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Senate Proceeding on Apr 3rd, 2008 :: 7:26:28 to 7:42:49
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Dianne Feinstein

7:26:28 to 7:26:41( Edit History Discussion )

Dianne Feinstein: they're coming, now would be a good time. i believe senator martinez and i are up after a republican for an amendment. so i'm prepared to proceed. mrs. feinstein: madam president? the presiding officer:

Dianne Feinstein

7:26:28 to 7:42:49( Edit History Discussion )
Speech By: Dianne Feinstein

Dianne Feinstein

7:26:41 to 7:26:59( Edit History Discussion )

Dianne Feinstein: the senator from california. mrs. feinstein: although i spoke about this amendment this morning, i'd like to speak about it again. this amendment is called, "the safe mortgage licensing act," licensing

Dianne Feinstein

7:26:59 to 7:27:19( Edit History Discussion )

Dianne Feinstein: being the dispositive word. i'm very proud to work with this with senator martinez of florida. he is on his way and he will be making a statement following mine. this amendment a is cosponsored by senators

Dianne Feinstein

7:27:19 to 7:27:35( Edit History Discussion )

Dianne Feinstein: boxer, obama, dole, durbin, salazar s, and a clinton. one of the things, madam president, thadat i didn't realize is how big scams are a part of the subprime market. i remember picking up a united

Dianne Feinstein

7:27:35 to 7:27:50( Edit History Discussion )

Dianne Feinstein: states u.s. today newspaper in january and the headline reading reading, "housing scams rising f.b.i. says, 2007 convictions more than double." bland as we began to look at this, we found there

Dianne Feinstein

7:27:50 to 7:28:00( Edit History Discussion )

Dianne Feinstein: was a very real problem.ob and the problem is that there is but a thin patchwork of state regulations. they vary. some don't have any. some areso pretty good, some resident so goodment so we put

Dianne Feinstein

7:28:00 to 7:28:18( Edit History Discussion )

Dianne Feinstein: put -- some are pretty good, some are not so good. so we put togethe wr this bill, senator martinez and i, and i'm very pro ud to say that it is supported by the national association of mortgage brokers,

Dianne Feinstein

7:28:18 to 7:28:34( Edit History Discussion )

Dianne Feinstein: by the conference of bank supervisorssu, by the mayor of los angeles, and byy the national association of realtors. and i'd like to read if i might the realtors' letter because i think it's i mportant

Dianne Feinstein

7:28:34 to 7:28:49( Edit History Discussion )

Dianne Feinstein: to the t discussion. "on behalf of over 1.3 million members ofhe national association of realtors, i want to share our views on the safe mortgage licensing act offered o by senators feinstein

Dianne Feinstein

7:28:49 to 7:29:05( Edit History Discussion )

Dianne Feinstein: and martinez. we believe this amendment will il go far towards preventing another subprime market failure that would further erode confidence in the nation's housing finance system. while responsible subpresime

Dianne Feinstein

7:29:05 to 7:29:20( Edit History Discussion )

Dianne Feinstein: lenders have played an important role in helping millions of consumers achieve homeownership, abusive subprime lending has occurred much too often. as a result, roughly 2.2 million american households

Dianne Feinstein

7:29:20 to 7:29:36( Edit History Discussion )

Dianne Feinstein: have beenee projected to lose their homes, and as much as $164 billion due to subprimee mortgage foreclosures. many of the provisions of the p amendment are consistent with the national association

Dianne Feinstein

7:29:36 to 7:29:50( Edit History Discussion )

Dianne Feinstein: of realsters -- realtors responsible lending principles. we believe our principles provide an a appropriate base for ledges that would helpt eliminate irresponsible practices.~ such a making loans without

Dianne Feinstein

7:29:50 to 7:30:05( Edit History Discussion )

Dianne Feinstein: sufficient regard to the borrowers' ability to repay the loan and avoid foreclosure. the national a ssociation of realtors supports responsible lending, mortgage servicing and appraisal practices.

