Gary Miller

Mr. GARY G. MILLER of California

Mr. GARY G. MILLER of California. Madam Speaker, on September 23, 2008, Saddleback College in Mission Viejo, CA will be celebrating 40 years of providing the communities across southern California with access to quality higher education. Since 1968, Saddleback College has provided access to learning opportunities that promote student success, intellectual growth, individual expression, and a dynamic and diverse environment of innovation and collegiality. I congratulate them on 40 years of success in giving students the skills they need to succeed in a dynamic economy. The Saddleback College faculty and staff, renowned for its experience and expertise, work every day to help students succeed in beginning their bachelor's degrees and training for careers. They have given more than half million students an opportunity to explore the more than 300 academic programs and opportunities for lifelong learning through community education and emeritus classes for senior citizens. In 1968, Governor Ronald Reagan, who spoke at the dedication of the new campus, stated, ``We are here today to dedicate something more than just another college: We are here to dedicate an institution of opportunity and fulfillment. It is the function of education to help each individual grow to the maximum extent of his capabilities, to help him fulfill his great potential--and it is our job as responsible citizens to provide that opportunity. That this community has decided to move ahead in providing this opportunity is an action which I commend--and an action which will provide great rewards for the community.'' I commend Saddleback's commitment to high educational standards, accountability, and results. I look forward to celebrating many more anniversaries with them in the years to come.

Mr. GARY G. MILLER of California

Mr. GARY G. MILLER of California. Mr. Speaker, I rise today in support of H. Res. 1199, a resolution congratulating the Orange County Water District on its 75th anniversary. The Orange County Water District and its employees have effectively delivered innovative groundwater management, water quality, water efficiency, and environmental programs which will reduce our region's dependence on imported water. We all know that with increased demand, decreased availability of imported water, and higher water quality requirements, future water supplies will become even more limited and expensive. If we want to sustain southern California's economic growth and provide for a rapidly increasing population, we must ensure efficient and reliable access to water resources and pursue a modernized sanitation infrastructure. The Orange County Water District recognized that we needed a reliable source of quality water and has pursued multi-pronged strategies for capturing and recycling water that would otherwise flow downstream to the ocean. The first initiative involves a series of agreements between the Orange County Water District, the U.S. Army Corps of Engineers, and the U.S. Fish and Wildlife Service to allow the District to conserve water behind Prado Dam. This water, which would otherwise flow downstream to the ocean, is captured to recharge the local aquifer. In addition, the Orange County Water District has partnered with the Orange County Sanitation District in the development of the groundwater replenishment system. This system will take highly treated sewer water and treat it above and beyond existing drinking water standards by undergoing an advanced purification process that includes two membrane filtration and treatment by ultraviolet light and hydrogen peroxide. Once purified, the water will be sent to groundwater recharge facilities or injection wells. This project is a model of self-reliance and should be replicated throughout water districts around southern California. The Orange County Water District is working to ensure water reliability for generations to come. This is a comforting thought to businesses as well as residents interested in moving to Orange County. Their efforts will allow our economy to grow without being restrained by potential water shortages. I congratulate the Orange County Water District for their 75 years of service to the region and I am proud of the Federal, State, and local agencies that have worked together to serve the community and address the region's growing water needs.

