Senate Proceeding on Apr 27th, 2009 :: 3:59:25 to 4:13:35
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3:59:09 to 3:59:29( Edit History Discussion )

out that there are stripping the copper ping out of that house. the next thing you know rumors ab at night that' the rea lot yif these -- reality of these neighborhoods and reality of mortgage foreclosure. it isn't just the economic loss for the neighbors. it is the loss in a neighborhood spirit.

3:59:30 to 3:59:50( Edit History Discussion )

that's what foreclosure brings us. and you say to yourself, well, you know, that family that was in there, they made a terrible decision on a mortgage. well, some of them did. some of them were misled into the terrible decisions. ever been to a closing to buy a home? remember that pack of papers?

3:59:51 to 4:00:11( Edit History Discussion )

they turn the corner over and say keep signing. what is this? a federal government form, don't worry about it. the bank looked at it and the realtors looked at it, it is fine. keep goings keep going, here is a check. now, here's in 60 days make your first payment. secretive in some of the documents were provisions people did not understand.

4:00:12 to 4:00:33( Edit History Discussion )

and sometimes the whole process was a fraud. in the worst of times many of these mortgage brokers were saying to people, how much do you make? well, we will put y

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with an adjusted rate mortgage and the house will go up in value and it will work out fine and they were called "no mortgages meaning no documentation. the borrower, the person buying the home did not have to produce a single document to establish their income or their net worth. we have a little provision in the law, the department of

4:00:55 to 4:01:16( Edit History Discussion )

treasury, the internal revenue service, if you spend a few dollars and fill out a verify what your income is so that the people loaning the money are going to have verify insurance companies. that wasn't even asked for. wasn't even why? because the folks doing the deals wanted to get them done and out of town. and they did. and they last behind a mess in community after community in

4:01:17 to 4:01:37( Edit History Discussion )

city and now as these people face foreclosure in their homes, many ofhem don't know where to turn. they go back to the bank and they say to the bank, come on, understand that i can get a low interest rate now, maybe i can stay in this home. i am not going won't be foreclosed and the

4:01:38 to 4:02:00( Edit History Discussion )

banker credit rating on you, and it turns out that you are upside down, you owe house than it is worth, therefore your credit rating is too low, therefore we can't renegotiate the mortgage and therefore you will face foreclosure. that's the reality. the catch 22 reality of mortgage foreclosure today.

4:02:01 to 4:02:21( Edit History Discussion )

i told a story just the other day. i got on an airline to fly from and i do that a and a flight attendant wanted to talk to after they served the coffee and soda and drinks around the plane she knelt down in t aisle next to me, people were looking

4:02:22 to 4:02:43( Edit History Discussion )

around all about and she said, senator, i'm a single mother. i've got three kids. i've been a flight attendant on this i go to work every day. work real har got a house. just outside of chicago-land area in the metropolitan area. she says, i've got a 7% mortgage on it and i can't do it.

4:02:44 to 4:03:06( Edit History Discussion )

i can't make the payments. but i know that they're offering mortgages now that are down in the 4% and 5% range and i think i can swing it but sit down and talk to me. nobody will talk to me. i have to default on my payment and go into foreclosure before anybody will sit and talk to me. and that's the reality of what housing is in many places across america.

4:03:07 to 4:03:27( Edit History Discussion )

so two years ago i came up with this idea of bankruptcy code. currently, under the bankruptcy code, if you are facing bankruptcy and you own several pi a vacation condo in florida, a ranch or a farm -- and you go

4:03:28 to 4:03:48( Edit History Discussion )

into bankruptcy, the bankruptcy judge can take a look the mortgage which is for your condo in florida and that bankruptcy judge can say, well, th condo is x, therefore, we'll reduce the mortgage to x, we'll change the interest rate here and we believe you can make the payment. you can keep your condo.

4:03:49 to 4:04:10( Edit History Discussion )

same for your farm. same for your ranch. but your home, no deal. the bankruptcy court cannot even consider cha terms on your home. that's been in the law for a while. i think it's a terrible provision. the people who want to protect that many of the banks that brought us this crisis, many of the

4:04:11 to 4:04:32( Edit History Discussion )

banks that have been given billions -- not all of them; i'll tell you the good guy later on -- but many of these banks that have benefited from the hundreds of billion dollars taxpayers he put on the table have said when it comes to a bad mortgage and a foreclosure, tough deal. they made a bad decision. they got to pay for it. really?

4:04:33 to 4:04:53( Edit History Discussion )

these bankers who are raking in the dollar because of their bad deals, portfolios have said to these poor people facing foreclosure "tough." "tough." you should have no should have kno better.

4:04:54 to 4:05:15( Edit History Discussion )

you shouldn't make that mistake. you should show the foresight we show in the banking that is what this debate is about. i don't want to see more people in bankruptcy. that's not a good outcome. but if the lenders of these mortgages know that at the end of the road after everything else has gone on there may be a bankruptcy judge w

4:05:16 to 4:05:36( Edit History Discussion )

down and look at that mortgage and say to that fligh attendant, you -- you are offering mortgages at 4% and and if you offer this woman 4.5%, she can make the payments and keep her home. the court will order that. if they knew that would happen at the end of the day, i think the bankers would be in position where they would want

4:05:37 to 4:05:58( Edit History Discussion )

to sit down before it occurs. and try to avoid foreclosure. avoid the terrible outcome for the family and the neighborhood. 1.7 million could save their homes with my amendment. i didn't come up with that figure, the analysts did. it makes a very small change in

4:05:59 to 4:06:21( Edit History Discussion )

the result in that. if it family that wins and neighbors that win, the banks win. to take a home through foreclosure? a minimum, i'm told in a hearing i held, $50,000. that's what they the legal fees and things that

4:06:22 to 4:06:42( Edit History Discussion )

are involved in a foreclosure on property. and then you know what happens to into foreclosure? you know who owns them after the foreclosure? the bank. and now that bank has to worry about cutting the grass, making sure it's a presentable

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property, providing necessary. and what might happen if somebody started squatti the property which is starting to happen? or drug gangs started invading the building? now it is a bankers' problem -- not one they signed up for but one they face. we can save the homes of 1.7 million families with this issue.

