with Fannie and Freddie, and approved by OFHEO, seek to ensure that this kind of pressure cannot be brought to bear on appraisers. They are designed to ensure independence and address the significant evidence of collusion between lenders and appraisers that Mr. Cuomo uncovered.

I understand there is great concern about the process for the reforms the attorney general is demanding. I also understand that some people don't like the new standards which will affect the practices of the lenders that sell their mortgages to Fannie and Freddie.

As a result, I agree with my colleague that the Federal banking agencies have a role in this process. These agencies already have regulations in place that set forth appraisal standards for their lenders. However, the appraisal fraud over the past couple of years, and the attorney general's action, should serve as a wake-up call to the regulators that their standards must be revamped and their enforcement stepped up.

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