American Housing Rescue and Foreclosure Prevention Act of 2008

Floor Speech

AMERICAN HOUSING RESCUE AND FORECLOSURE PREVENTION ACT OF 2008 -- (Senate - June 24, 2008)

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Mr. DODD. I thank the Chair.

Mr. President, let me make a couple observations.

First of all, I see my colleague from Vermont in the Chamber. I, once again, commend him for his strong interest--a shared interest I have--in the Low-Income Home Energy Assistance Program, and our effort to, one way or another, get to this matter, given the importance of this issue to all of us.

Let me, if I can, review the bidding a little bit as to where we are. This morning, there are two new reports out that relate directly to the subject matter that is before the Senate: the housing crisis, which is at the heart of the economic crisis; the foreclosure issue is, of course, the heart of the housing issue.

As I pointed out over the last number of days, we now have a staggering number of foreclosure filings on a daily basis in the country. The latest report shows that 8,427, on average, filings for foreclosure are occurring on a daily basis--not on a weekly or monthly basis. But every single day in this country between 8,000 and 9,000 people are filing for foreclosure on their homes. This is obviously a statistic that is deeply troubling and an indication of broader problems in our economy.

In fact, this morning, one report has the consumer confidence levels at the lowest since they have been recorded in 1967--40 years. People's anticipation about the future, about the well-being of their children or their grandchildren, their ability to own a home, to raise a family, to be able to meet their obligations, to be able to retire with dignity, to be able to afford higher education--all these things working families in this country historically, for the most part, have been optimistic and confident about, today, are showing the lowest level in 40 years.

So the issue we are grappling with is not one that is necessarily going to guarantee we are going to right the problems overnight, but it is a reflection that this body--made up of Democrats, Republicans, and Independents--can, in fact, come together and do something constructive and positive at the epicenter of our economic problems.

That is the opportunity we are going to have in a few short moments, to decide whether to go forward and adopt legislation that would allow us to begin to put a tourniquet on the hemorrhaging of foreclosures in this country with the adoption of the HOPE for Homeowners Act, to be able to do something about the government-sponsored enterprises and to see to it we have a strong regulator, and to establish, for the first time ever, a permanent affordable housing program.

There is a lead story in the New York Times this morning that talks about families who have had their children going to four and five and eight different schools in a school year in some cases because they have had to move out of rental properties as the costs have moved up. So the affordable housing issue, while it is not directly related to the foreclosure crisis, does deal with the issue of affordable, decent shelter in this country. The fact that families are having to move as frequently as they do and their children are having to go to as many different schools in a year as they do because of the cost of housing is a problem we address with this legislation as well.

There is nothing that is as important as this bill for the country at this moment. That is not to say there are not other issues we ought to be grappling with. But there is a great danger we will miss the opportunity of doing something about housing in this country.

The Case-Shiller index now indicates--and I quote them this morning:

The S&P/Case-Shiller home-price indexes, a closely watched gauge of U.S. home prices, show price declines continued to get steeper in April, with prices in every region surveyed now showing year-over-year drops.

Those predictions indicate we may have as much as a 30-percent decline in home values. That is evaporating the long built-up equity people have acquired as a result of purchasing their homes and holding on to them.

So that idea of selling your home one day after your children are grown to provide for your long-term security, to deal with the cost of higher education, to deal with an unpredictable health care crisis that could emerge--today we have almost 15 million homes in this country where debt exceeds equity, and those numbers are predicted to grow steeper and steeper, as the Case-Shiller report this morning indicates.

So the level of optimism, the declining value of homes, and the serious problems in rental housing--all this is contributing to the most serious economic crisis we have had in decades.

What Senator Shelby and I and the other 19 members of our committee have tried to do is to put together, on a bipartisan basis, with a 19-to-2 vote out of our committee--not a highly divided committee, having held almost 50 different hearings over the last year as to what we ought to do to get our hands around this issue--our best recommendation to the Members of this body. Those of us on the committee, working together--all 21 of us on this committee--have tried to fashion and cobble together a proposal that deals with the heart of this issue.

