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Public Statements

Consolidated and Further Continuing Appropriations Act, 2012

Floor Speech

Location: Washington, DC


Mr. CAMPBELL. Mr. Speaker, I rise in support of H.R. 2112, the Consolidated and Further Continuing Appropriations Act, but want to express serious concern over a provision that would only extend some loan limits, and not others, that are guaranteed, in one form or another, by the United States government.

For several months, I have been advocating for a temporary extension, and now a restoration and temporary extension, of the Government Sponsored Enterprise, GSE, conforming and Federal Housing Administration, FHA, loan limits. GSE conforming and FHA loan limits were increased in 2008 to stabilize the housing market during the economic crisis, and fill a gaping void left by retreating private financial institutions. Unfortunately, the housing market remains troubled and the painful cycle of defaults, distressed sales, foreclosures, and price declines has caused a severe delay in our economic recovery. Even now, private lenders remain incredibly risk-averse, hesitating to provide long-term, fixed-rate mortgages to the vast majority of the market. Until Congress decides how to move forward with broad reform to fix our broken housing finance system, we should not dismantle the few remaining support systems that are preventing the housing industry from collapsing further.

For these very reasons, I introduced H.R. 2508, a bill that would have extended both sets of loan limits for two fiscal years after their expiration on October 1, 2011. Doing so would have given certainty to housing and financial market participants and allowed enough time for Congress to thoughtfully consider broad reform legislation. Unfortunately, Congress chose not to act on my legislation, nor implement any other legislation that would have extended the loan limits out.

Since then, I and many of my colleagues in Congress have received countless calls from frustrated constituents in our districts who are now unable to transact in the housing markets due to the inability to find a private lender willing to finance them. Just yesterday, new data was released on housing market activity in October showing that home sales are down an average of 20 percent in some markets from a year earlier in the segment of the market that was relying on these higher loan limits. In my home district, sales of homes in this market segment fell by 71 percent since September.

As amended by the Senate, H.R. 2112 would have extended both sets of loan limits and mitigated costs to the taxpayer by increasing the guarantee fees assessed on larger loans. However, the compromise made by the Conference Committee to only restore the loan limits for mortgages guaranteed by FHA is a half-measure and one that ignores the tremendous need for restoration of the conforming loan limits. While this is better than no extension of either loan limit, it is not the compromise we should have made. The nature of FHA's guarantee is inherently different than that of the GSEs, the former being more expensive to the taxpayer. Historically, FHA-guaranteed loans have been a narrowly targeted subsidy, a state to which I would like to see FHA eventually return. However, by extending only the FHA loan limits now, we are essentially granting FHA a complete monopoly in this market segment at a time when the FHA is under considerable stress. Independent actuaries have estimated a 50 percent chance that the agency will need a federal bailout of its own in the coming year as it continues to draw down its reserves in a deflating housing market.

It's with this in mind that I will cast my vote in favor of H.R. 2112, but do so with significant reservations.


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