Mr. GARY G. MILLER of California

Mr. GARY G. MILLER of California. Mr. Speaker, I rise in support of this bill. A lot of people are losing their home in this country. In fact, in California, 500 families or more lose their home every day. And that not only hurts them, but the neighbors around them. Because of foreclosure, their home value drops weekly. I don't support government bailouts. I consider this bill we're dealing with here far from a government bailout. If you look at the situation people are in today, people are suffering from shrinking paychecks, other things go wrong in their life. But this loan is the most expensive FHA loan you will get. Normally, a person can go to get an FHA loan, put 3 percent down, and the government will basically be guaranteeing 97 percent financing. Under this loan, the lender has to be willing to take 85 percent of current market value. Let me explain that so it makes it understandable to most people. Let's say you bought a house for $580,000. The first trustee gets $5,000, but current market value is $400,000 for that house. The people are upside down, they can't make the payment, it is going into foreclosure. The lender has an opportunity to allow another lender to buy them out with an FHA loan guarantee, and they're willing to take $340,000 for a loan they have that the market today is $400,000, and the new loan against that house will be $360,000. Now, that sounds really good. And we say the person is going to make a lot of money, it's a bailout. But this is really more like a joint venture. And I don't think CBO even scores this portion. If you sell the home the first year, we either get 3 percent of the loan amount or 100 percent of the profit on the home, whichever is greater. If they sell the second year, we either get 3 percent, or 80 percent of the profit, whichever is greater. The third year, 60 percent. And if you hold it for 30 years and you sell that home, FHA gets 50 percent of the profit on that home. Now, I don't know how most people look at it, but that's the worst FHA loan you can get. It's not a bailout, but it's enabling a person who's losing their home and a lender who says, well, if I foreclose it on $400,000, I might get $380,000, $390,000. And what does that do to a neighborhood? That home that originally sold for $580,000, now the market value for that home in that neighborhood is now $380,000, $390,000 or $400,000. This is more like a refi. It doesn't impact the value of the homes in the community. It basically helps a person get in position where they can retain ownership of their hone. And they're not going to make a windfall profit for it. I would like to thank the chairman for introducing language in this bill that I worked on for 5 years, and that's raising conforming home limits in high-cost areas. Basically, Freddie and Fannie and FHA, in high-cost areas, you can borrow a maximum of a $730,000 loan from them today. The biggest problem we've had in the marketplace in recent years is people have been forced into jumbo loans. If you look at a GSE loan, that's Freddie and Fannie, compared to a jumbo loan today, you can generally save about 100 basis points in interest rates. That's a huge amount of payment a person can save each year, enable a person to be able to put away money in the future for house payments if times get tough and basically own their own home. Some people have said they don't trust the Refinance Program Oversight Board because they don't have any idea what the Board is going to implement as far as criteria to qualify for this loan. I have a problem believing that we can't trust the Secretary of Treasury, the Secretary of HUD and the Chairman of the Federal Reserve Board to come up with criteria based on income, assets, liability, payment history, other criteria, debt-to-income ratio. If we can't trust those three individuals to come up with a reasonable criteria under which this loan is made, I think we're in trouble in this country. The problem some people have is FHA exists. FHA loans are made today, and FHA is guaranteeing, through insurance premiums, these loans. Now, a normal FHA insured premium costs a borrower .55 percent per year, about half a percent. Under this new program, they have to pay 1.5 percent per year to FHA to underwrite this guarantee. That's far from a giveaway. I can't see anything in this FHA loan that's a giveaway. I rise in strong support of this bill.

Mr. GARY G. MILLER of California

Mr. GARY G. MILLER of California. Madam Speaker, I rise to recognize 127 Royal Australian Air Force veterans who on April 4 will be awarded the United States Air Force's Air Medal by the U.S. Embassy in Australia for their service during the Vietnam war. These men bravely contributed to the tactical air mission of the United States Air Force in Southeast Asia between 1964 and 1972. Under dangerous conditions they displayed courage, dedication and resolve as they completed their missions. I also wish to thank current and retired members of our military, including many who served alongside these Royal Australian Air Force veterans, for volunteering many hours to insure that they were properly recognized.

Mr. GARY G. MILLER of California

Mr. GARY G. MILLER of California. Mr. Speaker, I rise in reluctant opposition to H.R. 1424, the Paul Wellstone Mental Health and Addiction Equity Act. To be clear, I support mental health parity and I commend my colleagues for coming together to ensure Americans can receive the care that is necessary; however, I have serious concerns about extraneous provisions that were added to the bill at the last minute. This legislation, while seeking to increase access to mental health treatment, simultaneously raises the cost of doing business for companies who choose to provide low cost medication to the Medicaid program. In addition, the bill stifles the growth of certain specialty hospitals in an effort to bring more business to public hospitals. In a time when we should be encouraging the expansion of all types of medical care, we should not be punishing one part of the industry in order to pay for the expansion of another. Providing access to quality mental health care is an important goal. Yet, I believe this goal can be achieved without harming unrelated aspects of the medical field, which is why I oppose H.R. 1424 and I support S. 558. If the House had brought up S. 558, which does include any of these problematic provisions, we could well be on our way to expanding mental health parity. I encourage the House to move forward with the Senate version so we can send this bill to the President as soon as possible.

