By Brandon Moseley
Alabama Political Reporter
Tuesday May 8, 2012, Senator Richard Shelby (R) from Alabama spoke before the Committee on Banking, Housing and Urban Affairs about the housing crisis which has gripped the nation since the middle of 2008. Senator Shelby is the ranking Republican on the Committee on Banking, Housing and Urban Affairs.
Sen. Shelby told the committee: “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.”
Sen. Shelby continued, “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.”
Sen. Shelby said, “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.”……..“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.”
Since World War II, the value of housing rose at an annual rate of 5 to 7% with short recessions until 2008. Convinced that housing values would continue to rise the value of the median American home rose 124% from 1997 to 2006 while the median household income remained stagnant. The housing market collapsed in 2008 when millions of Americans could not afford to continue to service loans on their homes. Foreclosures spiked and home values plummeted 30 to 40% in some markets. Millions of homeowners have seen their home equity decrease substantially and millions more owe more on their homes than the home is presently worth and millions of homes remain vacant.
To read Senator Shelby’s comments in its entirety: