House Proceeding 05-07-09 on May 7th, 2009 :: 0:51:10 to 1:11:10
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0:49:50 to 0:51:10( Edit History Discussion )
Speech By: Spencer Bachus

0:50:50 to 0:51:10( Edit History Discussion )

Spencer Bachus: and vulnerable homeown i close by saying i urge my colleagues to vote yes. the chair: the gentleman's time has expired. the question is on the amendment offered by the gentleman from alabama. those in favor say aye. those opposed, no. in the opinion of the chair, the ayes have it.

0:51:11 to 0:51:31( Edit History Discussion )

Ed Perlmutter: the amendment is agreed to. it's now in order to consider amendment number 4 printed in house report 111-98. for what purpose does the ntleman from colorado rise? mr. perlmutter: mr. chairman, i have an amendment at the desk. the chair: the clerk will designate the amendment. the clerk: amendment number 4 printed in house report 111-98

0:51:25 to 0:54:00( Edit History Discussion )
Speech By: Ed Perlmutter

0:51:32 to 0:51:52( Edit History Discussion )

Ed Perlmutter: offered by mr. perlmutter of colorado. the chair: pursuant to house resolution 406, the gentleman from colorado, mr. perlmutter, and a member opposed each will control five minutes. the chair recognizes the gentleman from colorado. mr. perlmutter: thank you, mr. chairman. the amendment that i propose to the house today is two-fold.

0:51:53 to 0:52:15( Edit History Discussion )

Ed Perlmutter: first part deals with a section of the bill that provides 90 days for tenants to stay in a home or in an apartment house that's been foreclosed upon. the purpose of this amendment and it's very narrowly drawn is only as to those properties that are owner occupied homes

0:52:16 to 0:52:36( Edit History Discussion )

Ed Perlmutter: where the owner has covenanted with the lender that they're going to occupy the house what happens is often the owner moves out, leases the property to someone, foreclosure begins, the lender has no chain of title, no connection with this particular tenant nor is there

0:52:37 to 0:52:57( Edit History Discussion )

Ed Perlmutter: any expectation that there would be a tenant because the owner said i'm going to live there under the law today, there is no additional time beyond the foreclosure for a pers that owner-occupied house.

0:52:58 to 0:53:19( Edit History Discussion )

Ed Perlmutter: under the bill that's proposed, that timeline is extended to 90 days beyond the foreclosure. my amendment shrinks that back to 30 days so it's 30 days more than the law allows today but less than what's proposed in the bill because the lender has never had any dealings with that particular tenant.

0:53:20 to 0:53:40( Edit History Discussion )

Ed Perlmutter: this is not like a multi-family apartment house where the lender expects that there are going to be tenants or an investor type of a loan where the lender expects a tenant to be in place. . so i have asked to shrink it down to 30 days. that's the first part of the amendment. the second part of the amendment

0:53:41 to 0:54:00( Edit History Discussion )

Ed Perlmutter: is something i talked to mr. miller about which is to clarify the language about when acceleration of a loan can occur. now what we have said is acceleration occurs upon a default in sale clause or material violation in the contract. so those are the two sections of

0:54:01 to 0:54:21( Edit History Discussion )

Keith Ellison: this amendment. with that i reserve the balance of my time. the chair: the gentleman reserves the balance of his time. for what purpose does the gentleman from minnesota rise? mr. ellison: to claim the time in opposition. the chair: the gentleman is recognized for five minutes. mr. ellison: let me thank my

0:54:05 to 0:57:05( Edit History Discussion )
Speech By: Keith Ellison

0:54:22 to 0:54:43( Edit History Discussion )

Keith Ellison: friend from colorado who has worked diligently. he was an excellent legislator, fine lawyer, and i think still is licensed to practice law. it's a pleasure to working with him. on this issue unfortunately we don't see it the same. and i ink that the 0 -- 90-day provision is fine and should remain in the bill as it exists now. tout down by 60 days the opportunity for a renter to find

0:54:44 to 0:55:04( Edit History Discussion )

Keith Ellison: a new place to live after they may have done nothing wrong, made every payment, paid every penny on time, really is not fair and is not good for policy. the fact is, is that when a house goes into foreclosure, that home is best -- that neighborhood and that home are best preserved by keeping the occupant in there.

