Jim Bunning: “I make this motion to refer the House message on the housing bill to the Banking Committee so the Senate can have all…”

“I make this motion to refer the House message on the housing bill to the Banking Committee so the Senate can have all the facts about who will benefit from this legislation before we go forward. As anyone who has looked at the 631 pages of the substitute text can tell, this is a very serious piece of legislation. Hundreds of billions of dollars are on the line under the various parts of this bill. One part of this bill alone is a $300 billion refinancing program for problem mortgages. That part of the bill will open the door of the FHA to borrowers who have defaulted on their mortgages. I question the wisdom of that program. But for the moment, I want to focus on who will benefit rather than the losses the taxpayers will face. The supporters of this bill say borrowers will benefit and lenders must take a loss on the loan before it can be refinanced. But that is not the whole truth. Lenders are already facing losses on these loans, so moving a loan into the program puts an end to the bleeding, and the FHA assumes the risk of all future losses. What that means is the lenders and others who hold mortgages are going to dump their worst $300 billion of mortgages on the FHA, without requiring so much as a thank-you to the taxpayers. If we are going to give such a large gift to the big banks and the investment houses, we should at least know to whom we are sending it. Some of the lenders who are blamed for creating this housing crisis stand to benefit the most.”