So with the remaining minutes we have to debate this subject matter before the vote at around 11:15--in the next 5, 6 or 7 minutes--I urge my colleagues to join with us. We are not telling you what we have written is perfect. We are not telling you it is going to solve all the problems. If it does nothing more than to restore some confidence the American people ought to have in their Congress, that in itself will be an achievement.

Beyond that confidence and optimism, we think we have recommended some specific ideas that can very well begin to treat the problem of growing foreclosures, declining values in our homes, and the spread and contagion effect this is having on student loans, municipal finance, corporate finance, and the rest, in our Nation and around the world as well. This issue is going beyond our own shores.

So we urge our colleagues to join with us, and over the remainder of today, as these various amendments are offered, to keep our eye on the ball. The idea is to get a bill done, to work out our differences with the other body, and then to give a bill to the President of the United States, I would hope, by the Fourth of July, by Independence Day. What better gift on independence could we give the American people than a sense that this, their Congress of the United States, can come together, despite political differences, and craft legislation to make a difference for our country.

I urge the adoption of the motion when the question is asked.

With that, Mr. President, I yield the floor.

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Mr. DODD. Mr. President, I want to take a couple of minutes, if I can. We had a very strong vote again this morning on the housing proposal. I thank my colleagues. This morning I believe that vote was 83 to 9 to invoke cloture, to begin the 30 hours of debate on this aspect of the bill.

I would remind my colleagues, going back a little bit to the end of last year on the FHA modernization bill, the Senate voted 94 to 2, in December of 2007 on the Foreclosure Prevention Act in April, we voted 84 to 12; then the government-sponsored enterprises, HOPE for Homeowners vote out of committee, which included the affordable housing program, as well as the GSE reform and the HOPE for Homeowners, passed 19 to 2 in our committee, an overwhelming vote on a controversial bill involving substantial resources and ideas to deal with the housing problem.

Then late last week, we had amendments to strike the affordable housing program. That was defeated 77 to 11. An amendment basically to stop or cut out the HOPE for Homeowners Act was defeated 69 to 12.

The point I make with these votes is it is quite clear that this body, both Democrats and Republicans, believes it is important that we craft and move forward with a major housing bill. I cited earlier this morning in the discussion the two recent reports dealing with consumer confidence and the value of homes in America.

The value of homes in America reported by the Case-Shiller Index, which is the most respected index on home values in our country, has reported yet further decline in housing values. In fact, Professor Shiller has predicted we may have as much as a 30-percent decline in home values. That would be the most significant drop nationally since the Great Depression, to the point where now we have millions of homes where the equity in the homes is exceeded by the debt. Of course, for families, that home ownership has not only been a stable environment for them and their families, but it has also been a source of wealth creation; that is, building up the equity in that home to provide for the retirement years, where that home can be sold and the value, the increased equity, can be a source for financial support.

For many families that has been one source of additional income for middle-income families to provide that higher education they promised their children since the day they were born. If you work hard, do the right things, your family is going to stick with you. When that cost of education comes up, for college or community college or a technical school, we are going to be there to help you because the equity in our home is going to give us some additional cash to make that possible.

Let me tell you what it is like for that family today, those 15 million homes across our country where that debt exceeds equity. They turn to that child and say: We can no longer do it because our financial obligations exceed the value of our house because it has declined because of the foreclosure crisis, where more than 8,400 homes are filing for foreclosure every single day in the country.

So we have done what we can in our committee, and our colleagues have supported these ideas. The HOPE for Homeowners Act, the GSE reform, the affordable housing ideas have been embraced by overwhelming majorities. So what we need to do today, if we can, is to come over. The amendments have been suggested. I want to work out as many amendments on housing as I can. There are some we can work out and accept. Some I will not be able to accept, obviously, working with Senator Shelby and others who are involved. But we need to get this done.

