New Congress, Real Commitment

Floor Speech

NEW CONGRESS, REAL COMMITMENT

Madam Speaker, the wonderful opportunity of a new Congress is that it is not bound by the mistakes of the past.

As foreclosure rates rise in Ohio and across our Nation, it's pretty obvious that the Federal responses are not working on Main Street, whether it's the $700 billion Wall Street bailout or the $300 billion FHA loan workout program.

Citigroup, for example, was one of the big culprits that caused the financial meltdown; yet, they got paid $25 billion from the public Treasury. But Ohio, where foreclosures are raging, got nothing. Instead, out-of-State megabanks are buying up Ohio banks, while more Ohio homeowners get booted out of their homes.

Last year, in my home County of Lucas, another 4,100 homes were foreclosed. That's a minimum of 10,000, 10,000 more people who were not helped by Treasury's failed TARP program. Ohio's families alone need $20 billion to stop the real estate hemorrhage which is less than what Citibank received, and would go to real people, not ersatz and paper trades on Wall Street.

In Toledo, Ohio, you can now buy a home for $4,500, but last fall, rather than local homeowners being refinanced in this Wall Street bailout bill, one California investor figured it out. He bought 137 foreclosed properties in Toledo at auction, an auction sponsored by the very Wall Street banks that caused the trouble in the first place. Houses are being auctioned at prices so low we could have put the original occupants back in. Even cities would be able to bid on these homes on behalf of their local homeowners, their property owners, but they've not yet received any funds from the $4 billion neighborhood stabilization program that we were told was supposed to keep local neighborhoods whole.

But the Wall Street banks are cleaning up. They get the bailout money. They don't have to manage those properties. They auction them to outsiders and then they're just waiting for their taxes to be filed for 2008 at the IRS to get all those losses booked and get more back from the people of the United States.

Something is very wrong and uncoordinated with the manner in which the Federal Government is allowing equity to be bled from local homeowners and from our communities at large and awarded to Wall Street whole.

Wall Street banks that hold or sell mortgages on these foreclosed properties are not managing their property holdings. These holdings are then frequently stripped of copper, electrical wiring and other materials, further devaluing adjacent properties and decimating entire neighborhoods.

The $300 billion FHA program designed to help modify troubled mortgage loans is as ineffective as the Wall Street bailout. The program has received fewer than 200 applications nationwide since taking effect October 1 and not a single loan has been modified.

A bank's receipt of TARP funds should be conditioned on them lending money and engaging in mortgage workouts to ensure the program at least starts to work somewhat. Many banks and servicers are still reluctant to structure manageable workouts with their customers. Among them are JP Morgan Chase, Wells Fargo and Wilshire, who have received $65 billion among them in Treasury funds.

What's fair about that? May the 111th Congress pass more than just hollow legislation. Let's pass a measure worthy of the oath we took yesterday to protect our Republic from all enemies, foreign and domestic.

Jesse James robbed banks because he said that's where the money is. Well, Wall Street just robbed the biggest bank of them all, the public Treasury. It's time for Congress to blink and do what's right in the 111th Congress of the United States.

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