[Congressional Record (Bound Edition), Volume 154 (2008), Part 4] [Senate] [Pages 4584-4585] [From the U.S. Government Publishing Office, www.gpo.gov]HOUSING CRISIS Mr. SPECTER. We are scheduled to have a vote at 2:15 this afternoon on a motion to invoke cloture on the motion to proceed to legislation that has been filed at the desk by the majority leader. This legislation contains a number of proposals, the most important of which is under consideration by the Judiciary Committee at the present time. I have filed alternative legislation, captioned S. 2133, which offered relief to homeowners who have so-called variable rate mortgages and who are facing bankruptcy. Home buyers who have variable rate mortgages are sometimes surprised to find their payments, after a period of time, jump from-- illustratively--$1,200 a month to $1,900 a month, an enormous change that they had not expected because they have a variable rate mortgage. I believe that in these situations, there is a good basis to give bankruptcy courts authority to inquire into the circumstances of such mortgages and to roll back or reduce the interest rates. The rate of foreclosure for these types of mortgages has more than doubled in the past year while foreclosure among homeowners with fixed-rate mortgages has increased only modestly. Frequently, the person taking out a mortgage doesn't understand there is a risk that there will be a large increase in the interest rates on variable rate mortgages. Sometimes there is deception on the part of the lender or mortgage broker. Sometimes it may even constitute fraud. I believe the best policy would be to allow the bankruptcy courts to consider these matters on an individual basis. The lender is still going to receive, ultimately, the full amount of the principle but not with interest rates that put the home buyer in a precarious position, or even foreclosure. Senator Durbin has introduced legislation captioned S. 2136 that goes much further by authorizing the bankruptcy court to reduce the principal amount of the mortgage. I am opposed to that approach because it will increase the risk associated with mortgage lending and discourage lenders from providing capital for home mortgages. The Bankruptcy Code currently does not allow for the modification of mortgages because Congress did not want to discourage lenders from giving mortgages to future homebuyers. There is an excellent statement by Justice Stevens in Nobelman v. American Savings Bank in which he gives that precise reason for the provision barring modification of mortgages. Congress must be cautious about making changes to the Bankruptcy Code that will leave consumers worse off in the long run. I believe Senator Durbin's proposal would have that effect. I believe we ought to be acting on the issues confronting us on housing, but I am concerned that given the current state of affairs, the procedures to be followed will preclude amendments, such as my interest in offering an amendment with the substance of my bill, S. 2133. The better practice would be to work through the Judiciary Committee, which is now considering the Durbin legislation, with my legislation offered in Committee as a second-degree amendment. We are scheduled to have a markup on that on Thursday. Regular order would suggest that is a better practice to have it come out of the Committee, where we are in the process of having a markup. We will later have a committee report, and it would be much more conducive to appropriate deliberation than having a measure filed under Rule XIV, where it is lodged at the desk, where there has [[Page 4585]] not been analysis and a markup, and there has not been a committee report. If it is possible to offer amendments, I would consider supporting the cloture motion. However, if the majority leader is going to fill the tree and not allow amendments, then I am opposed to that procedure and would oppose cloture. The practice of so-called filling the tree is highly undesirable. The essence of Senate procedures is to allow Senators to offer amendments. In February of last year, more than a year ago, I introduced a resolution, S. Res. 83, to change the standing rules so the same person could not offer both a first-degree and a second-degree amendment. This change of the rules would preclude the majority leader, who has priority of recognition, from so-called filling the tree to prevent anyone else from offering amendments. The Rules Committee has not acted on that resolution, but I think that is an important piece of business, that our rules ought to be changed so the majority leader could not be in a position to fill the tree and preclude other Senators from offering amendments. I am open as to what is going to happen on the cloture vote this afternoon. But certainly, if there is not an opportunity for me to offer my amendment or for others on this side of the aisle to offer amendments, I will oppose it. I believe I have some time left on my order. How much time do I have remaining? I have been asked to yield some time to my distinguished colleague from Utah. I believe this is Republican time at the moment. Parliamentary inquiry: Are we still on Republican time? The PRESIDING OFFICER. The time is evenly divided until 12:30, a little less than 23 minutes. Mr. SPECTER. I don't wish to step in front of the distinguished Senator from Colorado, his having waited on the Senate floor. But at any rate, I will not utilize the last 5 minutes of my time so it will be available to the Senator from Utah, either now or after the Senator from Colorado finishes his time because he has been waiting. The PRESIDING OFFICER. The Senator from Utah. Mr. HATCH. I ask unanimous consent that I follow the distinguished Senator from Colorado. The PRESIDING OFFICER. Without objection, it is so ordered. The Senator from Colorado. ____________________