Mr. GARY G. MILLER of California

Mr. GARY G. MILLER of California. Madam Speaker, on rollcall No. 25, had I been present I would have voted ``yea.''

Mr. GARY G. MILLER of California. Madam Speaker, I strongly support H.R. 5140, the much needed Economic Growth Package to address troubles in the mortgage marketplace. In the past year, we have witnessed significant upheaval in the U.S. housing markets. Increased delinquencies and defaults among borrowers have contributed to turmoil in the mortgage finance sector, which has affected our entire economy. Many areas of the country have been heavily impacted by the mortgage crisis, with many families facing increased payments and foreclosures. Over the years, many hard-working families have been faced with a situation where they are either unable to own homes, or they are forced to resort to risky loans that might impair their ability to keep their home. This is especially true in high cost areas of the country, like California, New York, Massachusetts, and Connecticut, where statutory loan limits have eliminated federal housing programs as an option to purchase entry-level homes. Under the current loan limits, FHA products have become unavailable for homebuyers in high cost areas of the country because the maximum mortgage limit is lower than housing prices. Families who need and qualify for FHA have been unable to participate in the program due to these geographic barriers. The median home prices in high cost areas, like my district in southern California, is well above the GSE conforming loan limit of $417,000. A starter home for a family in Los Angeles, for example, usually puts a buyer into the so-called ``jumbo'' loan market. Jumbo loan premiums add hundreds of dollars onto a monthly payment for a fixed rate loan. Thus, many moderate income families have been priced out of a home loan by virtue of where they live and work. Housing experts predict that the number of foreclosures that have occurred over the last year may double in the next 2 years as more adjustable rate mortgages with low introductory rates reset at significantly higher levels. By increasing the conforming loan limits, Fannie Mae, Freddie Mac, and the FHA program will have the ability to put affordable home purchases and refinancing options within reach of more moderate-income families. Chairman Frank and I have been working for many years to create affordable housing opportunities for families across the country by increasing the conforming loan limits. Many communities in America are being underserved by the GSEs and FHA, because home prices in these areas surpass the national loan limit. I am pleased we are addressing this disparity in the legislation before us today and hope that the Senate also supports this critical change. In addition to providing much needed liquidity to the struggling mortgage market, increasing the conforming loan limit will make safe, conforming mortgage loans available for homebuyers across the country and reduce aggressive lending practices that have contributed to the current credit and housing crisis. Foreclosure rates are rising with harmful effects for borrowers, lenders, the neighborhood, and our overall economy. As we continue to experience instability in the housing market, this important change will be essential for successful homeownership. There is no more important priority for Congress than helping to keep families in their homes.

Mr. GARY G. MILLER of California

Mr. GARY G. MILLER of California. Mr. Chairman, I rise in support, but I want to express some concerns I have with the bill. I have been a long-time advocate of antipredatory legislation that will eliminate abusive lending practices while preserving and promoting access to affordable mortgage credit. I want to thank Chairman Frank for holding true to his commitment to work with me on ensuring that section 123 of the bill will continue to give consumers viable financing options that would not prevent mortgage originators from being compensated. Under the new language, consumers will continue to be able to obtain and enjoy the benefits derived from having the option to choose zero points or no-cost loans by financing the fees and their costs into the rate of the loan amount. I am also pleased that the mechanism by which the mortgage originators are compensated in such cases has been unaffected. According to the Mortgage Bankers Association, currently there are slightly more than 6 million nonprime loans. Of these loans, a little over 5 million, or 85 percent of these loans, are basically being paid on time. Yet, according to the MBA, under the legislation, perhaps 50 percent of the nonprime loans would not be made. This means that a significant number of consumers would not be receiving mortgage financing and millions of legitimate loans would not be obtained. While there is certainly no question that nonprime borrowers have been subjected to abusive lending practices over the years, there is also no question that the vast number of borrowers who were not victims of such practices can become victimized by poorly crafted protective legislation that restricts nonprime credit availability. Under this bill, it significantly expands the scope of loans that qualify as ``high-cost loans,'' or HOEPA loans. This section of the bill dramatically lowers the point fee calculations, thereby capturing a much larger number of loans than under the previous definition in current law. The expansion of HOEPA to cover the additional loans would provide access to credit to more nonprime borrowers. During the markup, I attempted to amend this section to ensure that lenders would still provide and borrowers could still obtain HOEPA loans under this bill. My amendment would not have revised the substantive protection provided by HOEPA as amended. Rather, it would have limited the increase in the number of types of loans that are subject to HOEPA. In addition, the provisions of title III were drafted at least a year before the drafting of titles I and II of this bill, and title III was written without the benefit of enhanced consumer protection provided to nonprime borrowers under the other sections of the bill. I am concerned that the three titles have been joined into a single bill without the respective provisions being synchronized. By expanding the scope of loans covered by HOEPA, we will further limit liquidity and drastically shrink the availability of mortgage credit. In fact, under current law, the liability and penalties extended to HOEPA loans have made creditors reluctant to make these loans.

