Video archive of the US Congress

Senate Proceeding 05-11-10 on May 11th, 2010 :: 3:08:25 to 3:11:29
Total video length: 4 hours 45 minutes Stream Tools: Stream Overview | Edit Time

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Johnny Isakson

3:08:17 to 3:08:38( Edit History Discussion )

Johnny Isakson: from tennessee, who has worked tirelessly for months on this legislation, but in particular, he has worked tirelessly on this particular amendment. and i want to rise and try to make my point as strongly as i can. this body, i know, always wants to do the right thing. we want to address the concerns that made the market collapse

Johnny Isakson

3:08:25 to 3:11:29( Edit History Discussion )
Speech By: Johnny Isakson

Johnny Isakson

3:08:39 to 3:09:00( Edit History Discussion )

Johnny Isakson: two years ago or begin to collapse two years ago. we want to restore confidence in real estate we want to bring back the vibrant housing industry. wet don't want to reincar nate -- we don't wajts to reincar nate subprime loans. we ought to do one simple thing today. we ought to learn from history. i want to give everybody a small history lesson.

Johnny Isakson

3:09:01 to 3:09:21( Edit History Discussion )

Johnny Isakson: the underlying bill answers the question of better underwriting by putting risk retention as a requirement on a newly originated mortgage. risk retention of 5%. mr. president, the tier-one minimum capital requirement after nationally chartered bank is 8%. you going to tell me the banks of america are gng to reserve another 5% against the mortgages

Johnny Isakson

3:09:22 to 3:09:44( Edit History Discussion )

Johnny Isakson: they originate? no, they're just not going to originate mortgages whatsoever. secondly, risk retention is no insurance for a better mortgage being -- having been made. the fact of the matter is, in the late-1980's, the americans savings and loan industry, which was chartered for the purpose of financing american homes, they went under and they had 100%

Johnny Isakson

3:09:45 to 3:10:05( Edit History Discussion )

Johnny Isakson: risk retention. what causes bad lending is bad underwriting. risk retention has nothing to do with it, if you have bad underwriting or, as we had in the underwriting at all. so, first of all, senator corker's amendment is an outstanding amendment that strikes at the heart of the

Johnny Isakson

3:10:06 to 3:10:26( Edit History Discussion )

Johnny Isakson: problem that got us here. while at the same time affording the opportunity for the american finance industry to bring back competitive mortgage lending. if it's not f.h.a. and it's not v.a. and it's not or freddie mac loan right now, you aren't getting one. there's no standard. this brings us back to a

Johnny Isakson

3:10:27 to 3:10:47( Edit History Discussion )

Johnny Isakson: standard of underwriting that's right. it recognizes tha if somebody has a job, the ability to pay, reasonable credit, and has some skin in the game, that they'll pay that loan back. you know, hisrically, mr. president, the default rate on the mortgage industry in the united states of america outside the last three years was around 1.2% to 4%.

Johnny Isakson

3:10:48 to 3:11:08( Edit History Discussion )

Johnny Isakson: -- 1.2% to 1.4%. very little, probably the highest -- best risk investment that an investor could make. when the underwriting failed, we got into the exotic instruments, when congress told fannie and freddie to make affordable loans and they ended up buying subprime loans, the genie got out of the bottle and everybody failed.

Johnny Isakson

3:11:09 to 3:11:30( Edit History Discussion )

Johnny Isakson: i want to say to the body, if we let this bill pass with risk retention in it, thinking we've done something, the only thing we will have accomplished is a total absence of mortgage money for the american home buyer and the american real estate industry. and that's a sad misstaifnlgt you know, facts are stubborn things. if a guy has a job, good credit, and puts a downpairntle he'll repay his loan.

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