Christopher Dodd

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that the Senate proceed to the immediate consideration of S. Res. 129, submitted earlier today.

Mr. DODD. Mr. President, I ask unanimous consent that the resolution be agreed to, the preamble be agreed to, the motions to reconsider be laid upon the table, with no intervening action or debate, and any statements related to the resolution be printed in the Record.

Mr. DODD

Mr. DODD. Mr. President, I note the absence of a quorum.

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. DODD

Mr. DODD. Mr. President, I am going to take a few minutes to explain. I know the leadership has already made these announcements, but as I have been told, at 5:30 there will be two votes on amendments offered by our colleague from Louisiana, Senator Vitter. I am going to take a few minutes here, once again, to review the underlying proposals Senator Shelby of Alabama and I have crafted as part of this bill. Then I will take a few minutes to express my views on the two Vitter amendments. I presume Senator Vitter himself may come over and talk about this or others who are interested in the two amendments may show up to express their interest in them as well. I thank the majority leader, Senator Reid, for scheduling the time for the consideration of this bill. Obviously, the importance of foreclosure mitigation is still critical. I still believe, as many do, that the root cause of our financial problems in this country began with the residential mortgage market, the predatory lending that went on with literally millions of people in this country. The Wall Street Journal reported that some 60 to 65 percent of people who were talked into predatory loans, subprime loans, actually qualified for conventional mortgages. Conventional mortgages are far less costly than subprime mortgages, but because there was a greater financial reward for brokers and others who were able to market and sell the subprime mortgages, they were marketed to people. Of course, those mortgages became far more costly. There were adjustable rate mortgages, there were teaser rates with almost no downpayments required and very little interest payments for months on end and then, of course, ballooning to the point that many people could ill-afford them. For many, they could not the afford them at all, to the point that problem migrated to other areas of our economy. As a result, today we find ourselves in a recession, and a deep one at that. This bill is designed to help families save their homes. That is what it is designed to do. There are a lot of provisions that relate to the smaller banks in the country and how we can be of some help to them to get credit moving. I did this last week at the close of business, but I thought I would spend a few minutes to review, once again, the major provisions of the bill without going into great detail as to what is included in each provision and then, as I said, address the two Vitter amendments that will be offered later this afternoon. This amendment we have offered is a substitute amendment that Senator Shelby and I have before us now, which is S. 896. It expands the number of tools available to try to prevent foreclosures and the ability of homeowners and loan servicers to use those tools. In addition, the bill includes provisions to make the banking system more stable and improve the availability of credit. Specifically, there are about 8 or 9 or 10 major provisions of the bill. The first of these provisions expands the ability of the Federal Housing Administration in rural housing to modify loans. I made the point last week that this is absolutely critical. FHA has been a savior in many cases, providing credit when credit has not been available elsewhere to keep a limited housing market open. It is very important that they have the tools to do that--certainly the tools to modify FHA or USDA loans, as they do for non-Government loans they service. This part of the bill is one that is critically important and can make a huge difference to people. There will be amendments offered to modify this provision of the bill. If we end up undermining the role of the FHA at this critical time, we can make it far more difficult for these foreclosures to be mitigated and decrease the possibility of people remaining in their homes. Second, it expands access to the HOPE for Homeowners legislation, which makes a number of changes to that bill we adopted last summer. It was a program that was well intended but left a lot of problems in terms of the effectiveness and efficiency of the legislation. This bill will allow for the option to lower fees and streamline the borrower certification requirements. We give the Secretary of the housing agency in our country limited discretion to determine the amount and distribution of future appreciation. We ban the very wealthiest in our country from being involved in this program. It was never intended to be such. We allow for incentive payments to servicers and originators who participate in the program. Again, it is something designed to be of help to the average citizens, working families in this country. Third, we create more enforcement tools for the FHA to eliminate bad lenders. This was an important provision that provides the tools to the housing and urban development agency to more expeditiously drop lenders that break FHA rules. This was needed to strengthen those provisions and make sure resources go to the areas that need them. They are certainly not to be used by lenders who are violating the rules of FHA. We then provide for a safe harbor for servicers who would either modify a loan consistent with the Obama foreclosure mitigation program or refinance the borrower into a HOPE for Homeowners loan. This has been a contentious issue between bankers and investors, trying to do something with regard to mitigation. This has been narrowly drawn. The House-passed bill--and I say this respectfully of the other body--had a broad provision in this area. This was an idea Senator Martinez offered a number of weeks ago. He has since modified this--and I agree with him--to try to restrict time, duration, and circumstances in which a safe harbor would apply. What is a safe harbor? A safe harbor is designed to encourage the servicers to modify loans, servicers who have had contracts with investors. The investors obviously are somewhat reluctant to watch a modification of any of these things that would deprive them of the ability to take legal action against a servicer who engaged in a modification creating a safe harbor for the servicer. We encourage them--it doesn't mandate but encourages them to modify those loans with the borrower, in the absence of which I doubt any servicer will be willing to step forward do so. So this is an absolutely critical area. While there are still concerns on the part of some, I believe it is the right step to be taking. It is limited in duration. It is limited to only the Obama foreclosure mitigation and the HOPE for Homeowners, only in those two instances, and therefore would not be as open and broad-based as provisions that have been adopted elsewhere. So I encourage my colleagues to be supportive. There will be an effort to change this in a way that I think would make it unworkable in terms of achieving the desired results here. Again, with 10,000 foreclosures going on every single day in our country, we need to try to bring closure to that problem where we can. This is not going to solve every foreclosure, but it can certainly make a huge difference. An estimated 1.7 to 2 million foreclosures can be avoided with this kind of proposal in the bill. With the Obama proposals and HOPE for Homeowners proposals, we think that would make a significant difference, allow people to stay in their homes, and allow the lenders to get some payment back rather than the property falling into foreclosure. As the Presiding Officer knows, the contagion effect of a foreclosed property in a neighborhood is very daunting. We know for a fact that with one foreclosure in a neighborhood of a one-square-block area, the value of every other property in that square block declines by as much as $5,000 that very day. The last thing you want to see on your block, in your neighborhood, is foreclosed, boarded-up properties deteriorating. If you have a home there and that property is declining in value by the day, obviously everyone is adversely affected. So while I know this is a contentious issue for some, I am pleased that most of the consumer groups, the realtors, the Financial Roundtable, and others strongly support the provisions Senator Shelby and I have in this bill when it comes to the issue of safe harbor. Again, I thank Senator Martinez, my colleague from Florida, for initiating the idea of this proposal. The next provision authorizes an additional $130 million for foreclosure prevention activities. Senator Reid is the author. I mentioned