[House Hearing, 111 Congress]
[From the U.S. Government Printing Office]




                               before the


                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES


                             FIRST SESSION


                            NOVEMBER 2, 2009


                           Serial No. 111-156


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                   EDOLPHUS TOWNS, New York, Chairman
PAUL E. KANJORSKI, Pennsylvania      DARRELL E. ISSA, California
CAROLYN B. MALONEY, New York         DAN BURTON, Indiana
ELIJAH E. CUMMINGS, Maryland         JOHN L. MICA, Florida
DENNIS J. KUCINICH, Ohio             MARK E. SOUDER, Indiana
JOHN F. TIERNEY, Massachusetts       JOHN J. DUNCAN, Jr., Tennessee
WM. LACY CLAY, Missouri              MICHAEL R. TURNER, Ohio
DIANE E. WATSON, California          LYNN A. WESTMORELAND, Georgia
STEPHEN F. LYNCH, Massachusetts      PATRICK T. McHENRY, North Carolina
JIM COOPER, Tennessee                BRIAN P. BILBRAY, California
GERALD E. CONNOLLY, Virginia         JIM JORDAN, Ohio
MIKE QUIGLEY, Illinois               JEFF FLAKE, Arizona
MARCY KAPTUR, Ohio                   JEFF FORTENBERRY, Nebraska
    Columbia                         AARON SCHOCK, Illinois
DANNY K. DAVIS, Illinois             ANH ``JOSEPH'' CAO, Louisiana
PAUL W. HODES, New Hampshire
JUDY CHU, California

                      Ron Stroman, Staff Director
                Michael McCarthy, Deputy Staff Director
                      Carla Hultberg, Chief Clerk
                  Larry Brady, Minority Staff Director

                    Subcommittee on Domestic Policy

                   DENNIS J. KUCINICH, Ohio, Chairman
ELIJAH E. CUMMINGS, Maryland         JIM JORDAN, Ohio
JOHN F. TIERNEY, Massachusetts       MARK E. SOUDER, Indiana
DIANE E. WATSON, California          DAN BURTON, Indiana
JIM COOPER, Tennessee                MICHAEL R. TURNER, Ohio
PETER WELCH, Vermont                 AARON SCHOCK, Illinois
MARCY KAPTUR, California
                    Jaron R. Bourke, Staff Director

