|3:40 PM EDT||
Brad Sherman, D-CA 27th
Mr. SHERMAN. Mr. Speaker, the facts are these: Homeowners have signed mortgages where they can't afford to make the payments, especially as they are adjusted upwards. We need to write-down the principal amount to something that these good homeowners can afford. But we are told ``don't bail out the lenders.''
There are two ways to write-down the principal amount of a loan: an involuntary way through the bankruptcy court, and we had a bill before this House which authorized the bankruptcy court in very limited circumstances, very tailored, to write-down the balance of the loan. Don't bail out the lender, just tell the lender they have to take less. That bill is not going to pass. It is opposed by Republicans in the Senate.
The second way is a voluntary way. You make a fair offer to the lender that, if they will write-down the principal amount, then they will get a guarantee of that lesser amount from the government--so at least they will get paid something. Now we are told to vote against this bill because it bails out lenders.
Some are giving hypocrisy a bad name.
If you are going to help homeowners, you have to write-down the balance of the loan. And people come to this floor and they say well, we can't do it the voluntary way, and we can't do it the involuntary way; but just as soon as we find some other way, they will be happy to bail out homeowners.
The fact is they have voted against using the bankruptcy court to write- down the principal amount and not give the lenders anything. And now they are saying when we make a fair offer to the lenders to do the same thing, we are bailing out the lenders.
I have a lot of ``respect'' for anybody who can come to this floor and just say they don't want to help these homeowners at all. That's an honest position. But to say you are against the voluntary and involuntary, that's wrong.