Upon Senate Agreement To Produce Bipartisan Housing Relief Package, Menendez Speaks On Senate Floor

Upon Senate Agreement To Produce Bipartisan Housing Relief Package, Menendez Speaks On Senate Floor

Member of Banking Committee lays out hopes for final bill, says bailout for Bear Sterns without action for homeowners is wrong

Washington - Today, it was announced in the Senate that a bipartisan deal is being worked on in order to advance a housing relief package that Democrats have been attempting to pass for weeks. Senator Robert Menendez (D-NJ) took to the Senate floor in the afternoon to speak about his hopes for the final package and to stress the need for assistance for homeowners. Senator Menendez pointed out that, even though the Bush Administration undertook an overwhelming effort to save Bear Sterns, it has only taken baby steps toward helping to save homeowners from foreclosure.

"When it was clear that a major investment bank on Wall Street was in trouble, the Bush Administration rushed to the scene like firefighters responding to a five-alarm blaze," said Senator Menendez. "But a full year into the subprime mortgage crisis, they have done nothing but hit the snooze button on the alarm as millions of Americans watch their dreams of homeownership go up in smoke.

"It's time that we react with the same urgency and seriousness, no matter if the people who are in financial trouble occupy an office building or a row house. I'm hopeful that today, finally, there is a glimmer of hope for homeowners who have been left to fight this battle alone. It's clear that members on both side of the aisle know that it is time to act. And it's clear what our goal has to be: helping families keep their homes."


Full text of remarks, as prepared for delivery:

M. President, a month ago I came to the floor to speak on behalf of America's homeowners. Since then, tens of thousands of families have lost their homes.

Since then, we've been watching home prices fall. We've been watching foreclosure rates skyrocket. We've been watching tens of thousands of Americans lose their jobs.

In my home state of New Jersey, over the next two years, we expect more than 57,000 houses to be lost to foreclosures. That means 57,000 families who will have to hand over the keys to their home.

57,000 families will be forced to say goodbye to the place where they are nurtured and comforted, the place where they live through the good and the bad, the place they come home to every night. In the words of families who know what it feels like to lose a home, they'll feel like they've lost everything.

Nationwide, the number of foreclosures that are going to happen if we don't act is unfathomable: two million. Two million American families are in line to lose their homes over the next two years.

Everyone stands to lose from those foreclosures. Lenders report losing tens of thousands of dollars on each foreclosure. Neighbors see the values of their own homes drop. And when we see that 63,000 Americans lost their jobs a month ago, when we see weak earnings reports from businesses, wild swings in the stock market, and the collapse of a major firm on Wall Street, we can see that this housing crisis is truly shaking the entire economy to its core.

We all know that the heart of this economic downturn is the housing crisis. So the question is, how long are we going to watch, before we realize it's time to take action?

When it was clear that a major investment bank on Wall Street was in trouble, the Bush Administration rushed to the scene like firefighters responding to a five-alarm blaze. But a full year into the subprime mortgage crisis, they have done nothing but hit the snooze button on the alarm as millions of Americans watch their dreams of homeownership go up in smoke.

It's time that we react with the same urgency and seriousness, no matter if the people who are in financial trouble occupy an office building or a row house.

I'm hopeful that today, finally, there is a glimmer of hope for homeowners that have been left to fight this battle alone. It's clear that members on both side of the aisle know that it is time to act.

And it's clear what our goal has to be: helping families keep their homes.

I'm pleased that we've made what seems to be an important breakthrough in this Chamber. I have the utmost faith in both Chairman Dodd and Ranking Member Shelby that they understand the urgency at hand, and that they will do their best to put forward a workable solution that we can all support. I certainly hope it's one I can support.

But I strongly support the Reid bill as it is, and I would hope that bipartisanship won't mean we stray far from providing the direct assistance that homeowners need. So there are a few key steps that the final bill has to take.

First, we need to provide funding for counseling in order to reach and help families at risk of losing their homes. Many American families are sitting around their kitchen tables, looking through their mortgage bills, their finances, and bank notices - and they don't know where to turn.

These counselors could offer them real solutions and options to help them avoid receiving that foreclosure notice. The Reid bill puts forward $200 million to make sure counseling reaches those who need it most.

Second, we need to provide funding to allow communities with high foreclosure rates to access Community Development Block Grants. Communities can use these funds to purchase foreclosed properties for rehabilitation, rent or re-sale.

Having a foreclosed home sit abandoned in a community doesn't benefit anyone-it decreases surrounding home values and can attract crime and vandalism. The bottom line is that foreclosures destabilize neighborhoods. The funds in this bill allow communities to stop that spiral before it starts.

Some argue that stepping in to help our communities recover from the housing crisis would somehow be a blow to the concept of personal responsibility, because some homeowners made bad choices in signing up for subprime mortgages.

Don't get me wrong, personal responsibility is important. That's why we need greater support for homeowner education, for foreclosure counseling and financial literacy, so anyone thinking about buying a home will be able understand the terms of their mortgage, even the fine print, and have the tools to protect themselves.

But personal responsibility isn't just important for homeowners. Every participant in the life of a loan needs to step up and take real responsibility and action.

Every broker, lender and realtor, every appraiser, regulator, credit rating agency and investing firm needs to make changes if we have any hope of quieting this storm. The time for blame-games is over. The time for action has come.

Third, I hope this body looks carefully at a provision that could help more than 600,000 families stuck in bad loans keep their homes.

I know some of my colleagues are very concerned about this provision, which would give judges in bankruptcy proceedings the discretion to modify loan terms. But the fact is, this provision is narrowly-tailored, it's a one-time limited fix, and in the end, it's a win-win for borrowers and lenders alike.

This provision alone would help over 14,000 families in my home state of New Jersey avoid foreclosure. That would be a savings of almost $5 million in home values.

My good friend Senator Durbin has done an excellent job at hammering out a compromise, and I hope my colleagues will give it careful consideration.

M. President,

As we in this Congress are debating how best to help homeowners, how best to end the housing crisis and how best to get our economy back on track, we have to see the bigger picture. There's a lot at stake, no matter who we are, no matter if we have a subprime mortgage or not.

When the house next to ours gets boarded up, it affects the value of our property, too, and how safe we feel walking around our neighborhood at night.

When a neighbor of ours has to declare bankruptcy, and is forever saddled with debt they can't pay, they shop less at our stores and purchase fewer of the services our communities offer-and that hurts our community's bottom line.

When a non-profit organization in Jersey City is close to finishing the building of its new arts center so it can give kids an opportunity to do something productive after school and stay away from gangs, and they can't get the last bit of money they need because of this credit crunch and this housing crisis-it affects us all.

Martin Luther King, Jr. reminded us that "we are all tied into a single garment of destiny," that "we cannot walk alone."

M. President, this is a crisis that we're all in together. There is no reason we can't all work together to end it.

Thank you, I yield the floor.

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