                            C O N T E N T S

Hearing held on November 2, 2009.................................     1
Statement of:
    Fort, Hon. Vincent, a Senator in Congress from the State of 
      Georgia; Andrew Young, chairman, Goodworks International, 
      LLC; Burt Manning, chief assessor, Fulton County Board of 
      Tax Assessors; Brent Brewer, 30310 Mortgage Fraud Task 
      Force; William J. Brennan, director, Atlanta Legal Aid 
      Society's Home Defense Project; Tia McCoy, homeownership 
      center manager, Resources for Residents and Communities; 
      Dan Immergluck, associate professor, City and Regional 
      Planning Program, Georgia Institute of Technology; and 
      Frank Alexander, professor of property, real estate sales 
      and finance, State and local government law and theology, 
      Federal housing policies and homelessness, Emory University 
      School of Law..............................................     6
        Alexander, Frank.........................................   103
        Brennan, William J.......................................    49
        Brewer, Brent............................................    44
        Fort, Hon. Vincent.......................................     6
        Immergluck, Dan..........................................    74
        Manning, Burt............................................    15
        McCoy, Tia...............................................    62
        Young, Andrew............................................    14
    Redmond, Saqirah, homeowner; Andrew Schneggenburger, 
      executive director, Atlanta Housing Association of 
      Neighborhood Based Developers; Joe Brannen, president and 
      CEO, Georgia Bankers Association; Jeff Betsill, president, 
      Jeff Betsill Homes, Inc.; Michael Rossetti, president, 
      Ravin Homes, Inc.; and Jon D. Greenlee, associate director, 
      Division of Banking Supervision and Regulation, Board of 
      Governors of the Federal Reserve...........................   120
        Betsill, Jeff............................................   144
        Brannen, Joe.............................................   133
        Greenlee, Jon D..........................................   156
        Redmond, Saqirah.........................................   120
        Rossetti, Michael........................................   151
        Schneggenburger, Andrew..................................   126
Letters, statements, etc., submitted for the record by:
    Alexander, Frank, professor of property, real estate sales 
      and finance, State and local government law and theology, 
      Federal housing policies and homelessness, Emory University 
      School of Law, prepared statement of.......................   105
    Betsill, Jeff, president, Jeff Betsill Homes, Inc., prepared 
      statement of...............................................   147
    Brannen, Joe, president and CEO, Georgia Bankers Association, 
      prepared statement of......................................   135
    Brennan, William J., director, Atlanta Legal Aid Society's 
      Home Defense Project, prepared statement of................    53
    Brewer, Brent, 30310 Mortgage Fraud Task Force, prepared 
      statement of...............................................    46
    Fort, Hon. Vincent, a Senator in Congress from the State of 
      Georgia, prepared statement of.............................     9
    Greenlee, Jon D., associate director, Division of Banking 
      Supervision and Regulation, Board of Governors of the 
      Federal Reserve, prepared statement of.....................   158
    Immergluck, Dan, associate professor, City and Regional 
      Planning Program, Georgia Institute of Technology, prepared 
      statement of...............................................    76
    Manning, Burt, chief assessor, Fulton County Board of Tax 
      Assessors, prepared statement of...........................    34
    McCoy, Tia, homeownership center manager, Resources for 
      Residents and Communities, prepared statement of...........    65
    Redmond, Saqirah, homeowner, prepared statement of...........   123
    Rossetti, Michael, president, Ravin Homes, Inc., prepared 
      statement of...............................................   153
    Schneggenburger, Andrew, executive director, Atlanta Housing 
      Association of Neighborhood Based Developers, prepared 
      statement of...............................................   128
    Young, Andrew, chairman, Goodworks International, LLC, report 
      by the Carl Vinson Institute...............................    17



                        MONDAY, NOVEMBER 2, 2009

                  House of Representatives,
                   Subcommittee on Domestic Policy,
              Committee on Oversight and Government Reform,
                                                       Atlanta, GA.
    The subcommittee met, pursuant to notice, at 11:40 a.m., in 
the Committee Room 450, Georgia State Capitol, 206 Washington 
Street, S.W., Atlanta, GA, Hon. Dennis J. Kucinich (chairman of 
the subcommittee) presiding.
    Present: Representatives Kucinich, Westmoreland, and Scott.
    Staff present: Jaron R. Bourke, staff director; Yonatan 
Zamir, counsel; and Christopher Hixon, minority counsel.
    Mr. Kucinich. The Domestic Policy Subcommittee of the House 
Oversight and Government Reform Committee will now come to 
    Today's field hearing will examine the local 
characteristics of the ongoing residential and commercial real 
estate crisis.
    Without objection, the Chair and the ranking minority 
member will have 2 minutes to make opening statements, followed 
by opening statements not to exceed 2 minutes by any other 
Member who seeks recognition. And without objection, Members 
and witnesses may have 5 legislative days to submit a written 
statement or extraneous materials for the record.
    For the purposes of this subcommittee field hearing, Mr. 
Westmoreland of Georgia is deemed to be a member of the 
subcommittee and after I make my opening statement, I will 
yield to him as well as Mr. Scott, who has asked to participate 
and is deemed to be a member of the subcommittee for the 
purpose of this hearing.
    I want to thank all those in the audience who are here for 
this hearing and to extend my thanks to Georgia State Senator 
Vincent Fort. Senator Fort, welcome. Senator Fort graciously 
assisted my staff in obtaining this location here at the 
Georgia State Capitol Building for our hearing today. I 
appreciate it very much, Senator.
    I would also like to welcome my friend, Mr. Westmoreland, 
Congressman Westmoreland and Congressman Scott. Congressman 
Westmoreland, of course, is on the Government Reform Committee, 
on the full committee, and it was a conversation that he and I 
had that led to this subcommittee meeting. And giving it full 
support is Congressman Scott, who is a member of the Financial 
Services Committee, and because of his work on Financial 
Services, we were able to have a meeting of the minds about the 
importance of this hearing today, and we appreciate his 
presence as well.
    When Congressman Westmoreland approached me, he 
specifically talked about his concern about the impact of the 
real estate financial crisis on America, and in particular on 
Georgia, a concern that I know Mr. Scott shares.
    As the financial crisis unfolded over the past 2 years, 
there are few places in the United States that have not felt 
its effects, whether in the form of rampant home foreclosures, 
shuttering of businesses, vacant and abandoned homes, empty 
commercial buildings and displaced communities of people. The 
far-reaching turmoil caused by the collapse of the market has 
changed many communities indelibly and some may never fully 
    Here in Atlanta, residents experienced a spectacular rise 
in home values and have watched them fall nearly as 
dramatically. This phenomenon has occurred in many cities and 
towns across the country, but as we will hear today, in some 
neighborhoods in Atlanta, home prices rose even higher and even 
faster than in cities like Phoenix or Las Vegas. Nationally, 
the foreclosure rate is four times the historical average and 
experts predict that 10 to 12 million foreclosures will have 
occurred before this crisis subsides.
    Joblessness nationwide is at a 25-year high. In the Atlanta 
metropolitan area with a population of over five million 
people, the unemployment rate is at 10\1/2\ percent and 1 in 85 
homes are currently in foreclosure. On the commercial side, in 
2009 along, there have been 20 bank failures in the State of 
Georgia. This out of a total of 101 banks that have failed 
nationwide so far this year.
    The severity of the plunge in residential real estate 
values and the resulting catastrophic impact it has had on 
residential communities in Atlanta is being matched in some 
cases by the effects of the commercial real estate collapse 
that is occurring.
    The subcommittee has come to Atlanta today to hear how this 
has happened in a great city known as the unofficial capital of 
the South, and to bear witness to the effects on people and 
    As we will hear today, it was more than just rampant 
speculation, lax underwriting requirements and weakened anti-
predatory lending laws that led to Atlanta's communities being 
ravaged by this crisis. Because of an unchecked bubble in 
housing and land prices, residents in very modest, low-income 
neighborhoods in Atlanta became house rich while being cash 
poor. Ruthless and largely unregulated predatory lenders saw 
quick profit in those very neighborhoods, without a shred of 
concern for the inevitable consequences when the bubble 
predictably burst. Tomorrow, on the courthouse steps just a few 
minutes walk from this building, there are over 9,500 
foreclosures scheduled for the 13-county Atlanta metropolitan 
    Today, we will hear from witnesses who will tell us how 
they dealt with the crisis, how it has impacted their 
communities. Congress enacted a program earlier this year to 
try to stem the tide of residential foreclosures and we will 
hear some specifics about how and whether it is working. We 
will also hear from members of Atlanta's developer community 
who are struggling to run their small businesses when they can 
no longer access the capital they need. The administration has 
tried to address this ongoing problem with specific programs 
designed to promote small business lending. We will hear from a 
banking regulator who will provide insight into the guidelines 
used by regulators to promote the availability of small 
business and other commercial capital.
    Thank you very much. At this time, I recognize Congressman 
Westmoreland. Again, I want to thank you for the role that you 
played in bringing this to light.
    I am learning this mic system here, so let us see. OK, I 
think you are all set.
    Mr. Westmoreland. Thank you, Mr. Chairman. I want to thank 
you for listening to me over the past months to try to get you 
to come down here, because this is very important to our State. 
So I want to thank you for agreeing to hold this important 
hearing. You and your staff have been great to work with and I 
appreciate that. I would also like to thank my other colleague 
from Georgia, David, for being here also.
    As a nation, we are currently working our way out of a 
devastating economic downturn. The collapse of the financial 
markets sent shock waves throughout our country, bringing every 
sector of our economy to its knees. This tragedy has destroyed 
wealth at an unprecedented rate, placing too many Americans 
into situations that they could never imagine. Nowhere else is 
this better understood than here in my State of Georgia.
    At one time, Georgia was known as the home of Coca-Cola and 
peanuts. Today, it is known for foreclosures and failing 
businesses. My home State has the unfortunate distinction of 
having more bank failures--26--than any other State in the 
country. With over a quarter of all bank failures nationwide, 
Georgians have experienced more than their fair share of 
    By now we all know how we got here--rapid expansion in the 
banking industry mixed with cheap credit and the general lack 
of personal responsibility led to Georgia seeing over 100 new 
banks open their doors since the year 2000. During this time, 
only California and Florida surpassed Georgia in the opening of 
new banks. As the market crashed, many people began to question 
why the State was in need of so many banks. Was it a risk to 
the health of the overall financial system for there to be such 
a concentration of lending institutions in the area? We believe 
here in Georgia that a community bank makes the best bank.
    In the past year, I have spoken with homeowners, car 
dealers, construction companies and many others. They explain 
that banks are being put in a position where they are unable to 
rationally evaluate their real estate loans. Banks are being 
forced by over-zealous regulators to dramatically reduce their 
real estate exposure. This all too often ends in banks 
foreclosing on properties and selling them for pennies on the 
dollar while that hurts all the other values in the 
neighborhood. While this may reduce the lending institution's 
real estate portfolio, it does nothing to help our current 
crisis. In fact, it makes the situation unnecessarily worse by 
creating free-falling property values at a time when families 
are in desperate need of financial stability.
    As a former home builder, I realize the tremendous negative 
impact that home foreclosures could have on a community. 
Decreased property values translate into a loss of tax revenues 
for communities. Managing the foreclosures also increases a 
municipality's costs. Numerous foreclosures in a particular 
community seriously undermine its stability and economic 
potential. The downward spiral of home prices for homeowners as 
well as revenue for lenders and local governments demonstrates 
the far-reaching impact of home foreclosures. Finding a 
solution to this widespread problem will help banks, homeowners 
and communities across the Nation emerge successfully from the 
current economic crisis.
    Mr. Chairman, if our nation is going to have a strong 
financial future, we must learn from the mistakes of the past. 
It is my fear that we will soon be forced to test our new 
knowledge, because the threat of a collapse of the commercial 
real estate market looms over us all. That is why it is 
imperative that we find a solution to the residential market 
quickly. If we do not, it will almost be impossible to fight 
these two different fronts at one time.
    Again, Mr. Chairman, I thank you for holding this important 
hearing and I look forward to hearing from today's witnesses.
    Mr. Kucinich. I thank the gentleman.
    Now I want to recognize, for purpose of an opening 
statement, Congressman Scott, and thank him for his 
participation. Congressman Scott.
    Mr. Scott. Thank you very much. This is indeed an honor to 
be here with my two distinguished colleagues, Chairman Kucinich 
and Lynn Westmoreland, who do a tremendous job in Washington, 
DC. Thank you so much for coming and holding this hearing. It 
