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FOR IMMEDIATE RELEASE
October 2, 2008
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Contact: Zach Goldberg
202-225-5801 (office) |
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HOLT URGES HOUSE LEADERSHIP TO TAKE UP MORTGAGE REPAIR INITIATIVE
In Letter, Holt Raises Possibility of Lame Duck Session to
Pass Updated ‘Home Owner’s Loan Corporation’ Program
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(Washington, D.C.) – U.S. Representative Rush Holt (NJ-12) today wrote to Speaker Nancy Pelosi and Majority Leader Steny Hoyer, urging the House of Representatives to consider a lame duck session to take up a mortgage repair initiative, as one is not included in the Emergency Stabilization Act. Holt wrote that bad mortgages are at “the root of the problem” and that Congress needs to help Americans saddled with these bad mortgages. He suggested a program similar to the Home Owner’s Loan Corporation (HOLC), which the Federal Government created in 1933 in that mortgage crisis. The program, which lasted 20 years, shored up a collapsing market by purchasing delinquent mortgages at a discount and working with homeowners to restructure the mortgages into more manageable terms. Congress and President Roosevelt authorized HOLC for $4.75 billion – or $76 billion in today’s dollars. With this investment, in its first two years, HOLC helped more than 1 million homeowners. When the HOLC finally ended, it showed a net $14 million surplus for taxpayers.
The full text of Rep. Holt’s letter follows:
October 2, 2008
Dear Madame Speaker and Mr. Leader:
I respectfully request that if we are unable to include a strong mortgage repair provision in the upcoming Emergency Economic Stabilization Act that this body reconvene in a lame duck session to consider such a proposal. Further, I would like to request that we consider a strong Economic Stimulus Bill that would help aid our economy in this troubled time.
I supported the Emergency Economic Stabilization Act when it came to the floor on the 26th and I expect to do so again when it comes to the floor on Friday. I agree that we need to act quickly to staunch this crisis of confidence in our financial services sector and assure all Americans that our financial institutions are solvent. However, if we do not address the origins of this problem we will be forced to come back again to address the symptoms.
At the root of this problem is that bad mortgages that mixed with the good mortgages have poisoned the financial papers. We need to help Americans saddled with these bad mortgages. It is estimated that hundreds of thousands currently solvent mortgages will turn toxic by next year further destabilizing our financial institutions. It is our responsibility to prevent this from happening.
I suggest that we consider a model that has been proven to help the homeowner, the neighborhood, the community, and the investor - the Home Owner's Loan Corporation (HOLC). The Home Owners' Loan Corporation of the 1930's through the 1950's helped people with their mortgages. It was a Federal program that shored up a collapsing market and rescued a million homeowners. Incidentally, when it finally went out of business, it showed a net plus for the taxpayer.
I also request that we take up soon an economic stimulus package that will help those suffering on Main Street. It is deeply concerning to me and infuriating to our constituents that as we have focused on the crisis on Wall Street we have not paid comparable attention to American families that have been struggling for months. The unemployment rate has been steadily increasing, reaching 6.1 percent this month, the highest level since 1992. More Americans lost their jobs in August, and 605,000 have lost their jobs this year. Employed Americans are continuing to struggle with increased energy and food costs and decreasing wages. Many are at risk of losing their pensions due to bad decisions made by Wall Street. I respectfully request that you do not wait for a new administration to help Americans who are suffering from this economic downturn and that your reconvene Congress after the elections to address our nation's pressing economic concerns.
If you have any questions or if I can be of assistance in any way please do not hesitate to contact me at 225-5801.
Sincerely,
RUSH HOLT
Member of Congress
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