Dianne Feinstein

7:30:05 to 7:30:30( Edit History Discussion )

Dianne Feinstein: we support this amendment that will help close the door on abusive lending practices. i would like to l say on behalf of the consponsors ofrs this amendment and myself, thank you to the national association

Dianne Feinstein

7:30:30 to 7:30:51( Edit History Discussion )

Dianne Feinstein: of realtors. we are very grateful foror the support. the fact is, mortgage fraud complaints have jumped more than 700% over the last five years, from 5,623 in 2002 to 46,717 last year. and mortgage

Dianne Feinstein

7:30:51 to 7:31:06( Edit History Discussion )

Dianne Feinstein: fraud complaints in my state -- california; senator boxer's state and my state -- have increased 400% over the last five yearsea from 1,043 in 2002 to 4,060 last year. all you have to doav is take a

Dianne Feinstein

7:31:06 to 7:31:20( Edit History Discussion )

Dianne Feinstein: look at the jump in these complaints and a jump in convictions to know that there are scams going on and that we need to stop them. the best way to stop them is to license these brokers and lenders

Dianne Feinstein

7:31:20 to 7:31:45( Edit History Discussion )

Dianne Feinstein: soer thatt you prevent the 25-year-old scamam artists -- and i don't pul l this out of the air; this is a fact -- who can come in, get on a telephone and tell lenders or tell an individual what they

Dianne Feinstein

7:31:45 to 7:31:59( Edit History Discussion )

Dianne Feinstein: w can do to refinance their house and do itt all in a bogus manner. we have ten states that are motor-fraud hot mortgage-fraud hot spots in the united states: florida, california, new york, utah, georgia,

Dianne Feinstein

7:31:59 to 7:32:12( Edit History Discussion )

Dianne Feinstein: indiana, ohio and michigan -- these arehe mortgage-fraud hot spots because of the number ofr complaints and convictions of mortgage fraud coming from these states. so the time has comeas to do something

Dianne Feinstein

7:32:12 to 7:32:28( Edit History Discussion )

Dianne Feinstein: about it. now, there are some people in this body that say "don't pass this bill today; put it in regular order, let it, go to the committee." you let it go to the committee and it will be another

Dianne Feinstein

7:32:28 to 7:32:45( Edit History Discussion )

Dianne Feinstein: year before this bill is before us and i will bet any amount of money the mortgage frauds will continue. the only -- because all the conditions are ripe a for it. the only way to handle it is to

Dianne Feinstein

7:32:45 to 7:33:00( Edit History Discussion )

Dianne Feinstein: pass this bill which sets into motion some minimum m national standards and allows the state to carry out these minimum standards and add to it anything the state might want. and, as i say, the 1.3 million

Dianne Feinstein

7:33:00 to 7:33:19( Edit History Discussion )

Dianne Feinstein: member national associationio of realtors is in support of this amendment. and the group that regulates them is in support of the amendment, as well. today, subprime mortgages are 30% of all the

Dianne Feinstein

7:33:19 to 7:33:32( Edit History Discussion )

Dianne Feinstein: mortgages in the largest state in the union -- 30% of every mortgage is subprime in california. and this is a community, because they're maining working class, not -- mainly working class, not necessarily

Dianne Feinstein

7:33:32 to 7:33:46( Edit History Discussion )

Dianne Feinstein: college graduates, that they're eager pawns for bad actors in the mortgage ande lending business. now, having said that, not all brokers are badok actors. many of them are honorable h professionals. and

Dianne Feinstein

7:33:46 to 7:34:03( Edit History Discussion )

Dianne Feinstein: the fact of the matter is, this isth a profession. this is what you do as a mortgage broker, as a lender. you should have standards. you should have to pass a test. you should have to get aet license.

Dianne Feinstein

7:34:03 to 7:34:21( Edit History Discussion )

Dianne Feinstein: and you should have to renew that license periodically. how else can you be able to go out, get on a phone call, calll people and say, "look ilo can refinance your house at 4%," and you bring in

Dianne Feinstein

7:34:21 to 7:34:33( Edit History Discussion )

Dianne Feinstein: the eager homeowner h and then the reality is something veryth different. these bad actors must be stopped. and there's only one way to stop them. and that's that minimum federal standards, allow the states

Dianne Feinstein

7:34:33 to 7:34:47( Edit History Discussion )

Dianne Feinstein: -- in my state it would be the corporation department that would do this -- thahit sets up the licenses, that sets up the training, and individuals would go through the training, they would have their

Dianne Feinstein

7:34:47 to 7:35:01( Edit History Discussion )

Dianne Feinstein: background check, they would get a license, and the license wou lld go up for renewable anually. some object to it. my goodness, attorneys have to renew their licenses, why don't someone that

Dianne Feinstein

7:35:01 to 7:35:18( Edit History Discussion )

Dianne Feinstein: puts out mortgages which is very often o everything that an individual owns -- why isn't it important for them to have a license and have tha at licensens renewed? once again, i'd like it tell you about

Dianne Feinstein

7:35:18 to 7:35:39( Edit History Discussion )

Dianne Feinstein: this family, and i do so because i met them in los angeles last week. this is the simmons family. look at their house. it isn't a mansion. it's a one-story, well-kept stucco home with flowers

7:35:39 to 7:35:58( Edit History Discussion )

planted, bushes trimmed. the gentleman, mr. simmons, was an employee of northrup grumman for 20 years and his wife an employee as a food checker for 26 years. they have owned this home for 39 years. mr.

Dianne Feinstein

7:35:58 to 7:36:17( Edit History Discussion )

Dianne Feinstein: simmons has a stroke. they find they need cash. they receive a cold call phone call from somebody -- they wanted $500,000 to be able to get a loan, take this out and use it for medical expenses. and

Dianne Feinstein

7:36:17 to 7:36:39( Edit History Discussion )

Dianne Feinstein: they were offered a $629,000 loan with a $25,000 cash back, 4.5% interest and monthly payments of $2,000. now, they're not college graduates. these are working people who did everything they could

Dianne Feinstein

7:36:39 to 7:36:59( Edit History Discussion )

Dianne Feinstein: to buy a home, who is kept that home up for 39 years in good condition and who, today, are going to lose that home. and here's why. there was no cash back in what they were promised. the interest rate was

Dianne Feinstein

7:36:59 to 7:37:15( Edit History Discussion )

Dianne Feinstein: 11.2% on this loan. the monthly payments were not $2,000 as they were told, it was $5,300. weapon they when they had to make the first payment they called the broker and said you told us $2,000,

Dianne Feinstein

7:37:15 to 7:37:33( Edit History Discussion )

Dianne Feinstein: why is it $5,300 and he said it was only for four months to draw down the interest rate. they said, well, i guess we can do it for four months, it was for the length of the mortgage and the broker

Dianne Feinstein

7:37:33 to 7:37:50( Edit History Discussion )

Dianne Feinstein: walks off with a $20,000 fee. now, in my book, this is fraud. now, there are some say that, well, people get the papers, let them read through them. you've bought a home, mr. president. i've bought a

Dianne Feinstein

7:37:50 to 7:38:05( Edit History Discussion )

Dianne Feinstein: home. i didn't read all the fine print on all of the documents. i depend on the word of the broker. and i believe most people do that. now, i'm not a lawyer. i do have a college degree. what if

Dianne Feinstein

7:38:05 to 7:38:22( Edit History Discussion )

Dianne Feinstein: i only had a high school degree? or not even that, i work all my life, i don't understand the fine print, this is why you have professionals representing you, to tell you the truth. and there's a penalty,

Dianne Feinstein

7:38:22 to 7:38:44( Edit History Discussion )

Dianne Feinstein: there should be if they do not tell you the truth. buying a home should not be a scam. refinancing a home should not be a scam. so, we, then, went on the internet. let's see what companies advertising

Dianne Feinstein

7:38:44 to 7:39:01( Edit History Discussion )

Dianne Feinstein: to employ brokers say. and here's one of them, here is the source, we accessed it on february 27, for brokers: "no experience, education, or exam is necessary." no experienc education, or exam is necessary.