If we go again into the middle of July--and just remember that if we take next week off, which we do, we will go back to our respective States. While we are back there walking in our parades and celebrating Independence Day, every day we are there, somewhere between 8,000 and 9,000 of our fellow citizens, on Independence Day, will be filing foreclosure on their homes. So we may leave here Friday or Saturday without having gotten this done, but as you are flying back home and visiting your States and celebrating Independence Day, remember if we did not get this done many more Americans are going to be paying an awful price.

So I urge my colleagues with amendments, give us a chance to work these out. For those who want to offer amendments that are not directly related to this but are terribly important, I do not minimize it. I beg your indulgence to spare us the opportunity of having to engage in that debate on this bill. That does not minimize the importance of your idea. But if you put it on this bill and it is not paid for, the House will reject it, and you will lose both ideas--both your idea and this idea that we are trying to move forward. So some discipline is needed, some understanding is needed. This is the issue of the hour. This is the problem that is causing so much depression in terms of people's aspects of their future.

That report this morning about consumer confidence is so alarming. That, more than anything else, is what I worry about: the optimism and confidence of our fellow citizens. It is at the lowest since data has been collected on consumer confidence. It is at a 40-year low; 40 years have transpired since the confidence and optimism of our fellow citizens have been as low as it is today.

We bear responsibility more than anything else to offer a future, some hope for our fellow citizens and people who count on us. I think this housing proposal gives us a chance to do that. It is not going to solve everyone's problems, but it can make a difference in saying to the American people: We hear what you are saying, and we are doing something about it.

I have often cited historically those first 100 days from March of 1933 to June of 1933, the beginning of the Franklin Roosevelt administration when the country was in a deep depression, millions had lost their jobs, homes were being foreclosed. In that 100 days, there were a lot of ideas that were posed to get us back on our feet again. Many of them never went anywhere; some did.

The most important thing, more than anything else that the Congress or the President achieved in those 100 days, was the American people saw a government that had rolled up its sleeves and gone to work on their behalf. That, more than anything else, was what was needed in those days to give people a sense of hope and optimism and confidence that their Government, their President, their Congress was going to work on their problems and give them a chance to have a better day. And that is as much as what is needed today.

We need to demonstrate to the people of this country who have lost an awful lot of faith in almost everything but certainly in ourselves here, that we can get something done, that we can put aside differences and make a difference in their lives. That is the opportunity that Senator Shelby and I are offering to our colleagues in the remaining hours of this debate.

So we need your help to come over and bring people together so we can wrap this up and send a bill to the House which, hopefully, they can accept. I am confident they will. Not that they are going to agree with everything that we have done, but I believe BARNEY FRANK, the Congressman from Massachusetts, the chairman of the Financial Services Committee; Nancy Pelosi, the distinguished Speaker of the House--they get this, they understand this. They understand the difficulties we have over here procedurally to deal with things, to deal with matters that are different from the House of Representatives.

But they also understand we basically embrace three of the major concepts: HOPE for Homeowners, affordable housing, GSE reform. That is the centerpiece of what we are trying to achieve. The Presiding Officer, as a member of the Banking Committee, has been tremendously helpful, and I thank him for it, as well as other members of the committee, putting aside our own specific ideas of how we would do this to come up with a product that could be embraced by 19 of our 21 members of that committee to bring the bill forward as we have today, with the added provisions that have been included in this bill.

So we urge our colleagues to come over. Senator Shelby and I are more than happy to entertain ideas. Where we can accommodate them, we will do so. If we cannot, we will be candid and tell them that we cannot. There is always another day, but we cannot deal with every bill and every idea that people have been waiting for on this bill. We urge our colleagues to do that.

I ask unanimous consent that the time while the Senate is in recess for the conference lunches count under the time postcloture.

The ACTING PRESIDENT pro tempore. Without objection, it is so ordered.

Mr. DODD. With that, we have had a strong vote. I say this to my colleague from Alabama, through the chair, that 83-to-9 vote, not to mention 94 to 2 on modernization; 84 to 12, the various votes on other matters late last week--all indicate the strong willingness on the part of our colleagues, the overwhelming majority here, to get something done on this issue. That is the best news of all. Now we need to come to closure.

I yield the floor.

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