Johnny Isakson: “Thank you, Mr. President. Let me try to dispel what concern there may be and the concern I heard right before we…”

“Thank you, Mr. President. Let me try to dispel what concern there may be and the concern I heard right before we adjourned in August as to why not to extend the loan limits. People were afraid--and I understand the fear--that it might cause some additional liability in cost to the government and the taxpayers. Let me make something crystal clear: We are going through a terrible foreclosure problem right now in this country, not because of loan limits but because of underwriting. Underwriting today, because of the ramifications of the real estate collapse, is the most pristine underwriting I have ever seen. I was in the business for 33 years--since 1966. I have seen a lot of housing recessions go by. I have seen a lot of difficulties. This one is the worst I have ever seen, but it was not caused by the amount of loans made. It was caused by underwriting. As Senator Menendez has said, this will pay the government back because of the fee associated with the loan, in the first place. In the second place, it will answer the big objective we need to start applying in this country, and that is doing no more harm. A lot of the problems that have been manifested in the real estate industry have been manifested by our doing the harm, either in what we imposed on Freddie and Fannie or what we did not allow to have happen.…”