May 08 2012

Shelby: It’s Time to Get Serious About Fixing the Housing Market

U.S. Senator Richard Shelby (R-Ala.), ranking Republican on the Committee on Banking, Housing and Urban Affairs, today made the following statement at a hearing on mortgage finance reform.

Statement of Senator Richard C. Shelby
Committee on Banking, Housing and Urban Affairs
May 8, 2012

“Thank you, Mr. Chairman.  Today the Committee will consider ways to aid our troubled housing market by expanding refinancing opportunities.  While this topic is timely, it is disappointing that four years after the bursting of the housing bubble, the Committee has still not produced comprehensive housing legislation. 

“As a result, little has been done to address the serious problems in our housing markets.  FHA still needs to be reformed.  Foreclosures remain at record levels.  Millions of mortgages are underwater and Fannie and Freddie continue to lose money at the expense of the American taxpayer.  In fact, while taxpayers have spent almost $190 billion bailing out the GSEs, the only work product we have received from the Administration is a brief discussion piece that lists three policy ‘options,’ but does not make any recommendations.  Meanwhile, billions of dollars have been spent on piecemeal programs like HAMP and the so-called ‘Hardest Hit Fund,’ but as SIGTARP has repeatedly noted, none of these programs have achieved their expected results.

“Admittedly, the troubles facing our housing market are complex and there are no easy solutions. Finding answers will require careful study and crafting legislation based on facts and rigorous analysis.  Unfortunately, rather than doing the hard work required to solve problems, some have chosen to create scapegoats.  Blaming certain regulators for not undertaking massive principle reductions may make for a good one-day news story, but it is not an effective means for solving the problems plaguing our housing market.

“Plus, paying banks billions of taxpayer dollars to write down mortgages is just another backdoor bailout of Wall Street.  Given how the Administration now praises TARP, maybe another Wall Street bailout is just what it wants.   The American people, however, are tired of bailouts.

“It is time to take a more serious approach to fixing the housing market.  As I have stated before, my Republican colleagues and I are willing to work within the Committee process to craft effective, bipartisan legislation.  The Committee is the best forum to facilitate careful deliberations and the needed compromises.  In contrast, bypassing the Committee and proceeding directly to the floor with any legislation will almost certainly result in partisan gridlock.  Accordingly, the majority’s decision about how it will proceed with any housing legislation will likely reveal whether such legislation is a serious effort to solve problems, or just another effort to highlight differences at the expense of real compromise.

“The American people have already waited four years for housing reform legislation.  While I welcome this hearing, only time will tell whether the American people will be made to wait even longer.

“Thank you, Mr. Chairman.”