0:55:05 to 0:55:25( Edit History Discussion )

Keith Ellison: if they are required to leave after just 30 days, which is very, very fast, that means tt we could end up with an empty building where it is subject to copper strippers, it will be a nuisance for people who want to commit perhaps crime. it will be a bad situation and we know that

0:55:26 to 0:55:46( Edit History Discussion )

Keith Ellison: once a house goes into foreclosure and then is not occupied, that is a direct blow to the property values of people who live everywhere in the neighborhood. so this provision, this 90 days actually makes a lot of sense. it should stay in harmony the bill as it exist answer not be reduced. i will acknowledge appreciation that the author of this amendment does allow for 30 days.

0:55:47 to 0:56:08( Edit History Discussion )

Keith Ellison: i appreciate that. but i think it should be more. it should be the 90 days that is already there. this amendment if adopted would work to penalize the one person who has not had anything to do with the foreclosure crisis. they were not party to the foreclosure. they were not party to the mortgage in the

0:56:09 to 0:56:29( Edit History Discussion )

Keith Ellison: they weren't party to the securitization, nor did they engage in any perfect rif tiffs or -- derivatives or anything like that. the tenant who may have been paying every month, month after month has no control or responsibility over the owner

0:56:30 to 0:56:51( Edit History Discussion )

Keith Ellison: who may have conditions of the mortgage agreement and this extra 60 days that the existing bill provides lender. let me just also say, the fact is is that the individual -- this is not just an individual

0:56:52 to 0:57:06( Edit History Discussion )

Keith Ellison: to take a very legalistic view of they are not in the chain of title therefore they are out, ignores the fact that this problem of foreclosures has spread across the nation, is a community problem, is a problem

0:57:07 to 0:57:27( Edit History Discussion )

Ed Perlmutter: ever everyone not just a narrow fixed party to party agreement. and therefore there needs to be a solution that takes into consideration a broader interest as well. i will yield back the balance of my time. again i thank the gentleman from colorado. i reserve the balance of my time and again thank the gentleman from colorado for his diligent work on this issue. the chair: the gentleman reserves the balance of his time.

0:57:10 to 0:59:30( Edit History Discussion )
Speech By: Ed Perlmutter

0:57:28 to 0:57:48( Edit History Discussion )

Ed Perlmutter: the gentleman from colorado. mr. perlmutter: i'd ask my friend from minnesota whether he has any other speakers. if not i have the right to close on my amendment. mr. ellison: mr. speaker, i heard i had the right to close. the chair: the gentleman from minnesota actually has the right

0:57:49 to 0:58:10( Edit History Discussion )

Ed Perlmutter: to close. the gentleman is the manager opposed to the amendment. mr. perlmutter: learn something every day. i would say to my friend from minnesota i appreciate your comments. although i would disagree with you. when it comes to a situation where tenants are expected to be

0:58:11 to 0:58:31( Edit History Discussion )

Ed Perlmutter: in a property, whether it's a multifamily apartment house or -- something where there is this expectation on the lender, i would agree with my friend's points. not here. not where there's been a convenant that it's going to be owner occupied. often that convenant comes along with a reduction in the interest rate. there is consideration for it.