earlier that his support in creating the space and time for this bill to come up has been critically important but also the addition of this language which we now know is terribly effective. Earlier, Senator Schumer and others offered language to provide resources for the support of the prevention activities; that is, counseling activities. It proved very helpful. These can be complicated areas. To get into the issue of modifying a mortgage requires some good counseling. This is not a matter where the average person can just walk in and negotiate by themselves. I think having people who are experienced and knowledgeable, as we now have across the country, who can assist in this process, has been a great asset. These additional resources Senator Reid of Nevada has offered here will make a huge difference for people across our Nation, in addition to what has already been allocated. Then we have some provisions to increase the deposit insurance with the Federal Deposit Insurance Corporation from $100,000 to $250,000. I mentioned earlier how important that is to people to avoid the kinds of runs that can occur when fear grips investors and depositors. Certainly, those who have even a passing knowledge of history, of the Great Depression, know what happened when fear gripped the country and there were great runs on the banks, people running and taking their deposits out of the banks, feeling as though they were going to lose them, and the old notion of hiding it in your mattress was not a joke; people actually did that. They buried their hard-earned money on their property rather than keep it in what they perceived as an unsafe institution where they could lose those resources. So back in the 1930s, the FDIC was created to provide, among other things, an ability, when a bank is in trouble, to make that transition from a closed bank to one that could open so the people would not loose their resources, as well as providing insurance so that money would not be lost, a full guarantee of up to $100,000. The world has changed a lot since the 1980s, which is when I believe that provision, the $100,000, was added, over the last 29 or 30 years. Raising it to $250,000 we believed was necessary to assist, providing further guarantee and assistance as well. We increased borrowing authority in this bill for both the FDIC and the National Credit Union Administration, from $100 billion in the case of the FDIC and $6 billion for the National Credit Union Administration. There is additional authority that requires the approval of a two-thirds vote of the FDIC or National Credit Union Administration, a two-thirds vote of the Federal Reserve Board, and agreement by the Secretary of Treasury in consultation with the President of the United States. We stretch out the payment of assessments to rebuild bank thrift and credit union deposit insurance funds to 8 years. This was a very important provision; for many of our lending institutions, that period of assessment is absolutely essential. If it is too short, it obviously puts a huge financial burden on these institutions. I believe the 8 years was a provision that was very important to these institutions and one that they are very pleased our legislation includes. I hope that will work as well as we intend it to. We also improve the FDIC systemic risk special assessment authority. Again, that is a real relief to institutions that would not participate in that program, that would have been assessed anyway. This provision of the bill protects them from that kind of assessment. Again, it is essentially important. That is a very quick review of the major provisions of the bill. As I mentioned earlier, this legislation enjoys broad-based support in our country, from major groups of people from major consumer groups in our Nation: The National Consumer Law Center, the Independent Community Bankers, the Center for Responsible Lending, along with the Housing Policy Council, the Financial Services Roundtable, the American Bankers Association. Rarely do I find these organizations coming together around a bill. You will normally have the consumer groups on one side and your financial services sector on the other side. That is normally how it works. But because of the effort made by so many people on our committee and elsewhere, we have put together a piece of legislation which we think will make a difference on foreclosure, provide some needed reform to our major financial institutions, provide counseling and additional support for people who seek that kind of help, as well as attract the kind of support from diverse institutions that watch and care very much about these groups. Last week I included letters of support. I should add as well that Lenders One, an association of mid-sized independent mortgage brokers, and the Mortgage Bankers Association, have endorsed what Senator Shelby and I have put together in this bill. That is a rough summary of the legislation. Of course, anybody who is interested in further information about this, we would welcome them to come over and discuss any provision they have interest in. Let me, at this point, if I can, address the two amendments which this body will consider at 5:30. The first one I will discuss is the amendment of Senator Vitter of Louisiana No. 1015. This amendment, as I understand it--obviously Senator Vitter will come and explain his own amendment. I hope I am accurately describing it. Under the Emergency Economic Stabilization Act, currently it requires the Treasury to permit a TARP recipient to repay the financial assistance it receives subject to consultation with the appropriate Federal banking agency. When the assistance is repaid, the recipient must also buy back the warrants it provided to the Treasury at the current market price. As I understand the Vitter amendment, it would require the Treasury to permit a TARP recipient to repay TARP assistance it received if the institution would be ``well capitalized'' after repaying the funds. Capitalization of our lending institutions is a critical component, as the Presiding Officer knows, very important, certainly essential, before one would even consider, again, having TARP money come back, the whole idea of insisting upon properly capitalized institutions. Under the amendment, Treasury could not condition the right of a TARP recipient to repay TARP on an agreement to also buy back the warrants. Under the current law, payback of the TARP money must be accompanied by the repurchase of those warrants. In fact, the amendment gives the TARP recipient the right to determine when the Treasury must buy back the warrants it received; the TARP recipient is not required to pay market price for them. I oppose the amendment and urge my colleagues to vote against it, I say respectfully of the author of the amendment, Senator Vitter, a member of our committee. I am concerned this amendment, if adopted, would further destabilize our financial system and could harm taxpayers who, of course, are the ones who put up the TARP money. Under this amendment, the Treasury would be forced to permit a bank that received TARP money to repay that assistance based on the sole criterion that the bank would remain well capitalized. Again, I emphasize that is an important consideration, but it is not the only one. If there is one lesson we have learned from this crisis, the definition for what ``well capitalized'' means is inadequate. For example, Citibank and Bank of America are well capitalized according to the standard in the amendment, and despite their obvious troubles, they would be able to return the TARP money they received. The standard the amendment would establish is simply ineffective and not comprehensive enough. Currently, the regulators can consider the bank's condition in a more complete, holistic way in assessing its fitness to return TARP funds. The amendment would tie the hands of the regulators to this one particular factor, capital, a very important one but not the only one, a factor that has already proven to be faulty and insufficient to weather today's economic climate. To get out from under the executive compensation restrictions and other conditions imposed by Treasury, for example, institutions that are in a weakened condition may put themselves and the broader economy at risk. That is why this is important. If we are only talking about one institution, certainly getting the TARP money back is something we would all welcome. But I think we need to look at this beyond just what the effect is on that one institution but what is the effect of the overall financial system. That was the reason why these TARP dollars went out in the first place. So while being well capitalized is very important, if you limit it to that and that only and allow an institution, such as the ones I have mentioned, to then move beyond that, there could be put at risk the larger economy, which is, of course, the major goal here, to get the overall economy functioning and moving in the right direction. If banks were allowed to move in that direction merely on that basis alone, then I think we would regret that. Again, I think it is something we ought to be striving for, but this amendment is too narrow, in my view, to limit the decisions strictly on that one criterion. If lending is limited as a result of this amendment, that would mean more businesses closing for lack of financing, more job losses in our country, and a further weakening of the overall economy, delaying even further the recovery we all seek. It also would mean more foreclosures, which is at the heart of the bill. Foreclosed homes will stay on the market longer because people would not be able to get mortgages to buy these homes. As my colleagues know, the large banks have gone through the so- called stress tests. Many of them, despite being designated as ``well- capitalized,'' may still be forced to raise more capital, we are told. It strikes me as unwise that we want to tie Treasury's hands at this important time, right when the results of the stress tests are to be announced. The amendment would also harm the taxpayer by allowing the TARP recipient to decide when warrants may be exercised and by limiting the Treasury's ability to require the repurchase of warrants when TARP funds have been repaid. It also harms the taxpayer by eliminating the requirement that Treasury pay market price for the warrants and would allow banks to try to negotiate a better price, thereby reducing the returns to the taxpayers who put up the money in the first place. In conclusion, I would respectfully oppose this amendment. Current law already allows the banks to repay their TARP funding--in fact, we would encourage it--when it is the right time and safe to do so, examining an array of criteria, not just being well-capitalized. The quicker we can do that, the better off we are going to be. But it will be important that when some of these major institutions repay that, that in so doing they are not going to be jeopardizing the economy at large. The amendment, however, could cut credit availability at a time when credit is desperately needed; and could put more institutions at risk when stability is needed; and it is a bad deal, further, for the American taxpayer who, ultimately, is the one who put up the resources and hopes to get repaid when this economy begins to recover. Again, respectfully I say to my colleague and friend from Louisiana, I would oppose that amendment. The second amendment is No. 1017. This amendment deals with the Federal Housing Administration. The Vitter amendment would establish ``solvency'' as the ``primary foundational responsibility'' of the Federal Housing Administration, the FHA. The amendment then requires the Secretary to close down any FHA program if it seems ``reasonably likely'' that the FHA might need credit subsidy from Congress. Again, I oppose this amendment because it does exactly the opposite of what we ought to be doing at a moment such as this. We thank our lucky stars that we have the FHA providing credit at this time. In exactly a moment such as this, you need the FHA out there to provide that credit when credit is so unavailable through the clogged-up financial system in our Nation. First and foremost, this amendment fails to reflect the fact that the primary mission of the Federal Housing Administration is to help create and sustain home ownership for American families. The mission of the FHA is especially important now, while we are struggling through such troubled economic times. FHA currently insures nearly 30 percent of the mortgage market in our Nation. If you extend the logic that the amendment proposes, you would shut the doors of Fannie Mae and Freddie Mac right now because both have had to draw on their credit lines from the Treasury. Without them, we would lose the other 70 percent of the mortgage market overnight, turning a housing recession into a deep housing depression. In my view, if it were not for the Federal Government at this hour, working through FHA and other federally supported institutions, there would be no mortgage credit available at all. The FHA has a mission. It is to ensure that adequate and affordable mortgage credit is available in every part of our Nation. It is currently fulfilling that mission admirably, while many other sources of credit, as I mentioned earlier, have totally disappeared or almost completely disappeared. The Federal Housing Administration pushes against the prevailing downward winds in our economy. It is countercyclical. The Senator's amendment would turn the FHA into a procyclical program, withdrawing credit, pulling it back, when credit is so difficult to come by. This change would help deepen the worst housing recession we are experiencing since the Great Depression. Moreover, I think it is important to know that FHA fund is not at risk. As of the second half of the fiscal year 2009, the sum of FHA's investments and cash on hand is nearly $32 billion. Its net position, assets minus liabilities, on March 31 of this year, was a positive $11.8 billion. Although FHA's capital has fallen to 3 percent, it is still 50 percent above its statutorily mandated level of 2 percent. Falling capital in tough times is to be expected. That is what is going on. We all understand that. That is what you have capital for, to protect yourself in the bad times. In addition, it is important to remember that FHA has always been a fixed-rate mortgage insurer. It never got involved in the exotic and often predatory practices offered by the subprime lenders. FHA has also required income to be documented and verified. In fact, because FHA has been known for its solid loan products, more and more people with better credit quality are using FHA today. Over the past 6 months, the average credit score in FHA has increased by nearly 40 points. Finally, current law already establishes a fiduciary duty ``to ensure that the Mutual Mortgage Insurance Fund remains financially sound.'' The Secretary is already required to make program changes or adjust premiums if FHA's performance is expected to differ substantially from the baseline established by an independent actuarial report. Secretary Donovan has assured me and the Congress that the Congress would be immediately alerted if he thought the FHA was at risk at all. In short, I ask my colleagues, again, I say this respectfully of its author, to oppose this amendment. It is not needed. It would be exactly the wrong message, the wrong action to be taking at this critical time. Solvency is not an insignificant issue, but the role of the FHA is not to provide solvency, necessarily, but it is to provide credit at a time when credit is not available. When as many people as I have indicated by the facts are relying on the FHA at a time when we are trying to encourage home ownership on responsible terms--and the FHA, as I pointed out earlier, was not one of these exotic lenders that was out there with these predatory practices. Quite the contrary. So rather than, in a sense, changing the mission of the FHA, fundamentally altering what its goal is and ought to be at these times, we need to oppose this amendment. Again, we need to rely, as we can and must, on the fact that the FHA is in sound shape. If it is not for some reason, we have every reason to believe we can take improvement steps. Accordingly, again, I would urge our colleagues, when talking about both of these amendments, join me in opposing them, given the difficulty that both these amendments would raise if they were to be adopted. Again, I will be happy to be in the Chamber for the next hour or so. If people wish to come over and engage in a discussion or debate, I welcome that opportunity. But at 5:30, in a little more than an hour, we will have a vote on both these amendments of our colleague from Louisiana. Let me say, again, I think we assume this is personal in nature. It is not. I have respect for my colleague. We have a different point of view on matters. That is the nature of the institution and the debate that occurs. I don't question his motives or the sincerity behind his amendments, but I believe in both cases they would move us in the opposite direction from where we need to be going. With regard to TARP funding, all of us wish to get the TARP money back to the taxpayers as quickly as we can with interest. But we need to understand it is more than just capitalization when we make that decision. We don't want to do harm to our economy at a critical moment such as this. Secondly, with regard to FHA, solvency is important. The mission of FHA is, of course, to be countercyclical, not procyclical. At a critical time such as this, depriving them of that opportunity to fill a credit gap that does not exist today would be exactly the wrong message and do great damage to a critical component of home ownership. I yield the floor and suggest the absence of a quorum.

