Grassley Statement on Housing Legislation

Senator Chuck Grassley of Iowa issued the comment below about his vote today against the H.R. 3221, the Housing legislation.  In June, Senator Grassley hosted a mortgage assistance event in Iowa to bring lenders and consumers together.  Senator Grassley is Ranking Member of the Committee on Finance, which is responsible for tax legislation.

 

“The problem with this massive bill is that it could do more harm than good.  It started out to help Americans who are losing their homes, but it ended up giving banks a $4 billion incentive to foreclose rather than work something out with homeowners who are in trouble due to downturn in the housing market.  The bill’s bailout of Fannie Mae and Freddie Mac doesn’t even begin to reform the excesses and the conflicts of interest that contributed substantially to the problems the mortgage giants face today.  And, more broadly, the bailout fosters moral hazard by diminishing any incentive for the housing sector to act more responsibly in the future.  Even the tax package, which I was involved with during Senate consideration of the measure, has been discredited by changes made by the House of Representatives that unraveled bipartisan tax reforms and did things like give favor to tenants who are artists or literary figures over low-income families.  I voted to proceed to this legislation because I very much wanted Congress to address the important housing issues facing the country today, but this bill has fallen prey to the special interests on Wall Street and K Street at an unjustifiable expense to taxpayers and homeowners on Main Street.”