Congresswoman Waters Supports Financial Recovery Legislation
The U.S. House of Representatives today passed the Emergency Economic Stabilization Act (H.R. 1424) by a vote of 263 to 171. The legislation reinvests in the troubled financial markets to stabilize the economy and reforms how business is done on Wall Street by implementing strong oversight and limiting excessive compensation. H.R. 1424 also provides tax relief for families, businesses and communities.
Congresswoman Maxine Waters (D-CA), who serves as a member of the House Financial Services Committee and chairs the Housing and Community Opportunity Subcommittee, spoke in support of the legislation, focusing her remarks largely on how it helps American homeowners. A copy of Congresswoman Waters' floor statement follows:
I rise in support of H.R. 1424. I voted for the financial rescue legislation that came before us on Monday because I believe that the economy is in a perilous situation, with the credit markets in real danger of seizing up. This is still the case, and we must act or average Americans will suffer: To give a concrete example of how the tightening credit market is affecting consumers, the nation's largest Chevrolet dealer went out of business on the very day this chamber rejected the previous version of this legislation, because its customers could not get access to financing for auto loans.
Simply put, we must now pass H.R. 1424, a bill that reflects additional Senate input into the legislation we previously considered, including incentives to develop alternative energy and help lessen our nation's dependence on foreign oil.
I want to speak briefly about a concern that many are expressing about this legislation, namely, that there is nothing in it for homeowners. This is simply not true. In fact, H.R. 1424 does a lot to help homeowners. Let me be specific. This legislation will increase loan modifications for distressed borrowers and therefore prevent foreclosures and help homeowners remain in their homes.
In cases in which the Secretary of the Treasury or another agency such as the FDIC owns or controls the entire mortgage, the Secretary must facilitate reasonable loan modifications. In other words, where the federal government calls the shots on servicing the mortgage, it has to execute loan modifications to prevent foreclosure wherever possible.
In cases where the Secretary or another agency partially owns a mortgage, the Secretary must work with servicers to modify the loan under the recently enacted Hope for Homeowners program. Hope for Homeowners is an important new program that enables lenders to obtain an FHA guarantee for certain distressed loans in return for a substantial reduction in the principal, helping the borrower to refinance and remain in the home. (This program should not be confused with the HOPE NOW Alliance, the industry initiative that has clearly been inadequate to stem the foreclosure crisis.) H.R. 1424 takes an additional important step by permitting refinancing before a loan resets. In addition, the Secretary has the authority and means to make sure servicers have the capacity to execute loan modifications. He could establish a loan program to provide capital to help servicers who otherwise might move quickly to foreclose because they cannot afford to keep making payments for delinquent borrowers.