Mr. DODD. Madam President, I know this may confuse some people. I am going to call up a couple amendments for my colleague from Iowa, Senator Grassley. He cannot be here. I ask unanimous consent to temporarily set aside the pending amendments and call up amendments Nos. 1020 and 1021 on behalf of the Senator from Iowa, Mr. Grassley.

Mr. DODD. Madam President, let me just say that my offering these amendments should not necessarily indicate we have reached an agreement on these amendments. Senator Grassley's staff and our staff are working together to see if we can achieve an agreement on them. We hope we do. But certainly he has the right to raise those amendments, and I was more than happy to offer them on his behalf. With that, I suggest the absence of a quorum.

Mr. DODD. Madam President, I see my friend from Louisiana is here. I spoke earlier about my colleague's two amendments. I appreciate the spirit and motivation behind them. I will take a couple of minutes to review my concern about them. First, regarding Senator Vitter's first amendment, No. 1016, dealing with TARP money, I think we all would like money coming back sooner rather than later--getting to a point where these resources come back, with additional interest, to the extent that taxpayers can be made whole as a result of coming up with that money in the first instance and trying to bring stability to the financial markets. There is no debate about that. We agree about that. There was significant debate that occurred about whether there should be TARP money to begin with. It wasn't all one way. I supported it. I thought it made sense to try to stabilize our economy. I believe most believe that the decision made last September, early October, was the right one. In fact, had we not done that, we probably would have lost major lending institutions in the country over many months. Obviously, this administration inherited a good part of the problem, which didn't begin overnight, and it is trying to grapple with it in a holistic fashion, institution by institution. My concern with the amendment of my friend from Louisiana is this: He is absolutely correct that, again, if we have an institution that is well capitalized, that is a very important criteria in consideration of when these TARP moneys ought to be repaid. My concern is it is not the only criteria. We have major lending institutions, which I could make a case both in Citi and Bank of America, that are well capitalized but, frankly, they have other issues they are grappling with beyond being well capitalized. If that was the sole criterion, then we would be able to have the TARP money come back. Citi may want to do that, and Bank of America-- and I am not suggesting they do, but they may-- their problems could migrate very quickly to the larger financial problems with which we are trying to deal. On the one hand, I agree with the motivation, and that is we ought to try to get to the bottom of this as quickly as we can, get the TARP moneys back so the Treasury is replenished with these resources. On the other hand, if we do so prematurely solely on the basis of being well capitalized, we can end up compounding a problem that is already serious and making it far worse. For that reason, I urge this amendment be rejected. I say that respectfully to my colleague. I don't like getting up and opposing amendments for the simple reason of opposing them. There is a difference here, to have one criteria on which we would depend solely on the determination of returning these dollars, putting the larger issues at risk, I think would not be the right move to make at this point. Therefore, at the appropriate time I will ask for the amendment to be rejected. Regarding FHA--and, again, I find myself in the awkward position of not disagreeing with my colleague. Solvency is obviously an important issue. Had the rest of the lending institutions in the country been as prudent as FHA, we wouldn't be here talking about this larger problem. FHA never engaged in the exotic instruments that many others did in the subprime markets with teaser rates and no-doc loans, as they were called, or liar loans. FHA has been a well-run, prudent operation. Today, when very little credit is available for home mortgages, FHA is proving to be vitally important. Thirty percent of the mortgage market today is made up of FHA. If the goal of FHA is strictly the solvency of it--today it is 50 percent above statutorily what it is required to have on a cap of 2 percent, at 3 percent, less than 6 they had a while ago. Obviously, we have to keep an eye on this. But the law statutorily requires the Secretary of the Treasury to notify the Congress when, in fact, there is danger of FHA falling either at or below that 2-percent requirement. Again, solvency is not insignificant. If that becomes the criteria at a time when we need to be getting more credit out so we begin to get the housing market moving again, I think it is absolutely essential. If FHA is forced to close down just as it is needed most, making it procyclical not countercyclical--which is exactly what we need to be is countercyclical, not procyclical--then we would be turning the recession in the housing area into a depression, which none of us want to see happen. At this hour, it is very important that we keep FHA moving in that direction, watching, obviously, as my colleague from Louisiana suggests by his amendment, that solvency not be disregarded. Current statute already requires the Secretary to adjust programs that ensure FHA remains financially sound. In fact, like all housing- focused activities, FHA has lost money in this crisis, but it still has more capital than the law requires, and the quality of its borrowers is improving as we speak. That is to be applauded. At this very moment, were we to move away from FHA when so much of our housing market depends upon them, I think would be a step in the wrong direction. For that reason, I respectfully ask our colleagues to oppose this amendment. Again, I find myself in the awkward position of not disagreeing with what my colleague talks about in the case of both amendments; that is, getting TARP money back as soon as we can and that solvency is a critically important function at FHA. That is why the statute was written the way it was. I agree with him on those points. I am just concerned if in the first case we set a sole criteria of being well capitalized, and in the case of FHA if solvency is the only value, then we lose the value of FHA at a time when housing is having a hard time finding available credit. I yield the floor.

Mr. DODD. Madam President, I wish to add regarding the FHA amendment, for my colleague's information, joining me in opposing the amendment are the mortgage bankers, homebuilders, realtors, Lenders One--the people very involved in the residential mortgage market. I note they expressed a concern about the amendment. I suggest the absence of a quorum.

Mr. DODD. Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. DODD. Madam President, I think we are both prepared to waive that time. We have talked enough about the amendments, so I am prepared to waive that time and go right to the vote.

Mr. DODD. Madam President, I move to reconsider the vote, and I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. DODD. Madam President, I believe Senator Vitter and I are prepared to waive the 2 minutes equally divided.

Mr. DODD. Does my colleague want a recorded vote?

Mr. DODD. Mr. President, I move to reconsider the vote and lay that motion on the table. The motion to lay on the table was agreed to.

Mr. DODD

Mr. DODD. Mr. President, I compliment our colleague from Ohio for his eloquent statement. I think it is important that we all hear our colleagues as to what goes on in our respective States. I commend my colleague, who has had around 150 roundtables in his State where he has been listening to his constituents on a wide range of issues. I think we all benefit from his report on those meetings. I say to my colleague from Ohio, those responses you are hearing from your constituents in Ohio are not any different from what we are hearing from all across the country, as I know my colleague is aware. So we thank our colleague very much for that, and his comments on health care are very important.

Mr. DODD

Mr. DODD. Mr. President, in the absence of the majority leader, who will be here a little later, I have been asked to say that following leader remarks, the Senate will resume consideration of S. 896, a bill to prevent mortgage foreclosures and enhance credit availability. We hope to reach an agreement today on a finite list of amendments--the leader does. We have been working at that, I can say to the Presiding Officer, so we can complete the bill on Tuesday. There will be no rollcall votes today. Senators should expect the first vote on Monday to begin at approximately 5:30 p.m. Senators should note we could have more than one vote Monday evening. With that, I see my colleague from Oklahoma.

