Says Democratic Proposal Would Lead to Higher Monthly Mortgage Payments for American Families

WASHINGTON – March 31st, 2008 – Senator Lamar Alexander (R-Tenn.), chairman of the Senate Republican Conference, today released the following statement urging the Senate Democratic leadership to support legislation that helps struggling homeowners without leading to higher monthly mortgage payments for millions of American families:

“Republicans have offered good proposals to stabilize the housing market and help struggling homeowners, proposals that should have bipartisan support. It’s time to bring these responsible proposals to the Senate floor, debate them, and vote. The Democratic majority continues to demand passage of legislation that would ultimately undermine property values. Their legislation raises the risk involved in mortgage lending and would lead to higher interest rates and higher monthly mortgage payments for American families, turning a homeowner’s mortgage into a junk bond. Congress should be wary of proposals like this that, however well-intentioned, have damaging consequences for millions of homeowners.”

Alexander has joined Senator Kit Bond (R-Mo.) to introduce the Security Against Foreclosures and Education (SAFE) Act, which seeks to boost the nation’s confidence in the housing market by providing:

– $10 billion in bond authority to refinance distressed subprime mortgages
– $15,000 tax credit (spread over three years) for the purchase of a home in or near foreclosure
– Expedited delivery of $180 million in loan counseling funds to help families avoid foreclosure (included in the omnibus appropriations bill that became law in December)
– An update of outdated Truth In Lending requirements, which do not currently cover newer adjustable rate mortgages, so consumers will better understand the loans they are considering
– Extension of foreclosure protection for veterans from 90 days to six months
– Federal Housing Administration (FHA) reforms that would make purchasing a home more affordable for many Americans by increasing the loan amounts that the FHA can insure and reducing the minimum down payment from 3 percent to 1.5 percent

Alexander has also cosponsored legislation with Senator Johnny Isakson (R-Ga.) to provide a $15,000 tax credit over three years to anyone purchasing a newly constructed home, a foreclosed home, or a home where foreclosure is pending. Alexander opposes Democratic efforts to revive legislation – rejected by the Senate in February – that includes a proposal sponsored by Majority Whip Richard Durbin (D-Ill.) that would lead to higher interest rates for those seeking new mortgages by allowing bankruptcy judges to rewrite mortgage terms for a borrower’s primary residence.