10:36 AM EDT
Richard C. Shelby, R-AL

Mr. SHELBY. Mr. President, we are nearing the end of a long debate in the Senate dealing with what some people call the housing bill, but as we know, it is more than housing. One of the big titles in it deals with the reform of the government-sponsored enterprises--GSEs commonly known as Fannie Mae and Freddie Mac, as well as the Federal Home Loan Bank Board.

We know that we are in a housing crisis in this country. We have a lot more houses than we probably need right now, and we have a lot of people who are going to be facing foreclosure. So, working together with Senator Dodd and our staffs, we have tried to come up with a plan to give thousands of people an opportunity for some relief. It is not a Government bailout. It is not taxpayers' money. It gives them an opportunity--assuming a lender is about to foreclose on someone--to get together

with someone else who has borrowed money and say: Look, if you can get this refinanced through the FHA modernization plan, if we can do that and we can cut down on the value of the mortgage--take a haircut, so to speak--this is better than a foreclosure.

Lenders know the worst thing in the world for them is foreclosure. Borrowers know that too, because it is a dangerous game people play. Going back to the Fannie Mae and Freddie Mac situation, we know they play a huge role--a central role--in our housing, but we also know that together they owe a little over $5 trillion; $5 trillion in debt, and they are thinly capitalized because they are government-sponsored enterprises. They have the implicit guarantee of the taxpayer--the U.S. Government,

basically. I have no reason to believe we would let them go under because there is a lot at stake. The way to keep them from getting in worse financial shape is to create a strong regulator that will monitor them closer than they have been in the past to make sure they have adequate capital.

With Senator Dodd's 28 years and my 22 years on the Banking Committee, we have 50 years. In our combined 50 years on the Banking Committee, we have seen financial debacles. We have seen good times and bad times. What we are trying to do is prevent as many headaches and hardships as we can, not only to homeowners but ultimately to the American people by reforming GSEs. I hope this is a big first step today.

I wish to take a minute to commend my colleague, Senator Dodd, chairman [Page: S6519]

of the Banking Committee. As I enjoyed my 4 years serving as chairman, I also enjoy working with Senator Dodd and his staff. I wish to commend his staff as well as my staff, our Republican staff on the Banking Committee, including Bill Duhnke, Mark Oesterle and others, for all the work they have done here, night and day, and it is not over yet.

I yield the floor.