Mr. GARY G. MILLER of California. I yield to the gentleman from Massachusetts.

Mr. GARY G. MILLER of California. That is correct.

Mr. GARY G. MILLER of California. I thank the chairman. Mr. Miller and I have discussed this in the last several days, and I know there was not time to deal with this issue effectively prior to it reaching the floor. I have had extended conversations with many Members on your side of the aisle who support the concept I am trying to move forward. I look forward to working with you before this bill comes back through conference.

Mr. GARY G. MILLER of California

Mr. GARY G. MILLER of California. Mr. Speaker, I rise today in support of H.R. 813, the Santa Ana River Water Supply Enhancement Act of 2007, which will significantly increase Southern California's water supply. The Santa Ana River Water Supply Enhancement Act of 2007 authorizes federal funding for a number of important local water projects. When complete, these projects will increase Southern California's water supply by over 37 billion gallons per year. Because of dwindling supplies, increasing demands, and looming drought, Southern California communities continue to seek non- traditional methods to produce dependable water sources. I am pleased that the House has recognized the importance of addressing the chronic water shortages in Southern California by providing the funding resources necessary to help local water agencies improve water reliability and diversity. H.R. 813, the Santa Ana River Water Supply Enhancement Act of 2007, will improve Southern California's water supply by developing wetlands in the Prado Basin, and expanding groundwater desalination in the Chino Basin, and constructing regional brine lines. Specifically, H.R. 813 authorizes the federal government to spend $20 million to develop large-scale wetlands along the Santa Ana River in the Prado Basin, to purify the River before it replenishes Orange County's groundwater supplies. This expanded natural treatment system will provide an additional 24.5 billion gallons of water per year. In addition, H.R. 813 authorizes $50 million in federal funding to expand groundwater desalination in the Chino Basin from the current 2.9 billion gallons per year to 13 billion gallons per year. This will provide a new fresh drinking water supply for Jurupa Community Services District, Santa Ana Mutual Water Company in Riverside County, and the cities of Norco, Chino, Chino Hills, and Ontario in San Bernardino County. Also, the bill authorizes $40 million in federal funding to provide methods to safely and efficiently discard excess brine from nearby desalination plants by constructing a line that transports residual brine to the Pacific Ocean. This will ensure salt water does not contaminate fresh groundwater supplies. If we want to sustain America's economic growth and provide for a rapidly increasing population, we must ensure our communities have efficient and reliable access to water resources. By encouraging the use of innovative technologies through water recycling and desalination, this bill ensures that more drinking water will be available across Southern California. Mr. Speaker, I urge my colleagues to support this important bill. As it moves forward through the legislative process, I will continue to urge for its expeditious enactment.

