Senate Proceeding on Apr 30th, 2009 :: 2:23:35 to 2:34:05
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2:23:16 to 2:23:40( Edit History Discussion )

Jeff Merkley: we've done so much to help wall street. it is time to do a lot to help our families, our working families across america keeping them in their homes and stablizing our financial system.

2:23:35 to 2:34:05( Edit History Discussion )
Speech By: Charles Schumer

2:23:41 to 2:24:01( Edit History Discussion )

Charles Schumer: mr. president, i note the presiding officer: will the senator please withhold his quorum call? mr. merkley: yes. the presiding officer: the senator from new york. mr. schumer: thank you, mr. president. i thank you for the time to speak. first i want to compliment my colleague from oregon for excellent remarks on this issue and thank him for being so

2:24:02 to 2:24:22( Edit History Discussion )

Charles Schumer: steadfast in working towards this issue. he has spoken up many times at our meetings and caucuses, et cetera, about it. now, i too rise in support of this amendment that had would alter the bankruptcy code to allow bankruptcy judges -- by now, mr. president, we're all familiar with the problems.

2:24:23 to 2:24:45( Edit History Discussion )

Charles Schumer: too many people borrowed too much money from too many banks that were too willing to lend. there is plenty of blame to go around. and now millions of american families are facing foreclosure over the next few years. as a result of products like 228, pay option

2:24:46 to 2:25:07( Edit History Discussion )

Charles Schumer: a.r.m.'s and interest-only loans that disguise the homeownership. we've been pushing banks to do loan modify indications for more than two years now, and, frankly, we don't have much to show for it. while i'm optimistic that the administration's plan will produce a significant improvement in modification efforts, i think it's almost

2:25:08 to 2:25:29( Edit History Discussion )

Charles Schumer: certain that there will be intrang enter servicers an investors who will try to block the process to squeeze every last cent out of a home. even if that means that it is costly for community, and the country at-large. we've offered lenders and servicers plenty of carrots.

2:25:30 to 2:25:50( Edit History Discussion )

Charles Schumer: but it is unfortunately clear that we also need a stick. the reason that the programs in the past have largely not worked is it was just carrots and no stick, and you need both. that's what the legislation gives

2:25:51 to 2:26:11( Edit History Discussion )

Charles Schumer: to push servicers, lenders and investors to act in the best interest of the economy as a whole. this amendment to the bankruptcy law so important because of the changes that the mortgage indust has undergone in the past few decades. it used to be that when you wanted a mortgage, you would go to your local bank and they would lend you the money and

2:26:12 to 2:26:34( Edit History Discussion )

Charles Schumer: they years. that meant if you ran into trouble you had a familiar, friendly place to turn to, someone who knew you and your family and someone who had an interest to work out your mortgage payments so that y could stay in your home. and it meant that the bank -- one entity had an interest in the whole mortgage.

2:26:35 to 2:26:56( Edit History Discussion )

Charles Schumer: it wasn't chopped up in so many pieces, happened. over the past two decades with the growth of securitization it has all changed because the mortgage has been into pieces, sold off to investors around the world. they're often difficu identify and impossible to contact. their pry martel concern

2:26:57 to 2:27:19( Edit History Discussion )

Charles Schumer: squeezing every last cent out of the mortgage loan, whatever the impact on families. on homeowners. that means if the best outcome for even one of those investors is foreclosure, a homeowner is not likely to get the help he or she needs to stay in their hom and one other point that's

2:27:20 to 2:27:41( Edit History Discussion )

Charles Schumer: vital, i think here, mr. president, it may be that there are 40 investors who each have a piece of the mortgage it may be that 39 of them have an interest in -- sorry. it may be that 39 of them have an interest in a modification. but if that one

2:27:42 to 2:28:07( Edit History Discussion )

Charles Schumer: shareholder, investor who probably got the highest rate of interest because he or she took the most risk says no, the whole process comes to a hal not only bad for the poor homeowner. it's bad for the other 39 investors and it's bad, most of all, for our economy as a w

2:28:10 to 2:28:31( Edit History Discussion )

Charles Schumer: it's not that one intrangent investor who will say i lose all of my money if there is a loan modification if i sit and wait for five years, then maybe housing price also come up to where they should be and i get my money back. in the meanwhile the economy goes down the adrain for everyone -- down the drain for everyone. the lower housing prices get,

2:28:32 to 2:28:53( Edit History Discussion )

Charles Schumer: the less likely banks are to loan, the less likely that banks are to lend, the less money there is in the economy. and recession gets worse and worse and worse. so it's notnly a problem for the home own when

2:28:54 to 2:29:14( Edit History Discussion )

Charles Schumer: transgent bondholder, it is a problem for the other investors who will lose money in the foreclosure, it is a problem for the neighbors for the homeowner whose to decline and the country as a whole since our housing is already inundated with a glut unsold homes destabilizing the financial sector.