0:58:32 to 0:58:52( Edit History Discussion )

Ed Perlmutter: i appreciate your point about not being too narrow and legalistic, but this is an important point. and it's one that is -- deals with the contract itself and the sanctity of the contract. secondly, the lender may not have somebody else who is ready to come in and buy, but there are a lot of people who want to buy these homes, too, i would

0:58:53 to 0:59:15( Edit History Discussion )

Ed Perlmutter: say to my friend from minnesota, and they shouldn't be deprived from the opportunity to purchase them. the lender may want to continue to lease it out to the individual who is there. so there are a number of reasons why at 30 days i think we are giving substantial time to the -- these individuals. that should be the cutoff date. i would also remind my friend

0:59:16 to 0:59:30( Edit History Discussion )

Ed Perlmutter: that in the manager's amendment mr. filner has an amendment that's part of it that gives notice to the tenant at the outset of the foreclosure that something's going on with the property. so that there is not a surprise.

0:59:31 to 0:59:52( Edit History Discussion )

Keith Ellison: i would urge a yes vote on the perlmutter amendment for both parties -- it's only one amendment. i would urge a yes vote. i yield back the balance of my time. the chair: back the balance of his time. the gentleman from minnesota. mr. ellison: let me just point out that tenants are hard hit by this foreclosure crisis. even thoughhe mortgage is not their responsibility.

0:59:35 to 1:00:30( Edit History Discussion )
Speech By: Keith Ellison

0:59:53 to 1:00:14( Edit History Discussion )

Keith Ellison: as of february, 2009, at least 20% of the properties in foreclosure were rental properties and roughly 40% of the families facing eviction due to foreclosure are only seven states and the district of columbia provide clear protection for tenants. the fact is that if this amendment is adopted it will add to the pain of some tenants.

1:00:15 to 1:00:31( Edit History Discussion )

Keith Ellison: when we don't have to do it and the 90 days in the bill is more than adequate and 30 days is too short. we will put pressure on our homeless shelters if we adopt this amendment. we will put pressure on families who really had no part in making

1:00:32 to 1:00:55( Edit History Discussion )

Mike Ross: this foreclosure crisis occur. i yield back. i thank my friend from colorado. the chair: back the balance of his time. the question is on the amendment offered by the gentleman from colorado. so many as are in favor say aye. those opposed, no. in the opinion of the chair, the ayes have it. the amendment is agreed to. it is now in order to consider amendment number 5 pnted in

1:00:35 to 1:01:15( Edit History Discussion )
Speech By: Mike Ross

1:00:56 to 1:01:15( Edit History Discussion )

Mike Ross: house report 111-98. for what purpose does the gentleman from texas rise? mr. hensarling: mr. chairman, i have the chair: the clerk will designate the amendment. the clerk: amendment number 5, printed in house report numr 111-98 offered by mr. hensarling of texas. the chair: pursuant to house resolution 406, the gentleman from texas, mr. hensarling, and a member opposed each will control five minutes.

1:01:16 to 1:01:37( Edit History Discussion )

Jeb Hensarling: the chair recognizes the gentleman from texas. mr. hensarling: thank you, mr. chairman. the subject of mortgage reform is a very serious subject. and although there are certain laudable aspects of the underlying legislation, i fear that although it is aerious subject, it is difficult to take

1:01:20 to 1:05:45( Edit History Discussion )
Speech By: Jeb Hensarling

1:01:38 to 1:01:58( Edit History Discussion )

Jeb Hensarling: the legislation seriously. how can you have mortgage reform when you leave out the single biggest root cause of the economic debacle we find ourselves in, a that is reform of fannie and freddie? how can you seriously deal with mortgage reform and be absolutely silent to at least

1:01:59 to 1:02:20( Edit History Discussion )

Jeb Hensarling: half of the fraud equation and that is those who lied about their income, lied about their occupancy, lied about their net worth? the underlying legislation, mr. chairman, unfortunately, is going to eure that consumers lose their choices. it will make interest more

1:02:21 to 1:02:41( Edit History Discussion )

Jeb Hensarling: expensive. it will protect, protect, a term we hear from our friends on the other side of the aisle, protect people out of their homes and effectively take away the american dream for millions and millions of americans. now, we nd effective disclosure. we need effective policing of fraud and misrepresentation. we also need some personal

1:02:42 to 1:03:05( Edit History Discussion )

Jeb Hensarling: responsibility and we need to quit bailing out failed institutions and we shouldn't force people who are struggling to pay their own mortgages to pay their neighbor's as well. mr. chairman, one particularly bad and onerous aspect of this legislation is sometng called assignee liability.