Mr. GARY G. MILLER of California

Mr. GARY G. MILLER of California. Madam Chairman, I rise in strong support of this bill. I'd like to commend Chairman Barney Frank and Ranking Member Bachus and Subcommittee Chairman Maxine Waters and Ranking Member Judy Biggert for their hard work. This has been a long time coming. If you watch what the Federal Reserve is doing today, they're injecting short-term dollars into the marketplace trying to stabilize the marketplace. But what the marketplace and housing needs today is long-term dollars and revenues to ensure that people can own a home and get a long-term loan and pay that back. When I talk to brokers and lenders in my district, it is clear that the FHA program as currently structured has not kept pace. In the past, moderate-income home buyers who could not qualify for conventional loans because of high loan to value ratios or high payment to income ratios could still achieve the dream of homeownership through the FHA program. Today, the FHA program is no longer a useful product to home buyers. Instead, working families are faced with a situation where they are either unable to own a home, or they're forced to resort to a risky loan product that might make their ability to keep the home difficult. With all this occurring in the subprime market, FHA reform is more critical today than ever. The need for this legislation is immediate. Many times exotic products such as interest-only loans, negative amortizations are the only options available to working families to achieve homeownership. This is because the FHA program became virtually irrelevant for many home buyers. Not only can the bill before us today provide a viable alternative for families seeking to purchase a home, but it can also help families facing uncertainty about being able to keep their current home. The bottom line is to make the FHA program a viable mortgage option, we must ensure that the program's products are available across the country and they meet the needs of borrowers. This includes not only eliminating the geographic barriers to utilization of the program in high-cost areas, but also facilitating the purchase of entry-level homes, including condos and manufactured housing. These forms of housing are an affordable option for entry-level home buyers, and they should be included under this program if we truly want to help families climb the first rung on the ladder of homeownership. In addition to reforming what can be purchased under the program, we must also improve the competitiveness of the FHA product among the mortgage options available. In other words, we must address the problems in FHA programs that cause it not to be utilized when it is an available mortgage product for the potential home buyer. The answer is that the program in flexibility and burdensome processes have left many in the industry hesitant or, in the case of mortgage brokers, unable to offer FHA products. The legislation before us today includes a number of reforms to make the FHA program relevant in today's marketplace. For example, today's mortgage brokers originate the majority of mortgage loans and, therefore, provide HUD with the most available and efficient distribution channel to bring the FHA loan products to the marketplace. While mortgage brokers originate the majority of loans, many are not able to offer FHA products because of the cost-prohibitive and time- consuming financial audit and net worth requirements. This effectively leaves subprime loan products as the only option for many borrowers who would otherwise qualify for an FHA. Now, let me say the subprime market is extremely beneficial and it needs to be relevant. But today you have many predators in that marketplace that are making loans to people that they know they cannot repay. The bill before us today includes language to replace FHA's net worth and audit requirement with a surety bond to allow more mortgage brokers to offer FHA products. This will ensure that the home buyers are given the option of a FHA product when they seek the services of a mortgage broker. I would like to say a word about the affordable housing fund included in this bill. While I opposed a similar fund when it was attached to the GSE reform bill, I want my colleagues to know that I support this fund because an amendment I offered at the markup was accepted by Chairman Frank to essentially say, and these are arguments that have been made against this, that the HUD must ensure that FHA insurance premiums are, one, as low as possible; two, that the insurance fund is solvent; and, three, that any FHA needs are met before excess dollars are sent to the housing fund. Virtually it says that FHA has the dollars, they will use the dollars, and when it's not needed, then those dollars will be forwarded to the fund. After that I firmly believe that the FHA funds should be dedicated to housing. We do this for the highway fund when we charge a gas tax. Those taxes are dedicated to repairing our roads and highways in this country. We should do this with the FHA too. The FHA money we are talking about is money that currently is going to the treasury. Now more than ever Congress must pass FHA legislation so that we can remove the impediments to the utilization of the FHA and ensure that it once again helps working families across the country so that they have an opportunity to achieve and maintain homeownership. This is an important reform that will help many families avoid foreclosures. Most of the people, and I would say, all the organizations in the industry who are looking to help people who are in trouble today support this bill. They also support the GSE reform bill that we put forward because it does one thing: It provides long-term stability and liquidity to the marketplace. The goal of this bill is to ease the burdensome problems people are facing today. They are looking at losing their homes. We are saying let's provide long-term liquidity and help them maintain their homes.