4:07:05 to 4:07:26( Edit History Discussion )

the mortgages that are under discussion here were risky instruments. too many lenders threw caution to the wind and they issued the subprime mortgages. no doc mortgages rate increases and a lot of people were sucked in and taken advantage of. the mortgage bankers association and their cronies scoffed when

4:07:27 to 4:07:47( Edit History Discussion )

we told the to have even more foreclosures but the number continues to grow. this is the cancer at the heart of this recession. this is what we have to address. this president has worked overtime with a recovery and reinvestment act putting money back into the economy, saving

4:07:48 to 4:08:08( Edit History Discussion )

jobs, creating jobs. we've get to get to the heart of the housing crisis. we've become a steady decline of neighborhoods values in america. it affects us all. the institution that held billions of dollars of these mortgage assets began to fail --

4:08:09 to 4:08:30( Edit History Discussion )

you rember the litany -- bear stearns, fannie mae, freddie mac, lehman brothers, a.i.g., the global financial syste started to meltdown. and it started with these bad mortgages. and then the american tax were asked to provide $700 billion to bailout institutions just like the ones i've named. lending dried up.

4:08:31 to 4:08:51( Edit History Discussion )

banks across america and businesses cut back, millions of american workers have lost their jobs, and in my home state of illinois we were losing on average 1,200 day! and it's unfortunate that it continues. we think we are starting to turn the corner but ever so slightly.

4:08:52 to 4:09:15( Edit History Discussion )

trillions of savings of workers and retirees happened to everybody in an instment with a 401(k) or ira or even a pension plan. and eventually, even safe mogages were it started with subprime mortgages and now it is starting to spread.

4:09:16 to 4:09:37( Edit History Discussion )

credit suisse now 8.1 million mortgages could fail in the next few years. it isn't over. what does that represent? one out of america could face foreclosure. when i gave the speech a year ago, p

4:09:38 to 4:09:59( Edit History Discussion )

and said, durbin, you're exaggerating. it's not that bad. it will get well. people will be fine. that hasn't happened. just the opposite has happened. it doesn't have to be this way. many of these mortgages can be slightly modified and people can stay in their homes. the banks can still families can still have a place for a future.

4:10:00 to 4:10:20( Edit History Discussion )

if we could sav the value of the assets based on the mortgages could regain much of their value. thenstitutions that hold billions of dollars of the assets like citigroup, j.p. morgan, bank of america, wells fargo and many others, could return to full health more quickly. confidence might return in the financial system. the american taxpayers would get

4:10:21 to 4:10:42( Edit History Discussion )

their money back much earlier from the institutions we bailed out withard-earned taxpayer dollars. lending would ramp up at a more rapid payments, businesses would feel more confidence. the banks have said we don't need any change in the la we'll take care of this problem. and look what's happened. as they promised us they would

4:10:43 to 4:11:03( Edit History Discussion )

take care of it, they didn't. re and more default and faced foreclosure because they won't sit down and make the deal. why wouldn't they? if they face $50,000 in each of the foreclosures in losses, if they have all the new obligations at the end of the day, why wouldn't they sit down? i will tell you why i think.

4:11:04 to 4:11:24( Edit History Discussion )

for many of them, they don't want to concede the fact that they created this cris; secondly, many of them feel that at the end of the day uncle sam and the taxpayers of america will ride to the rescue buying up the mortgage securities, taking care othese

4:11:25 to 4:11:45( Edit History Discussion )

saving them after the bottom falls out of the real estate market and housing market in america. what an awful outcome, that all these families would have to go through all the suffering, t all these neighborhoods would have all these problems so that at the end of the day the banks that made mortgages would be rescued. that must be what they're

4:11:46 to 4:12:06( Edit History Discussion )

thinking. the groups that are leading the charge against me on this are familiar names on capitol hill. the mortgage bankers association, the people who brought us this wonderful subprime mortgage crisis, the mortgage bangers association oppose the financial services

4:12:07 to 4:12:30( Edit History Discussion )

roundtable, the biggest names in financial services in this nation, the ones that have had their hands out for federal money, opposed this idea of helping people facing foreclosure. association. what what a disappointment that a great association like that representing so many good banks would not even sit down at the

4:12:31 to 4:12:51( Edit History Discussion )

table to discuss this provision. it is, it's a source of great disappointment to me because as a congressman and senator i work with them on so many issues. i've never found them more unyielding and unreasonable than on this issue. they say, don't wore about it, senator, we're experts, we're going to handle it. don't tell us what do. well, many of those same banks

4:12:52 to 4:13:12( Edit History Discussion )

are the first in line when it comes to federal money. in effect the they've said we created the rotten mortgages in the first place and slice them up into securities and sell them all over the world as if there were no risks although better. they say we made billions in profits on the backs of the home owners and took billions more

4:13:13 to 4:13:33( Edit History Discussion )

mortgages went bad but don't make us solve the crisis, the mortgage bankers say, we will handle it by ourselves. time will take care of it. well, that was, message of the leading bankers association. when, for the last several months we have begged and

4:13:34 to 4:13:54( Edit History Discussion )

pleaded with them to work this out, they they have been adamant. and the independent community bankers of america, the national association of federal credit unions, a group which i alway supported in the past, they have had a little different message. they have said, we didn't cause this crisis unimou