Dianne Feinstein

7:39:01 to 7:39:29( Edit History Discussion )

Dianne Feinstein: they go on to say to the company: "you can hire unlicensed sales agents to originate loans under your company license." i don't think they should be able to do that. because it is these people that

Dianne Feinstein

7:39:29 to 7:39:42( Edit History Discussion )

Dianne Feinstein: pick up the phone and call the homeowner and offer that second mortgage. and particularly in the subprime marketplace where many people have very little if any downpayment, this presents enormous difficulties.

Dianne Feinstein

7:39:42 to 7:39:58( Edit History Discussion )

Dianne Feinstein: consequently, we've got a real problem. i hope this amendment passes today. there's nothing in the amendment -- some people, perhaps, don't likee this or that; it can be worked out in conference --

Dianne Feinstein

7:39:58 to 7:40:15( Edit History Discussion )

Dianne Feinstein: but when we're passing this bill, not to pass t something that says once and for all the federal government having to set in -- step in, set minimum standards, s you,, the states, set up your law,

Dianne Feinstein

7:40:15 to 7:40:29( Edit History Discussion )

Dianne Feinstein: set up p your licensing requirements, thess,e are the minimum standards. and you can add to them and see a that these people, mortgage brokers and lenders, are licensed. the legislation also creates a database

Dianne Feinstein

7:40:29 to 7:40:42( Edit History Discussion )

Dianne Feinstein: so that i, joe doe, about do buy a house, can go g into my computer if i have one and see thatha my forth broker is licensed -- that myns mortgage tg broker is licenses, know that he has been to school,

Dianne Feinstein

7:40:42 to 7:41:02( Edit History Discussion )

Dianne Feinstein: know he has been informed of ethics, know that he doesn't havee a felony background. right now you can have a felony background, and you can knoouw that his license is renewed anually so that he

Dianne Feinstein

7:41:02 to 7:41:18( Edit History Discussion )

Dianne Feinstein: ise kept up-to-date on ethics and best practices. this industry, becauseeal estate controls such a large l proportion of most people's wealth -- their home; their home is their rock; everything flows

Dianne Feinstein

7:41:18 to 7:41:38( Edit History Discussion )

Dianne Feinstein: from that homeownership -- and for most p eople buying home is truly the american dream. owning, having that equity, building that equity over thehe years, being able to finance the retireme nt from equity

Dianne Feinstein

7:41:38 to 7:41:57( Edit History Discussion )

Dianne Feinstein: in a home when they choose to sell it is really such a big, big deal. and to have bad actors flimflam artists going around, a sucking in people really makes me angry. so, i would hope that this body

Dianne Feinstein

7:41:57 to 7:42:14( Edit History Discussion )

Dianne Feinstein: on of into of -- this body on behalf of senator martinezna and i wouldnd pass this legislation today and i ask unanimous consent to add senator klobuchar as a cosponsor fiscal year i may, and i

Dianne Feinstein

7:42:14 to 7:42:24( Edit History Discussion )

Dianne Feinstein: ask unanimous consent to add to the record letters from the state board of supervisors, the national association of mortgage brokers, in support s this bill. i would like to yield the floor, if i might,

Dianne Feinstein

7:42:24 to 7:42:35( Edit History Discussion )

Dianne Feinstein: to my cosponsor, the distinguished senator from florida. the presiding officee r: without objection. the senator from florida. mr. martinez: thank you, mr. president. i thank the senator from california. what

Dianne Feinstein

7:42:35 to 7:42:49( Edit History Discussion )

Dianne Feinstein: a pleasure to work with you on this bill and this important piece of legislation. you have stated it so well. i want to, perhaps, go over a few items that i think ought to also be said. i know when

Mel Martinez

7:42:49 to 7:43:04( Edit History Discussion )

Mel Martinez: i first became secretary of housing and issue issue ban development i was shocked at the ever increasing and prominent role mortgage brokers pay in home purchasing process. when there is such a close

Mel Martinez

7:42:49 to 7:49:13( Edit History Discussion )
Speech By: Mel Martinez

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