Mr. GARY G. MILLER of California. Madam Chairman, I'm rising asking for strong support of this amendment, so it's not really in opposition to the amendment. This bill, and this amendment, particularly, is to encourage the FHA program and products and make sure they're available across this country to help working families to achieve and maintain homeownership through the FHA program. The bill we are considering here today reforms the FHA single-family mortgage insurance program so that we can reach working families it was created to serve. I don't think there is any question that the FHA program, as currently structured, has not kept pace. Today, FHA is no longer a useful product to prospective home buyers. The problem is that statutory limitations preclude the FHA from adopting a rapidly changing marketplace that we experience today. As the private sector mortgage markets become more efficient, the FHA program's inflexible rules and requirements left it virtually irrelevant as a financing option. Under the current limitations, FHA products are not available for home buyers in high-cost areas of the country because the maximum loan limits are so much lower than the median home prices in that area. We did something very similar to this when we did the GSE in the high-cost areas. And the only people arguing against raising this conforming loan limit to high-cost areas were those whose home median prices fell far lower than the median amount they were able to loan on. If your median home area is 200,000 and it isn't 435, you don't care. But in California and other areas, it is quite the opposite. Now California's drop in FHA volumes have been nothing short of stunning. In 2000, FHA insured 109,074 mortgages in California, but last year it only insured 5,137. In my district, FHA insured 7,000 mortgages in 2000 and only 80 mortgages in 2005. These figures represent a 99 percent drop in what FHA is able to loan in these high- cost areas. That in and of itself states that there is a huge problem that this amendment is trying to cover and create the shortfall that currently exists in the program. Arguably, working families in high- cost areas of the country are just the kind of underserved populations the FHA program was originally intended to serve. If we want to ensure that FHA is relevant for all those who need it, we must reform the program so it is available to low- and moderate- income families across the country, even those in high-cost areas. On August 31, the President announced his goal to help an estimated 240,000 families avoid foreclosures by enhancing the FHA program. Under the President's plan, FHA will allow families with strong credit histories who have been making timely mortgage payments before their loan reset, but are now in default, to qualify for refinancing. Unfortunately, without an increase in the loan limits, this program will not help families in high-cost areas. This amendment, supported by Mr. Frank, Mr. Cardoza and myself, would make sure that families can refinance in the FHA products by raising the FHA single-family loan limits in each local area to the lower of 125 percent of the area median home price, or 175 percent of the national GSE conforming loan amendments. The amendment also gives HUD authority to raise these loan limit amounts by up to $100,000 ``if market conditions warrant.'' The NAHB, National Association of Home Builders, has written a very strong letter in support of what we are trying to do. Many builders are selling homes today, and the problem they have is the person buying their home cannot find financing to sell their home. And this will help those people who are looking for financing and dealing with liquidity shortages in the marketplace. The National Association of Realtors has also written a very strong letter supporting what we're trying to do today. The problem they're facing today with people in the mortgage bracket that we're trying to deal with in this amendment, this will go a long way to providing liquidity and competition in the marketplace to ensure that American home buyers and families have the best and most opportunities that can be achieved through the marketplace through this amendment. So this is a very good amendment, and I would ask for an ``aye'' vote.

Mr. GARY G. MILLER of California. Madam Chairman, I offer an amendment.