1:03:06 to 1:03:26( Edit History Discussion )

Jeb Hensarling: what this means is is that once the mortgage is entered into, that those who secure advertise the mortgage -- securitize the mortgagethose who may invest in the mortgage, all of a sudden new legal liability will attach to them as well. the bill introduces legal liability for the originator. doesn't introduce any new legal

1:03:27 to 1:03:47( Edit History Discussion )

Jeb Hensarling: liability on behalf of the borrower. but it introduces new legal liability saying that with respect to refinancing that there must be a quote-unquote net tangible benefit. if the lender fails this standard, he has legal liability. on all financing there must abquote-unquote reasonable ability to pay, unquote. what are these -- what do these standards mean?

1:03:48 to 1:04:08( Edit History Discussion )

Jeb Hensarling: net tangible benefit. if somebody decides to take refinance, take equity out of their home, and start a small business, is that a net tangible benefit? or does it appear on how successful the small business is? how about if an individual refinances their home, they take out equity, and they decide to put a swimming pool in the

1:04:09 to 1:04:30( Edit History Discussion )

Jeb Hensarling: backyard. well, maybe that's not a net tangible benefit, maybe it is, maybe it isn't. i don't know. maybe they refinanced because in their particular situation they need a lower monthly payment. but yet they are willing to pay a larger sum. is that a net tangible benefit? i would be happy to yield to anybody on the other side of the

1:04:31 to 1:04:51( Edit History Discussion )

Jeb Hensarling: aisle who could tell me if those examples constitute net tangible benefits. hearing nobody on the other side of the aisle take me up on it. it proves my point, we don't know what these terms mean. nor do we know what reasonable ability to pay. all of a sudden if a lender fegs

1:04:52 to 1:05:12( Edit History Discussion )

Jeb Hensarling: out there is a tragic die vs. -- divorce going on in family does he have a legal obligation to deny homeownership opportunity because there is no long' reasonable ability to pay? how about if somebody has the tragic discovery they have breast cancer? all of a sudden is there a legal obligation that maybe, maybe this person can n longer have a reasonable ability to pay?

1:05:13 to 1:05:33( Edit History Discussion )

Jeb Hensarling: we don't know what these legal standards are, mr. chairman. and so now they are getting passed on to assignees, these fuzzy, muddy, cloudy amore fuss terms. it's a plaintiff's lawyers dream so we'll have an explosion of liability exposure. why would people want to invest? why would people want to securitize?

1:05:34 to 1:05:45( Edit History Discussion )

Jeb Hensarling: when people invested in the stock victims. they weren't the victimizers. now all of a sudden we are turning this on their head. at the end of the day there is

1:05:46 to 1:06:06( Edit History Discussion )

Melvin L. Watt: going to be less mortgage money available to anybody who wants to have their american dream realized. i reserve the balance of my time. the chair: for what purpose does the gentleman from north carolina rise? mr. watt: to claim time in opposition to the amendment. the chair: the gentleman is recognized for five minutes. mr. watt: thank you, mr. chairman. i keep waiting on the gentleman to addressis proposed

1:05:50 to 1:08:30( Edit History Discussion )
Speech By: Melvin L. Watt

1:06:07 to 1:06:28( Edit History Discussion )

Melvin L. Watt: amendment. i haven't heard anything about the proposed amendment. i want to address the points that he addressed since he wants to have a general debate. first of all he says he can't support this bill because we didn't deal with fannie and freddie. that's kind of like me saying

1:06:29 to 1:06:49( Edit History Discussion )

