Washington, DC—Senate Democratic leaders sent the following letter to President Bush today, calling on him to use his influence to persuade Senate Republicans to abandon their strategy of blocking efforts to address the nation’s subprime mortgage crisis:
December 11, 2007
The White House
Washington, DC 20500
Dear Mr. President:
We write to urge you to personally intervene with Senate Republicans and persuade them to end their obstruction of legislation that is needed to address the serious and worsening foreclosure and subprime-mortgage crisis. Over the past year, Congress has made significant efforts to respond, but our progress has been blocked by Republicans in the Senate who are satisfied with the status quo. Given that experts are predicting that your Administration’s subprime-rescue plan will only help about 10 percent of the two million homeowners at risk of losing their homes, it is critical that Senate Republicans allow us to pass other measures that will help more families.
Last Wednesday, during your explanation of the Administration’s plan for responding to this crisis, and again in your December 7th radio address, you accused Congress of failing to take actions responding to the subprime mortgage crisis. You specifically mentioned the need to provide the Federal Housing Administration (FHA) with more flexibility as critical to any comprehensive response.
As you know, the Senate Committee on Banking, Housing, and Urban Affairs earlier this fall passed legislation that would allow the FHA to help more subprime borrowers by a vote of 20-1. This legislation would bring more attractive FHA-backed mortgages into the subprime or lower-income marketplace so borrowers looking to refinance, or first-time homeowners, have a realistic opportunity to choose an FHA loan instead of a risky, exotic mortgage whose terms change after a few years.
On November 15, Senate Democrats sought to pass the FHA Modernization Act but Senate Republicans objected. We tried again on December 6 but Republicans again blocked the legislation.
In your remarks and in your radio address, you also cited the importance of funding for housing counselors. Senate Democrats have included a $200 million increase in funding for foreclosure prevention counseling in the Transportation-HUD conference report. This funding is critical to build capacity in housing counseling organizations, many of which are experiencing record requests for assistance. Additionally, this funding would allow counselors to expand their outreach to distressed borrowers so they can help them remain in their homes when appropriate.
Given the massive scope of this problem, the $50 million you suggested within HUD was clearly inadequate. We were pleased to learn in recent days that Secretaries Paulson and Jackson support this funding, but equally disappointed that you again threatened to veto this level of needed funding.
Senate Democrats attempted to pass the Transportation HUD conference report on November 15 and again on December 5. In both instances, Senate Republicans blocked the legislation, despite the fact that every Republican conferee from the House and Senate signed and supported the final agreement.
Finally, in recent days you also reiterated the need to protect borrowers from the tax burden that often follows a foreclosure or mortgage debt forgiveness. Senate Democrats tried to enact just such a provision last week, a provision that was included in the House-passed AMT-extension legislation. Unfortunately, Senate Republicans once again chose to block this legislation.
Senate Democrats have done our job on FHA reform, on funding for housing counseling and on cancelling the taxes on forgiven mortgage debt. These efforts have had nearly unanimous support in committee but Senate Republicans unfortunately have chosen repeatedly to block our efforts on the Senate floor.
Mr. President, you have spoken often on the need for a meaningful response to the subprime mortgage crisis. Unfortunately for the two million Americans that are at risk of losing their homes, Senate Republicans are not receiving the message.
We hope you still agree about the urgency of enacting these reforms and that you will prevail upon your Republican colleagues in the Senate to end their obstruction and work with us to respond to this crisis. FHA reform, increasing funding for housing counseling and cancelling the tax on mortgage debt forgiveness can have a significant impact on keeping American families in homes and preventing further deterioration in our economy, but only if these ideas become a reality. We urge you to intervene personally and persuade Senate Republicans to end their obstructionism and support these bills.
Harry Reid Richard Durbin
Charles Schumer Patty Murray