Mr. GARY G. MILLER of California. I rise to offer an amendment to H.R. 1852, the Expanding American Homeownership Act of 2007. My amendment would allow qualified down payment assistance providers to participate in the FHA program if certain conditions are satisfied to ensure that the down payment assistance program is legitimate and that the gift that is provided to the homeowner and the home buyer is truly a gift. One of the primary barriers for many Americans to achieving the dream of homeownership is the lack of accumulated wealth and disposable income required to come up with the down payment and closing costs needed to purchase a home. While they can afford monthly payments, some families have not been able to accumulate enough to cover down payment and closing costs. Fortunately, some charitable organizations have developed programs to help provide down payments to families that would qualify for the mortgage for the FHA program but for the lack of cash for a down payment. These down payment assistance programs have been successful in expanding homeownership opportunity for millions of families. The private sector has been working without government intervention to assist individuals and families who lack the necessary funds for down payments and other related costs become home buyers. In fact, Congress looked at the success of these programs when it created the American Dream Downpayment Act, a government program passed in 2003 to provide up to $10,000 in down payment and closing cost assistance to first-time home buyers. Similarly, H.R. 1852, the bill you are reviewing today, authorizes HUD to allow zero down payment FHA loans for home buyers who could not otherwise make the down payment required under the FHA rule. In the past, HUD has permitted the use of charitable down payment assistance programs in conjunction with FHA insured loans. Recently, however, HUD issued a proposed rule that would effectively eliminate many legitimate down payment assistance providers from assisting in FHA programs. We are hearing that just last week HUD sent a rule over to OMB for final approval. I am very concerned about the impact of this proposed rule on homeownership in our country. Rather than going too far by eliminating all down payment assistance providers, all that is really needed is a reasonable and fair criteria by which these programs can continue to operate while also protecting the FHA insurance fund. If there are legitimate problems that have been identified by HUD, then we should absolutely fix these problems. In fact, the full House has agreed that we should strengthen the rules for down payment assistance providers rather than eliminate them completely from the FHA program. In July, the House unanimously passed an amendment I offered with Housing and Community Opportunity Subcommittee Chairman Waters and Representative Al Green to the Transportation-HUD appropriations bill, which prohibited HUD from taking any action to issue its final rule or otherwise implement all or any part of the proposed rule. The amendment prevented HUD from finalizing or implementing the rule to end participation of down payment assistance providers in the FHA program. Our argument, then, was that HUD's proposal was too harsh a step and we would work to include language in the FHA bill to fix the problems that HUD has identified with some down payment assistance providers. This is what my amendment before you today seeks to do. The amendment I offer today is a followup on our work during the THUD bill to put the brakes on the HUD rule and instead address the problem HUD has identified with certain down payment assistance providers. This amendment would put the controls in place to weed out the bad actors while allowing those who help millions become homeowners continue to do the good work they are doing. Unlike the HUD rule, my amendment would preserve the down payment assistance programs' participation in FHA while ensuring they are legitimate and helpful to the home buyers. As you know, H.R. 1582 already includes language to end the practice of inflated appraisals, which was a key argument HUD used against the down payment assistance programs. My amendment builds on this provision and says that down payment assistance providers may participate in FHA so long as the down payment they are offering is truly a gift; in other words, that it reduces the amount owed on the home. My amendment also imposes a net worth requirement on such providers to alleviate the quality and quantity involved within the activity. This provision specifically responds to HUD's complaints regarding the plethora of small, fly-by-night operators that open up and that close down on a regular basis to avoid regulatory scrutiny. Many of these groups are starting business one day, getting involved in things they should not, and closing down immediately. These three improvements to the current situation, number one, prohibiting inflated appraisals; two, ensuring DPA providers offer an actual gift; and three, imposing a net worth requirement, will weed out the bad actors while not prohibiting all down payment assistance providers from participating in FHA, as the HUD proposal would have done. With limited resources at the Federal level, Congress viewed the American Dream Downpayment Act as a complement, rather than a replacement, to the tremendous work down payment assistance providers were already doing to help build communities. There are simply not enough resources at the Federal level to do this alone. To address HUD's concerns, we should implement the same underwriting criteria that would be used on the new zero down payment program within FHA and what HUD already uses on the American Dream Downpayment Act. If we have come up with a reasonable system of underwriting to give Federal dollars to assist a family in buying a home, then we can certainly use the same criteria to allow the private sector to put forth people and moneys in these programs to allow people to own their homes. If FHA can offer a zero down payment loan under a given underwriting criteria, as proposed by this bill, then the private sector down payment assistance programs should also certainly be subject to this same criteria. To eliminate the possibility for a million families to own a home through down payment assistance providers but allow them to use the Federal Government for a down payment grant seems contradictory. If it works for the Federal program, then it should work for the private sector alternative, as well. My amendment addresses the problems with certain down payment assistance providers that HUD has identified. Rather than eliminating all providers, as the HUD rule attempts to do, it puts the protections in place to ensure the home buyers are getting a legitimate helping hand from these charitable entities. Madam Chairman, I ask for an ``aye'' vote on the amendment. I reserve the balance of my time.

Mr. GARY G. MILLER of California. Madam Chairman, I want to thank Maxine Waters for her kind comments. I remember when we were debating the American Dream Down Payment Assistance Act, and we used the private sector down payment assistance program as the tool and the argument to expand upon and have government also get involved. These private sector groups have put over 1 million people in homes that could not otherwise be in homes. This continues a program that has worked very well and eliminates the bad actors that HUD is talking about. I think if this is implemented, this bill will be a very strong bill, and I ask for an ``aye'' vote. Madam Chairman, I yield back the balance of my time.