Melvin L. Watt: i'm not going to vote for the earned income tax credit because it doesn't deal with all of what caused poverty in america. you can't deal with every subject in every bill. we passed a bill that has dealt with fannie and freddie. been sitting over there in the

1:06:50 to 1:07:10( Edit History Discussion )

Melvin L. Watt: senate for a long time. and we are going to pass some other legislation to deal with fannie and freddie at some point. but it's not addressed in this bill just like the whole totality of poverty is not addressed when we passed an earned income tax credit or when

1:07:11 to 1:07:31( Edit History Discussion )

Melvin L. Watt: we passed health care or -- that's just a nonsec which ter -- none sec which ture as far as i'm concerned. we didn't deal with disclosure so i'm not going to vote for the bill. everybody in america that got a loan that's in

1:07:32 to 1:07:53( Edit History Discussion )

Melvin L. Watt: everybody who is in default now got full disclosures of what the terms of their loans were. . and they were i prevent the kind of predatory lending and policies that this bill addresses.

1:07:54 to 1:08:16( Edit History Discussion )

Melvin L. Watt: so i don't know what the gentleman's talking about when he says we didn't deal with disclosure. we intenonally didn't deal with disclosure because we acknowledge that disclosure and telling people that we're giving you a bad loan is not enough to protect them any more than

1:08:17 to 1:08:31( Edit History Discussion )

Melvin L. Watt: disclosure that a doctor may not be the best doctor in america is going to stop people from going to the doctor. so now that i've dealt with

1:08:32 to 1:08:53( Edit History Discussion )

Jeb Hensarling: those, mabel's want to address the amendment itself. and i will reserve the balance of my time to address the amendment. the chair: the gentleman from texas. mr. mchenry: i thank you, -- mr. hensarling: i thank you mr. chairman. i didn't say i wasn't supporting it for t

1:08:35 to 1:09:30( Edit History Discussion )
Speech By: Jeb Hensarling

1:08:54 to 1:09:14( Edit History Discussion )

Jeb Hensarling: hard to take it seriously. at the end of the day, mr. chairman, what's going to happen is that we have functionally outlawing certain types of loans here and we kn particularly subprime with ese standards, applying them to securitizers

1:09:15 to 1:09:31( Edit History Discussion )

Jeb Hensarling: and investors, you are outlawing them. it hurts people, a taylor family, said if it wouldn't have been for subprime lending, i wouldn't have owned a home. these people still ought to have an opportunity to realize their

1:09:32 to 1:09:52( Edit History Discussion )

Brad Miller: american dream and wought to quit protecting them out of their homes. i urge adoption of the amendment. the chair: the gentleman's time has expired. the gentleman from north carolina. mr. watt: how much time remains? the speaker pro tempore: -- north carolina has 2 1/2 minutes

1:09:35 to 1:10:55( Edit History Discussion )
Speech By: Brad Miller

1:09:53 to 1:10:13( Edit History Discussion )

Brad Miller: remaing. mr. miller: mr. hensarling has said in the course of addressing the body, can anyone tell me what the tangible benefit is and says, hearing nothing, they must not have an answer. i don't want to leave people

1:10:14 to 1:10:34( Edit History Discussion )

Brad Miller: watching on c-span, the reason we didn't hop up, we said what did he jussay. that is based on a rule of law and securities law that gives making transactions in a stock market account just to generate

1:10:35 to 1:10:56( Edit History Discussion )

Brad Miller: fees for the broker. this is coming back to a homeowner and refinance into create more fees in the mortgage system, to refinance so he can get the homeowner deeper and deep

1:10:57 to 1:11:21( Edit History Discussion )

Melvin L. Watt: the bill gives the regulatory authorities the banking authorities to say what a tangible benefit it. champlete the gentleman's time has expired. the gentleman from north carolina. mr. watt: i now would like to address the gentleman's amendment, which he still never has addressed. i acknowledgedrom the very beginning that we walk a

1:11:00 to 1:12:50( Edit History Discussion )
Speech By: Melvin L. Watt