Mr. DODD. Mr. President, the pending business before the Senate is S. 896, the Helping Families Save Their Homes Act. I would like to take a few minutes and review the provisions of this bill that Senator Shelby of Alabama and I have offered in the form of a substitute. It is similar to the original bill, but there are some changes. We have been told there are somewhere in the neighborhood of a dozen amendments, maybe a little less, that our colleagues have proposed. We are trying to work out a finite list of amendments, to consider them on Monday, with the hope of getting to conclusion of this bill either by Monday or Tuesday--Monday may be a little optimistic but by Tuesday to be able to complete work before moving on to other business. This is a very important piece of legislation. Many of our residents and citizens are deeply concerned about the foreclosure problems. I have repeated the numbers over and over. I suspect many people are aware, but 10,000 people a day run the risk of losing their homes through default or the auction process. Those numbers have not been shrinking at all. In fact, there are estimates that the numbers may actually increase. We have tried over the last 2 years any number of steps to reduce and mitigate the foreclosure problem, including inviting the major lending institutions to step up and voluntarily talk about mitigation. That process began as early as the late winter of 2007 and the spring of 2007. Regretfully, those institutions did little or nothing to try to mitigate this problem. In fact, the previous administration refused to accept the magnitude of the problem, despite overwhelming evidence, even in early 2007, that the foreclosure issue was going to mushroom far beyond early predictions. Of course, that is exactly what has happened. Today, most analysts tell us that while there are a lot of elements that contributed to the present condition the economy is in, no one disagrees that a major source of economic hardship began with the residential real estate market. This problem will not be solved until we get to the bottom of it. While there are a lot of other issues to talk about, and we are doing that, until this issue of keeping people in their homes at rates and mortgages they can afford is resolved, this problem will persist. The legislation Senator Shelby and I offer, along with the support of committee members--and I note the Presiding Officer is a very distinguished member of the committee--is to try to offer some relief. I will explain briefly the provisions of the bill. I invite my colleagues to review it and, hopefully, be supportive on Monday or Tuesday when we try to reach final passage. We expand the ability of the Federal Housing Administration and rural housing to modify loans. Servicers of the Federal Housing Administration and rural housing do not have the same ability to modify these Federal Housing Administration or USDA loans as they do for non- Government loans they service. Our legislation authorizes the Department of Housing and Urban Development and the U.S. Department of Agriculture to give these servicers the opportunity and incentive to participate in the Obama Loan Modification Program or to otherwise modify the loans in ways that are not presently available to distressed homeowners, including reducing interest rates, reducing principal, or stretching out the terms of these Government-insured loans. This is a major provision of the bill. To be able to provide the FHA and USDA with the authority to expand these opportunities can bring a tremendous amount of relief to people under those programs. Secondly, we expand the access to the HOPE for Homeowners Act. This was legislation we adopted last summer. The legislation makes a number of changes to the HOPE for Homeowners Program to make it more user friendly and effective, including the option to lower fees, streamlining borrower certification requirements, giving the Secretary of Housing and Urban Development limited discretion to determine the amount and the distribution of future appreciation. It bans millionaires from the program and allows for incentive payments to servicers and originators who participate in the program. The HOPE for Homeowners Act that passed overwhelmingly here, while the intentions for the bill were high, the reality is, the bill didn't even come close to achieving the goals those of us who crafted it thought it would. We have listened to a lot of people over the last number of months as to what could be done to make the proposal more effective and efficient to reach more people. The proposals I have mentioned were the ideas we have accumulated that we believe, and others believe, should make the program far more effective. It will not solve all the foreclosure problems, but it will be a major step in the right direction. Thirdly, the bill creates more enforcement tools for the Federal Housing Administration to eliminate bad lenders. The bill empowers the Secretary of HUD to expeditiously drop lenders that break Federal Housing Administration rules, including, one, by authorizing the Department of Housing to go after lenders that break the rules but then withdraw from the program to avoid enforcement actions. We put a stop to that. We crack down on the misuse of FHA insurance issued on mortgages originated through unapproved third-party entities, and we authorize HUD to impose penalties on entities that misuse the Federal Housing Administration Ginnie Mae designations, another important housing program. Fourth, this bill provides a safe harbor for servicers who modify a loan consistent with the Obama plan or refinance a borrower into a HOPE for Homeowners loan. This is a somewhat controversial provision because we end up having a contest between investors and bankers. The problem is simply this: Even as more and more homeowners have fallen behind in their loans, the response of loan servicers has been inadequate to the issue. In part, their reason for not responding is because they fear they will be sued by investors or competing interests for doing so. The House of Representatives passed a very broad safe harbor provision, very similar to the one our colleague from Florida, Senator Martinez, offered and passed by a voice vote in this body as part of the Senate-passed stimulus bill several months ago. The provision was dropped in conference. The safe harbor provision in this bill is much more narrowly drawn than was the proposal by Senator Martinez. I thank him for it. He was very creative in offering the idea, but there were concerns raised that it was too broad, that we should make it more narrow in its application. So as to not disadvantage investors where they have a legitimate complaint and provide a safe harbor for those who don't deserve it, the safe harbor we crafted is much more narrowly drawn than the House provision or the one that passed the Senate in order to ensure that only servicers that provide modification consistent with the Obama plan get the benefit of the safe harbor. In addition, this bill ensures that the HOPE for Homeowners refinances are covered as well. That will not satisfy all of the investor community, but it is far better than what was in the House bill or previously authored. The fifth provision of this bill authorizes an additional $130 million for foreclosure prevention activities. We owe a special thanks to the majority leader, Senator Reid, for its inclusion. He has been consistent over the months that I have been involved in these issues since becoming chairman of the Banking Committee 2 years ago, along with Senator Schumer and others, about providing additional resources for counseling. This bill provides these additional moneys. We have found in the past that where consumers are aware of what is available to them and they get advice as to how to proceed, we are able to reduce the problems of people losing their homes. Once you are in the foreclosure legal web, it is very difficult to help people. Once you are in that court setting, it is hard. So the goal is to try to catch individuals who qualify for some assistance, who would qualify for some relief before they end up in the legal bureaucracy. That is why counseling services have been so valuable over the last number of months, because they have been overwhelmed by the amount of work. I know in my case, the head of my office in Connecticut, who has been with me for many years, literally every morning he arrives at work, he has e-mails--30, 40, 50 a day--from constituents seeking help because they fear they are about to lose their homes. I know other congressional offices as well as, of course, counselors are also being inundated with requests for help. Obviously, getting good counseling, good solid advice, is important. Senator Reid has provided a very valuable contribution to this legislation with this proposal. The sixth provision of this bill extends the $250,000 deposit insurance level for 4 years. Presently, that level would expire at the end of this year under an agreement reached earlier with the Chairperson of the Federal Deposit Insurance Corporation. Most people are aware that normally deposits are insured up to $100,000 per account. However, the Emergency Economic Stabilization Act increased coverage through the end of this year. This legislation extends the higher deposit insurance limit for banks, thrifts, and credit unions to the year 2013. Deposit insurance has been a stabilizing force in our banking system since its inception in 1933. It is worth noting that the Federal Deposit Insurance Corporation originated in the Depression years. There were three things done at that time that had as much to do with the 60 years of relative stability in our economy. One was the formation of the Securities Exchange Commission, which played a very valuable role in beginning to govern those markets and to prohibit or limit some of the wildcatting that went on that created in good part the Depression of the 1930s. Secondly was Glass-Steagall, which has been controversial with the separation of commerce and banking. We have begun to blur those lines. I was involved in that effort back a number of years ago when we dealt with the Community Reinvestment Act. Like everyone else in this Chamber, I suspect if we were all asked if we could have anything back and redo, I wish that was one we could go back and revisit. Candidly, it seemed reasonable at the time, the firewalls. But, frankly, I think we could have done a little more to protect and separate those activities. Third, in addition to the SEC and Glass-Steagall was the FDIC, the Federal Deposit Insurance Corporation--the run on banks. The very day Franklin Roosevelt took office in March of 1933--do not hold me to this number, but something like 5,000 banks declared a holiday, and there was a substantial run. People were frightened they were going to lose the savings they had accumulated, the deposits they had invested or put in these banks. The Federal Deposit Insurance Corporation, providing that insurance to people that their accounts would be protected in an economic difficulty, had as much to do, if anything, in providing the kind of stability we have seen over the years. But that level of $100,000 has been around for a while. I forget how long, but it goes back several decades--well, 1980. My good friend and colleague in the Chamber, Jonathan Miller, tells me it has probably been since the 1980s for the $100,000, maybe even earlier. So there has been a desire to move this level up with good cause, even in the absence of the predicaments we are in. So for those reasons, we raised it. I, for one, would have preferred we almost make it permanent--the $250,000--but others wanted to restrain this by the amount of time, and I respect their judgment. So there was a debate whether it should be 1 year or permanent. We settled on 4 years. My sense is, we are not going to roll this back in 4 years; it is going to be at least $250,000. So for those out there who are concerned about whether there is enough certainty in all of this, while I know they would have preferred a permanent increase, when you are serving with 99 