Mr. GARY G. MILLER of California

Mr. GARY G. MILLER of California. Mr. Chairman, I offer an amendment.

Mr. GARY G. MILLER of California. I thank the gentleman. If PHAs move off the Moving to Work program, HUD must immediately solicit new applicants to keep the program at full force, and I hope this colloquy will eliminate confusion at HUD about the number of PHAs authorized to be designated as Moving to Work. Mr. Chairman, I withdraw the amendment.

Mr. GARY G. MILLER of California. Mr. Chairman, I offer an amendment.

Mr. GARY G. MILLER of California. Mr. Chairman, the Moving to Work program has enabled Public Housing Authorities, PHAs, to create jobs for residents, add affordable housing stock, and help families build savings. Such efforts have gained recognition as being very successful in serving more families and helping recipients to self-sufficiency. The innovation and flexibility of the Moving to Work program helps more families realize self-sufficiency through locally oriented programs instead of HUD's one-size-fits-all approach. Despite these benefits, only 24 of the more than 3,000 PHAs in the Nation are participating in the Moving to Work program. This amendment merely clarifies existing law in order to eliminate confusion at HUD about the number of PHAs authorized to be designated as Moving to Work. Congress has authorized 32 PHAs to participate in the Moving to Work program. Despite this clear intent to have 32 PHAs be designated as Moving to Work, due to what I view as a misinterpretation at HUD, there are only 24 agencies that are currently allowed to participate in the Moving to Work program. Once PHAs leave the Moving to Work program, HUD has said that no new agencies can be selected to fill their vacancies. This simple and straightforward amendment would clarify Congress's intent to require HUD to implement Moving to Work at its fully authorized level. The amendment directs the Secretary of HUD to promptly approve new PHAs to participate in the Moving to Work program whenever the number of agencies is less than the total number and level we have authorized at 32. I urge my colleagues to support this amendment. Does the chairman plan on opposing this amendment?

Mr. GARY G. MILLER of California. Then if the gentleman is going to raise a point of order, I will withdraw the amendment. May I have a colloquy with the chairman?

Mr. GARY G. MILLER of California. Chairman Olver, the Moving to Work program has enabled Public Housing Authorities to create jobs for residents, add affordable housing stock, and help families build savings. Such efforts have gained recognition as being very successful and serving more families and helping recipients to self-sufficiency. Congress has authorized 32 PHAs to participate in the Moving to Work program. Unfortunately, due to the misinterpretation at HUD, there are only 24 PHAs that are allowed to participate in the Moving to Work program. Mr. Chairman, would you agree that it is the intent of Congress that HUD must implement the Moving to Work program at its fully authorized level?

Mr. GARY G. MILLER of California. Mr. Chairman, I ask to engage the chairman of Transportation and HUD in another colloquy. Mr. Chairman, I have serious concerns about the administration's proposal to increase the Federal Housing Administration's multifamily mortgage insurance premium by 35 percent for fiscal year 2008. The administration proposed a similar increase last year, and rescinded it after hearing from Members of Congress and those in the industry most affected. I believe we again do not have sufficient information about the impact of this proposal on affordable rental housing for American workforces. The chairman of the Financial Services Committee Mr. Frank and I are currently circulating a letter to HUD among our colleagues opposing the increase in the premium. As of Monday, we have 106 Members of Congress on record opposing the increase. A similar letter sent to HUD was recently signed by 38 Senators. We believe an increase in the premium will impact the communities where housing would be built as well as tenants in those projects. HUD needs to perform a full assessment of the likely impact of such a premium increase on the volume of multifamily rental housing development, and the consequential effects of higher financing costs on rents to be borne by moderate-income residents. This thorough assessment of the potential adverse effects of the proposed premium increase needs to be submitted to the appropriate congressional committees, giving Congress the opportunity to evaluate the proposal. This would need to happen before allowing the increase to go into effect by simple notice.

Mr. GARY G. MILLER of California. I thank the gentleman.