2:29:15 to 2:29:36( Edit History Discussion )

Charles Schumer: how do you get that bondholder to the table? well, there's a contract. and so we cannot break a contract by law. but the one place in the united states constitution where a contract can be modified is bankruptcy court. bankruptcy courts are the only constitutional way to overcome

2:29:37 to 2:29:58( Edit History Discussion )

Charles Schumer: the securitization contracts and restore some power to the home owner himself or herself. moody's koi.com said that loan modifications that would have happened are not going to occur.

2:29:59 to 2:30:20( Edit History Discussion )

Charles Schumer: it shows that 1.25 homeowners whose servicers are unwilling to help them will not have the protection of the bankruptcy courts and almost a half million homeowners who would have modify indications won't because servicers calculate that more important to them than a modification. the proposal is result of

2:30:21 to 2:30:42( Edit History Discussion )

Charles Schumer: and weeks of talks that never yielded compromise that we hoped for. i see my colleague from the state of illinois, senator did yousenatodurbin whoorked so long and hard on this and deserves our thanks. he was in the middle of trying to get this done. senator dodd and myself tried to help, but to no avail.

2:30:43 to 2:31:04( Edit History Discussion )

Charles Schumer: it is clear that parts of the mortgage industry were never really interested in meeting us halfway as the negotiations went forward, they moved the goalposts back and back and back. and when concessions were made that were well beyond what anyone thought, they just walked away because they never really wanted a deal.

2:31:05 to 2:31:26( Edit History Discussion )

Charles Schumer: hindsight is wonderful. it's unclear if those who entered the discussion, at least some of them ever entered in good faith. but the industry stakeholders who obviously have the most to lose ought not hold total sway. just because they walked away from the table doesn't mean we

2:31:27 to 2:31:47( Edit History Discussion )

Charles Schumer: can't vote our conscience on a proposal that would help preserve millions of families and get our economy going again. what makes me so eager for this proposal to pass an worked long and hard, as much as i want to help ind homeowners -- and believe me, i

2:31:48 to 2:32:12( Edit History Discussion )

Charles Schumer: do -- our economy's at risk. millions who might rent or have paid their mortgage could lose their jobs. and it all comes down to this proposal because if we decrease foreclosures, we decrease the

2:32:13 to 2:32:36( Edit History Discussion )

Charles Schumer: decline in home prices which decreases -- i'm putting it backwards. if we decrease foreclosures, we will find a floor to the home mortgage, which will then allow banks to lend which will then let our economy go a it's like the knee bone to the thigh bone to the hipbone. foreclosures are connected to the housing mortgage; mortgaging market is connected to the health of banks; health of banks

2:32:37 to 2:32:57( Edit History Discussion )

Charles Schumer: is connected to the economy. so when president obama announced his foreclosure prevention plan, it included lots of lure banks to participate but called for some tough medicine. this bankruptcy proposal -- and both are needed, we need carrots and sticks -- the president's

2:32:58 to 2:33:19( Edit History Discussion )

Charles Schumer: effective if parts of it are sacrificed for political expediency. loan servicers shouldn't get to accept parts of the president's plan they like and reject others. that was never the deal. to reject this provide only sweeteners and stick. to get banks, servicers,

2:33:20 to 2:33:40( Edit History Discussion )

Charles Schumer: investors to modified troubled loans. the bottom line is fewer homes will be saved for american families, and the defeat of this amendment is a sad day for homeowners, for the housing market, for institutions, overall economy. allowing t unconscionable. i urge my colleagues to pass this amendment.

2:33:41 to 2:34:01( Edit History Discussion )

Charles Schumer: we have an opportunity here to make a major dent in t cris, prevent declines in home prices. and let's understand, once again, the housing crisis remains at the core of our economic problems. vongs home prices continue to de -- as long as home prices continue to decline -- and without this legislation they're far more

2:34:02 to 2:34:06( Edit History Discussion )

Charles Schumer: likely to -- our economy remains at great grave risk of further contraction.