other colleagues here and you are trying to get things done, you have to make some compromises. So the chairman would have liked it permanent, some of my good friends in this Chamber wanted far less than that, and we settled on 4 years. That is the reason that timeframe has come up. This is going to be tremendously important. The significant extension of the increase in deposit insurance will be especially helpful to smaller financial institutions in our respective States that are worried there would be a run from these institutions, including community banks that derive 85 to 90 percent of their funding from deposits. So to the community bankers across the country that rightly have been disappointed that every time we talk about banks, we fail to distinguish between the more conservative, responsible activities of our community bankers across the country and the activities of other financial institutions that have had far less than that level of responsibility--so to our friends in the community banking system across the United States: We heard you on this. Many of you would have preferred a permanent raising. I agree with you about that, but this is the best I could do with this bill. It will not roll back, in my view. Eventually, I think we will make this permanent. For the time being, it is 4 years. By helping community banks protect and grow their deposit bases, this legislation contributes to the effort to improve the availability of capital for lending. That, of course, affects small businesses, microbusinesses, and our constituents across the country. So while this is seen as some security and stability, particularly in the community banking system, this also is very important to small businesses and investors and depositors as well. That is why this legislation needs to be seen in the full context of those who will benefit from it--not only those facing foreclosure but obviously businesses that need borrowing, need that capital to stay alive, let alone try to expand and grow during these difficult times. The eighth provision of this bill increases the permanent borrowing authority for both the Federal Deposit Insurance Corporation and the National Credit Union Administration. The bill increases the permanent borrowing authority for the FDIC from $30 billion to $100 billion. It has been since the 1990s--I think 1991, if I am not mistaken, was the time we settled on the $30 billion. It has been since then that there has been--actually long before this economic crisis--a desire to raise that borrowing authority level. So in this bill, we raise the authority from $30 billion to $100 billion. In the credit unions, we raise it to $6 billion. We establish temporary additional borrowing authority from the $100 billion to $500 billion in the case of the FDIC and from $6 billion to $30 billion in the case of the National Credit Union Administration, to which the regulators may gain access only with--by the way, you only get beyond that $100 billion with the FDIC or beyond the $6 billion if you are part of the National Credit Union Administration if you are able to get the following agreements: The regulators may gain access only with a two-thirds vote by the Federal Deposit Insurance Corporation or the National Credit Union Administration, a two-thirds vote by the Federal Reserve Board, and agreement by the Secretary of the Treasury, in consultation with the President of the United States. Again, you have to have a two-thirds vote by the Federal Reserve Board, a two-thirds vote by the FDIC or National Credit Union Administration, approval by the Secretary of the Treasury, in consultation with the President of the United States. I hope my colleagues would feel those are enough safeguards that you would not find regulators being able to raise those amounts without going through some significant hoops, and the circumstances would have to be such that these various offices would agree. FDIC--Federal Deposit Insurance Corporation--Chairman Sheila Bair has said that the temporary authority would allow the FDIC to reduce the special assessments on banks by as much as 50 percent, increasing lending by as much as $75 billion. Again, going back to our banking community and their concerns about assessments, the fact that we are doing it, reducing those assessments by as much as 50 percent, is no small achievement. Again, it is real relief. By doing so, there is the likelihood these institutions can provide additional lending because those assessments will not be too high, which helps small businesses and borrowers across the country. Again, it is not unlike raising insurance levels. We think these provisions will also make a great contribution to getting lending going again. The one thing we all hear from our constituents over and over again is: We are having a hard time accessing capital. So we hope these provisions will provide some additional relief in that area. The ninth provision of this bill stretches out the payment of assessments to rebuild the bank, thrift, and credit union deposit insurance funds to 8 years. This is a very important provision. Again, it goes and relates to the last two provisions I talked about because, again, while we think we are providing some relief in terms of the amount of assessments, over what period of time you have to pay them is also a critical issue for these smaller lending institutions. By doing what I have just suggested--stretching it out to 8 years--community banks and credit unions will be able to devote more of their resources to making loans in the communities they serve. This provision is especially important for credit unions because of the way their deposit insurance system is structured; otherwise, these institutions would have to rebuild their fund in 1 year, which could lead to a severe reduction in lending. So it is a major provision for both community banks and credit unions but particularly in the case of credit unions. The 10th provision of the bill improves the FDIC's systemic risk special assessment authority. Again, it is related to the last three provisions I have mentioned. The Government's recent use of its systemic risk authority benefited large bank holding companies and their nonbank affiliates, shareholders, and creditors as well. Yet to recover any losses from systemic risk, the FDIC may now only charge banks and thrifts themselves. Obviously, this would unfairly burden community and other traditional banks, particularly those with few or no nonbank activities. What we have done in this bill would allow the FDIC, with the Treasury Secretary's concurrence, to directly assess bank holding companies if they stand to benefit from the Government's actions and correspondingly to reduce the cost to our community banks. Again, this is a major provision. It is a technical one, maybe, to many, but again, since a lot of these institutions do not have any nonbanks--and therefore run the risk in the absence of this provision--they could end up being assessed for those charges. This would allow the Secretary of the Treasury and the regulators to seek those assessments for the institutions that ought to be assessed since they are the ones benefiting from that program. So these provisions, while they are technical in nature, I say to my colleagues--and they are not the kinds of issues you can explain necessarily in a quick sentence before a townhall meeting--let me tell you, they are very important. Are they going to solve the economic crisis? Absolutely not. Are they going to make a difference? Absolutely. Absolutely. So while this bill does not get the same degree of notoriety that others have, it is a critical component to getting our economy moving again. For those of you who have heard--as I have heard over and over--from our community bankers, our community small businesses: Where is the lending, we think this bill, while it is not going to cause a floodgate to open in terms of lending, it lifts a lot of those barriers and restraints that people have otherwise felt when it comes to lending practices. So do some of these community banks and thrifts and credit unions benefit as a result of this? Yes, they do. But let me remind you, when they do, the borrowers, the homeowners, the small businesses who are desperate for that lending, that capital, or to mitigate foreclosure, are a direct beneficiary of this legislation. So this is a bill where literally both the lending institutions and the borrowers are direct beneficiaries, and one of the reasons I think it is so important we try to adopt this as quickly as we can. My hope is that on Monday or Tuesday we will be able to handle a few of these amendments, some of which have nothing to do with this bill. We have to deal with the TARP money and others things, and I appreciate people's concerns about that issue. But let's not miss an opportunity now to get this right. If this bill becomes loaded down with a lot of other amendments--and I am always hesitant to speak for the majority leader, but in my conversations with him, he has indicated he is not going to spend forever on this. We will come back to it--recognizing that at some point, whether it is later this summer or next fall or maybe next winter, we could come back to this, I think that would be a tragedy because I think we can get this done. Senator Shelby and I have worked hard on a bipartisan basis to put this legislation together. We have a very good Banking Committee that has worked on this legislation as well. And I think we would miss an opportunity not to get this done. So to my colleagues who would like to bring up a lot of other issues--and I do not question their motives or sincerity behind those ideas that have little or nothing to do with this--I would urge restraint or we may run the risk of losing an opportunity to get this bill done. There are a lot of other matters before this body that the leader has to get up for consideration. He cares deeply about this issue, as I have evidenced by the fact that he has contributed directly to this bill. But he also has other matters that deserve our attention. He has provided me the opportunity, along with Senator Shelby, to get this bill done. Let's not miss this opportunity. People talk about bipartisanship, working together. That is exactly what Senator Shelby and I have done with our respective staffs to produce this product. It is not exactly everything Senator Shelby would agree on. It is not everything I would agree on. But together we feel this is a product that deserves the support of our colleagues. Let me, lastly, if I can, suggest to you that there are a number of very diverse groups that support our efforts. The Center for Responsible Lending is a strong advocate of this bill. The Credit Union National Association supports this bill. The Independent Community Bankers Association strongly supports this bill. The National Consumer Law Center supports this legislation. The American Bankers Association, the National Association of Consumer Advocates supports this bill, the Financial Services Roundtable, and the Housing Policy Council. To those who think this is just another list of organizations, let my remind those who are not familiar with these organizations, that is a very diverse list. You do not normally find consumer groups and the American Bankers Association, community bankers and the Center for Responsible Lending all agreeing on a bill. Yet that is exactly what has occurred with this legislation. So if you have any doubts about the importance of it, I would invite my colleagues to contact any of these organizations and ask them how significant this bill is. Technical, it may be, in nature, and yet it is these technical corrections and improvements which can make a difference in the lives of our fellow citizens who are anxious--to put it mildly--that we step up and get the job done, get our economy moving again, restore our optimism and confidence as a people, and provide the kinds of steps that will move us in that direction. Mr. President, lastly, I ask unanimous consent that letters of endorsement from various organizations I have just recited be printed in the Record.

