Video archive of the US Congress

Senate Proceeding on Apr 3rd, 2008 :: 3:27:12 to 3:32:00
Total video length: 8 hours 32 minutes Stream Tools: Stream Overview | Edit Time

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Richard Durbin

3:25:55 to 3:27:12( Edit History Discussion )
Speech By: Richard Durbin

Richard Durbin

3:26:57 to 3:27:12( Edit History Discussion )

Richard Durbin: i appreciate what you're saying and, in fact, i anticipated that and i hope i'm ready for it. i'm sure it's going to be difficult to satisfy the senator from illinois, though. senator durbin's amendment

Chuck Grassley

3:27:12 to 3:27:27( Edit History Discussion )

Chuck Grassley: will not only increase interest rates on mortgages and make homeownership more expensive for everyone, many experts tell us that this proposal will also have an adverse impact on financial markets because the

Chuck Grassley

3:27:12 to 3:32:00( Edit History Discussion )
Speech By: Chuck Grassley

Chuck Grassley

3:27:27 to 3:27:40( Edit History Discussion )

Chuck Grassley: difficulties and uncertainty in valuing the mortgages that back up securities. in addition, innocent investors would be hurt so the durbin amendment will cause other adverse impacts beyond higher

Chuck Grassley

3:27:40 to 3:27:54( Edit History Discussion )

Chuck Grassley: costs of home loans. proponents of this amendment, particularly the cram-down provisions, argue that primary residences should be crammed down in bankruptcy just as second homes, family farms, and

Chuck Grassley

3:27:54 to 3:28:09( Edit History Discussion )

Chuck Grassley: boats are. but there are good reasons why primary homes are treated differently. interest rates and down payments for vacation homes are significantly higher than for primary homes. if we're to start

Chuck Grassley

3:28:09 to 3:28:23( Edit History Discussion )

Chuck Grassley: treating primary homes the same as vacation homes, then interest rates will rise to the level of second homes where cram-down is permitted. chapter 12, referred to by the senator from illinois,

Chuck Grassley

3:28:23 to 3:28:36( Edit History Discussion )

Chuck Grassley: only apply to very small commercial farming and ranching operations, not all farms and not all ranches. there are very significant requirements that need to be met for chapter 12. so we aren't talking about the

Chuck Grassley

3:28:36 to 3:28:58( Edit History Discussion )

Chuck Grassley: same number ofoans that could be eligible under the durbin amendment. and i would be glad to give some statistics on that, but i'm going to wait and see if the senator from illinois is -- is satisfied

Chuck Grassley

3:28:58 to 3:29:21( Edit History Discussion )

Chuck Grassley: . i would give -- i would give these numbers because i think they're significant at this point. according to u.s. courts, the government web site for fiscal year 2006, there were only 348 chapter 12 filings.

Chuck Grassley

3:29:21 to 3:29:35( Edit History Discussion )

Chuck Grassley: in fiscal year 2007, 361 chapter 12 filings. and this would compare to what at least i believe are possibly 600,000 filings under yours. moreover, it took congress over two decades to make chapter 12 a

Chuck Grassley

3:29:35 to 3:29:54( Edit History Discussion )

Chuck Grassley: permanent part of the bankruptcy code because people were concerned about the possible negative consequencesve to allowing cram-down for family farm. chapter 12 was initially only nl enacted as a temporary

Chuck Grassley

3:29:54 to 3:30:14( Edit History Discussion )

Chuck Grassley: provision pr ovision. chapter 12 only applies to a limited number of farms, those that are less than $3.2 million in debt. debt has to arise out of the farming operation. 50% of income within the

Chuck Grassley

3:30:14 to 3:30:24( Edit History Discussion )

Chuck Grassley: last three years has to come from farming income, and 80% of the assets in a -- in an estate have to be related to farming operations. so i happy to -- probably chapter 12 ended up, quite frankly, being

Chuck Grassley

3:30:24 to 3:30:43( Edit History Discussion )

Chuck Grassley: more narrow than originally intended but i think it is working. finally, i want to go to cram-down that's allowed for boats because boats are like cars, their value diminish rather than increases,

Chuck Grassley

3:30:43 to 3:30:54( Edit History Discussion )

Chuck Grassley: which is very different than real estate, where values are expected to rise over the long term.| proepbtsz of -- proponents argue that only a very limited number of loans will qualify for cram-down in

Chuck Grassley

3:30:54 to 3:31:09( Edit History Discussion )

Chuck Grassley: bankruptcy. while the amendment does attempt to limit the scope of the legislation from how it was originally drafted when senator durbin introduced it, and that is probably soon after he had talked

Chuck Grassley

3:31:09 to 3:31:23( Edit History Discussion )

Chuck Grassley: about it several months ago, his bankruptcy proposal as a stand-alone bill, the reality is that the language still is extremely broad. cram-down and other loan modifications are available for many loans,

Chuck Grassley

3:31:23 to 3:31:33( Edit History Discussion )

Chuck Grassley: both nontraditional and subprime as defined by senator durbin's amendment, made before the amendment's effective date. that's of course, a lot of loans. and since there's no sunset date in the

Chuck Grassley

3:31:33 to 3:31:44( Edit History Discussion )

Chuck Grassley: amendment, borrowers could file for bankruptcy and still get this cram-down relief years from now. mr. durbin: would the senator yield for a question? mr. grassley:as yes. mr. durbin: i'd like to ask

Chuck Grassley

3:31:44 to 3:32:00( Edit History Discussion )

Chuck Grassley: the senator if he's aware of the fact that this only applies to mortgages, subprime mortgages on a primary residence that have been entered into as of the date of the enactment of legislation, not

Richard Durbin

3:32:00 to 3:32:16( Edit History Discussion )

Richard Durbin: to any future mortgages of any type? mr. grassley: so then you're saying my statement was wrong? mr. durbin: i'm saying that your statement s hould be modified. mr. grassley: i'm looking at my staff

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