THURSDAY, DECEMBER 6, 2007
Thank you, Secretary (Henry) Paulson. Good afternoon.
Today's announcement is of national and global import. It will surely counter the fear and anxiety that is corrosive and dangerous to the economy. This interest rate freeze will be well-received across the board, by lenders, investors, bankers, governments, and, especially, homeowners who stand at the brink of foreclosure.
And we must never forget that these homeowners have invested themselves and their money in their homes. These are people who are worried - very worried -- about their homes and their families. They want real solutions. They want to know that we are thinking of them ... that we care ... that we are doing something. Homeownership is part of the American Dream. It is a place we can call our own...our stake in the community...our investment in our future...our individual source of equity and personal wealth. These are no small matters but the essential elements of freedom and choice, now and in our retirement years.
And these homes are where our families live and grow together and grow up, where our children spend their formative years, and where extended families gather in the holiday season.
We cannot ignore Americans at risk. This December, we want to see the welcome mat out, not a foreclosure notice in the mailbox.
And as we move into midwinter, when the chill of the season often silences the hope in our hearts, these actions today will warm the hearts of Americans caught in the swirling subprime crisis.
I applaud the HOPE NOW alliance for stepping forward and taking action together, pro-actively contacting homeowners at risk of foreclosure, and working to find affordable solutions.
And already we see results: many homeowners have refinanced into new, affordable mortgages. Some people have been directed to new and better mortgages. Many homeowners at risk have been directed to HUD's Federal Housing Administration. Since early September we have received more than 118,000 refinancing applications, and already 35,000 homeowners have refinanced into an FHA-backed loan. We expect to do 50,000 refis by year's end with more to come next year. And, by freezing current interest rates for five years, the industry has again made a decisive, necessary action that will be good news for hundreds of thousands of American homeowners.
But there is more work to do - much more. Not everyone is out of danger. And we want to prevent another cycle like this in the future. That's why we have taken several decisive steps, such as pushing FHA to the limit of its statutory authority, expanding the scope of the governmental response with "FHASecure," and other actions. We have also attempted to work with Congress to pass FHA Modernization. This bill would increase access to home loans by lowering down payment requirements and allow FHA to insure bigger mortgages in high-cost states. It would also expand FHA's authority to price the insurance fairly, with risk-based premiums.
This bill could allow the FHA to help more than 250,000 families by the end of 2008 - including many with low incomes, less-than-perfect credit records, or little savings.
All of these changes are critically important to effort to help subprime borrowers refinance into safe and affordable home loans. The House has twice passed a version of the President's proposal. We are still waiting for the Senate to act. We've done our part. It is time for Congress to act...we need this bill now...as do hundreds of thousands of Americans...right now!
In combination with our administrative actions at FHA, and passage of this bill, we could help as many as 800,000 people in Fiscal Year 2008.
This is in addition to those helped by the HOPE NOW efforts.
So, today's good news is another step in the right direction, right for the economy and right for Americans at risk of losing their homes.