Mr. DODD. Mr. President, I thank the Presiding Officer, and I yield the floor. I suggest the absence of a quorum.

Mr. DODD

Mr. DODD. Why not go ahead and do that.

Mr. DODD. Madam President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that the Committee on Finance be authorized to meet during the session of the Senate on Thursday, April 30, 2009, at 10 a.m., in room 215 of the Dirksen Senate Office Building.

Mr. DODD. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Thursday, April 30, 2009, at 2:30 p.m., to hold a hearing entitled ``Confronting Piracy off the Somali Coast.''

Mr. DODD

Mr. DODD. Mr. President, I ask unanimous consent that members of my staff, Deborah Katz, Amy Widestrom, Matthew Green, Ella Humphry, and James Bair be granted the privilege of the floor for the duration of the consideration of this bill.

Mr. DODD

Mr. DODD. Madam President, let me, first of all, thank our colleague from Illinois for his tireless work on behalf of this idea. I joined him, along with Senator Schumer, early on in recommending a proposal like this. History is always a good source to go to. Back in the spring of 1933--which is about as close an example we could probably find over the last 100 years that compares to the days we are in today. Of course, that was the height--or the beginning--of the Great Depression. In 1929, certainly, it all began. After the election of 1932--during that now often repeated ``first 100 days'' of each administration--and that was the first 100 days ever talked about. It was the Roosevelt administration. The inauguration was in March of 1933. Inaugurations occurred in March in those days, not in January. So that 100 days ran from March until June. One of the first things the new administration did in the face of significant foreclosures across the country--and there were significant ones. They were major. Those days were, in many ways, far more difficult than the ones we are in. These are bad days, obviously, with 10,000 homes a day going into foreclosure, with 20,000 people a day on average losing their jobs. Retirement accounts are evaporating. We have all heard about, read about, and know people that has occurred to. But one of the things the new administration did in those days was to go out and actually purchase the home mortgages. The Federal Government actually did that. In order to stem the tide of foreclosures, the U.S. Government decided in those days that it would take over that responsibility. They did other things as well: put capital into banks to stop the runs that were occurring across the country--major steps. But in home foreclosures, they took the unprecedented step of trying to stem that tide, knowing how much damage foreclosures could cause, not only to families and neighborhoods and communities but also to the financial system. Senator Durbin is not advocating anything quite as revolutionary as the Government acquiring the mortgages of every home. While some have made that suggestion, he is not doing so. What he is suggesting is modifying the bankruptcy laws of our country for a limited amount of time, in a very narrow set of circumstances, to say: Where your primary residence is concerned--and for those who have not followed the debate, let me explain. There is no restriction in a bankruptcy court for a bankruptcy judge to modify--or at least to negotiate--the modification of your mortgage if you have a vacation home or if you have a pleasure boat and have a mortgage on that. The bankruptcy judge can modify the mortgage on that beach house, that mountain cabin, that yacht you may have. That is perfectly legitimate under bankruptcy laws. What you are not allowed to do, if you are a bankruptcy judge, is to modify the mortgage on a principal residence. I don't know if statistically what I am about to say is accurate. I suspect that most Americans who have a principal residence don't have vacation homes. I know some do, and that is perfectly legitimate. I am not arguing that you shouldn't have one. But explain to me, if someone will, the distinction on why a vacation home, a yacht, a mountain cabin--as nice as it is to have one--ought to be able to be subjected to a workout with the mortgage involved, and yet, for the person who only owns one home, as most do--you own one house--a bankruptcy judge is prohibited from engaging in a workout between the lender and the borrower on that principal place of residence. For the life of me, over the last number of months we have been involved in this debate and discussion, I have failed to hear an adequate explanation of why there is a distinction on a principal place of residence where a mortgage is involved and there is no hesitation, no restriction whatsoever, on whatever other number of homes you may have. Some have a lot more than two; some have three, four, and five. All of those can be subject to a workout, but not a principal place of residence. That is all we are trying to do here. Not forever, not looking back, not looking forward forever--Senator Durbin's amendment says for a limited amount of time, under limited circumstances--under the total control of the lender, by the way, because if you turn down a workout as a borrower, then basically you lose the option of working it out. It is so narrowly drawn under these circumstances that, for the life of me, I don't understand the objection. It is one of those moments where I try--when preparing for debate, we all ask: What is the other side going to argue? So I thought last night, I have to get ready for the other side. I tried thinking through what is the argument I would make if I believed this would somehow cause great harm to the economy, was going to flood our courts or was going to require hundreds more bankruptcy judges to deal with it. What is the argument I would make to my constituents and to the American people that we ought not allow a bankruptcy judge to sit down between the borrower and the lender and work out a financial arrangement that allows the borrower to stay in their home, the lender to be paid--at least getting something back-- turning that property into a foreclosed, vacant property, contaminating the value of every other home in that neighborhood. What is the logic? For the life of me, I can't come up with that, and I have tried. So I would urge my colleagues, as you are thinking about this and listening to these debates, why can't we do what the Senator from Illinois has suggested: For a limited amount of time, try this. It is not forever. It just might do what the authors have suggested, and I am proud to be one of them. It might just do what we failed to be able to achieve despite the efforts of all of my colleagues here. As chairman of the Banking Committee, we have come up with all sorts of very complicated proposals to try to assist homeowners, and I regret to report that while I think these ideas have great merit and we have all tried hard, they have not been terribly successful, despite the good intentions of everyone to work it out. This is the one idea we have not yet tried to make a difference in the foreclosure crisis. Before the Sun sets tonight, 10,000 families are going to potentially lose their homes, and that will be true tomorrow and the next day and the day after that. Just think about that. As we all go home tonight to our respective dwelling places here, 10,000 of our fellow citizens in this country will end up losing their homes. They have to come back and face their families. Imagine, if you will, if you were in that position, walking into that house tonight and facing your children and facing your family and saying: We can't make this happen financially. We are being pushed out of this house. This body cannot, for a limited amount of time, under limited circumstances, try something that might make a difference in that family's condition? I hope, in these very difficult days--if almost 100 years ago, 90 years ago, another body sitting here in the wake of economic circumstances that were as trying as they were could do something as unprecedented as the Government actually purchasing the mortgages, can we not now ask the Federal bankruptcy courts to sit down and try, for a limited amount of time, to make it possible for that family to stay in their home? It may not work in every case. The Senator from Illinois has pointed out that of the potentially 8 million foreclosures, his bill may only affect 1.7 million of the 8 million, and for a lot of people, this won't even work, regretfully. But for 1.7 million, it might just make a difference to those families. The value of that--how do I put an economic value on that? What does it say to a family who can stay in a home they have bought, they watched the value decline--the mortgage probably exceeds the value of the home in many cases--but that sense of optimism and confidence, that family staying together during very difficult times? If you are the next-door neighbor, you live down the block, what happens to the value of your home? We know what happens. In fact, that very day, the value of that home that is not in foreclosure and there is no threat of it, but your neighbor's home now declines by as much as $5,000, then, of course, that property and those other properties could fall into a similar situation. All of a sudden, what was otherwise a healthy neighborhood--people meeting their obligations, equity in their homes--all of a sudden, you watch a neighborhood begin to decline. Just imagine, if you would, you are in the market to buy a home and you are riding down that street and you see a couple of places you might be interested in buying but you see foreclosure notices up on two or three. How willing are you going to be to buy a home in a neighborhood where there are foreclosures? So there is a contagion effect, a ripple effect, beyond just the plight of that family, which ought to be enough motivation to try to make a difference, but if you are not impressed by that, think about that neighborhood and community. In the city of Bridgeport, CT, in my State, there are over 5,000 homes in that city that are subprime mortgages in danger of going to foreclosure--5,000 homes in 1 city. I don't need to tell anyone in this body what that will mean to that community. The tax base gets lost, but far beyond the financial implications is what it does to the heart of a community, what it does to the heart of a neighborhood, what it does to the heart of a family. So all we are asking for with the Durbin amendment is let's try this for a limited amount of time to see whether it will make a difference. Maybe it won't achieve the results we authors claim it will, but is it not worth a try to see if we can't bring that lender and that borrower together, to work something out so they can stay in that home? The lender gets paid. It seems to me that has to help. I agree completely with my colleague from New York, Senator Schumer, who made the case, and did so simply. There is a direct connection here. If we are unable to get our housing situation stabilized, all of these other efforts we are making to get the financial system working are not going to succeed. At the root cause of this issue is the residential mortgage market. The failure of us to reach that bottom--to begin to see these values improve and people out purchasing homes will also be not only indicative of the direction we are heading in but also essential if we are going to recover. Beyond the issue of housing and what happens to families, the very heart of the economic crisis, its roots, began in the housing market. I believe very strongly, as others do who are far more knowledgeable about macroeconomics than I will ever be, that our inability or unwillingness or failure to address the residential mortgage market will make it almost impossible for us to get the kind of recovery we are all seeking on the larger economic issues. So I wish to commend my colleague from Illinois. He has worked tirelessly. He has brought together the financial institutions. I know many of them mean the very best. There is no ill will involved in this, I presume. I think there is a culture that goes back a long time which says that if a house is in foreclosure or about to go into it, get the family out, put it on the market, sell it to someone else, because the likelihood of that family redefaulting is pretty high. That may be true statistically, but it seems to me that in these circumstances, we are dealing with something very different, far more pernicious, far more widespread, with far greater implications. So even the best argument one might make that historically you do better in getting an economy back on its feet by allowing these properties to go into foreclosure, I think all of us recognize, with the numbers we are talking about here, that accepting that kind of conclusion could be disastrous, as it has proven to be. I recall January and February of 2007. I became chairman of the Banking Committee for the first time in January of 2007. We had a couple of hearings on currency manipulation, I believe it was, in those days in January, but the first hearings I held in February of 2007 were on this issue. In the 110th Congress, I think we had 80, 82 hearings, and a third and a half were on this subject matter as we tried over and over again to get the industry to step up, to come up with various ideas that would mitigate the foreclosure problem. I recall at the very first hearing we had a witness who was very knowledgeable about housing issues, and he testified that he thought there might be somewhere between 1.5 million and 2 million foreclosures. He was sort of ridiculed because these numbers were hyperbolic; this was an exaggeration of what would happen. In fact, the critics were correct. It was. He was wrong. It wasn't 1.5 million or 2 million; it has now become 8 million. So those dire predictions in February 2007 have proven to be painfully off the mark because, in fact, the problem is a lot worse. I believe very strongly that had we in 2007 been able to convince the previous administration to step up and engage this issue in 2007, and even a good part of 2008, we could have avoided what we went through last fall and are going through today as we try to get this economy back on its feet again. But there was tremendous resistance to doing anything despite countless meetings we had, including with the financial institutions, where commitments were made in March and April of 2007 to actually sit down and engage in a workout with borrowers and lenders. None of that ever really happened at all. The numbers are embarrassingly small where workouts occurred, despite the efforts to achieve this without going through a legislative proposal. Of course, the idea of modifying the bankruptcy laws was one that Senator Durbin raised early on. We were unable to get it done. Today, we are trying one more time, in a far more constricted and narrow construct of this proposal, over a limited period of time, to affect as many people as possible. This amendment would also preserve some $800 billion in home equity for neighbors, we are projecting. The list I have of just the properties that could be affected--in my own State, some 15,000 homes could be saved by the Durbin amendment. Looking down the list, the numbers are stunning. In California, I think the numbers I saw are 385,000 homes could be saved by the Durbin amendment. I see my friend from New Mexico is here, and there we are talking about over 6,000 homes would be affected in New Mexico. In the State of Oregon, it is like Connecticut. Over 15,000 homes would be affected, I say to my colleague from Oregon. In North Carolina, I am looking at 38,000 homes, it is projected, could actually be saved from foreclosure, the State of the Presiding Officer. Madam President, I ask unanimous consent that this list be printed in the Record so Members can actually look down and see what a difference this amendment could make in their State.