is very timely and very important.
    Atlanta, Georgia is the epicenter if our financial crisis, 
let us make no mistake about it. We are here hovering at an 
unemployment rate of 10\1/2\ percent, we have a foreclosure 
rate of 18 percent, we lead the Nation in bank closures with 30 
percent--nearly 30 percent of all the banks that have closed in 
this nation are here in Georgia. Now something is wrong about 
these numbers. And there is something that we are not doing 
that we need to do.
    I serve on the Financial Services Committee. I understood 
going in that we needed to put TARP together to help Wall 
Street. We heard their voices loud and clear because they 
needed to unfreeze the credit markets. But the voices we 
refused to hear when we were in this debate were those 
struggling homeowners whose homes were being foreclosed on, 
which was the source of the problem. And as many of you know 
who followed that, I held up, along with about 20 others and I 
think Westmoreland was a part of that as well, even moving 
ahead on TARP. And I said let us put maybe just 2 percent of 
this $700 billion, it would have been just $14 billion, into 
something where homeowners could come and get money so they 
could stay in their homes. And I advocated then what I think we 
may need to do, particularly here in Atlanta, and that is to 
put a moratorium--put a freeze on the home foreclosures. And 
put a freeze on the residential foreclosures----
    Mr. Scott [continuing]. Until we can get our hands around 
this problem. That is exactly what we need to do. So we are 
here to hear from the people who have to make this work--the 
bankers, the community activists, our political leaders, people 
who are grappling with this issue. Atlanta has made its name by 
being a city too busy to hate. Let us make our name now by 
being a city that is too busy to foreclose.
    Thank you very much.
    Mr. Kucinich. Thank you very much, Congressman Scott. There 
are no additional opening statements from Members. The 
committee will receive testimony from the witnesses who are 
before us today.
    It is going to be my pleasure to introduce the witnesses. I 
will introduce the witnesses and then we will begin the 
    The Honorable Vincent Fort has been representing the 39th 
District of Georgia, which is located in Fulton County, since 
1996. Mr. Fort is also a professor of history and political 
science, having taught at Morehouse College and Clark-Atlanta 
University. Welcome.
    The Honorable Andrew Young currently serves as chairman of 
GoodWorks International, LLC, an international consulting firm. 
Ambassador Young has previously served as mayor of Atlanta, 
Congressman from Atlanta's 5th District, and U.S. Ambassador to 
the United Nations. Thank you very much for being here, 
    Mr. Burt Manning is the chief appraiser for the Fulton 
County Board of Tax Assessors and was appointed to that 
position in July 2006. He oversees the preparation of the 
annual real and personal property tax digest published 
annually. Thank you, Mr. Manning, for being here.
    Mr. Brent Brewer is a homeowner from Atlanta's historic 
West End neighborhood, is an active member of the zip code 
30310 Mortgage Fraud Task Force since 2005. The mission of the 
task force is to raise public awareness of the proliferation of 
mortgage fraud and foreclosure in zip code 30310 neighborhoods. 
Thank you very being here.
    Mr. William J. Brennan. Mr. Brennan is the director of the 
Atlanta Legal Aid Society's Home Defense Project, which 
provides referrals and legal representation to homeowners who 
have been victimized by foreclosure ``assistance,'' home equity 
and home purchase scams. Mr. Brennan has received numerous 
awards for his work fighting predatory lending practices in 
Georgia, which he has been doing for over 40 years. Thank you 
for being here, sir.
    Ms. Tia McCoy, welcome, is the manager of the HomeOwnership 
Center of Resources for Residents and Communities, a non-profit 
HUD approved Neighbor Works America Community Development Corp. 
that provides housing development non-profit management and 
community building.
    Mr. Dan Immergluck, thank you for being here. Mr. 
Immergluck is associate professor of the City and Regional 
Planning Program at the Georgia Institute of Technology. He has 
published numerous scholarly works on the subject of real 
estate finance, community reinvestment, fair lending policy and 
demographics, among others. Thank you.
    Mr. Frank S. Alexander is a professor at Emory University 
School of Law and founding director for the Center for the 
Study of Law and Religion. He is also director of the Project 
on Affordable Housing and Community Development. His work 
focuses on affordable housing, urban redevelopment and State 
and local government law. I want to thank you for being here as 
well, Mr. Alexander.
    And again, appreciation to all of the witnesses. We are now 
at the point in the hearing where we swear in witnesses. Now it 
is the policy of the Committee on Oversight and Government 
Reform to swear in all witnesses before they testify and I 
would ask that you rise and raise your right hands.
    [Witnesses sworn.]
    Mr. Kucinich. Let the record reflect that each of the 
witnesses has answered in the affirmative. Thank you, you may 
be seated.
    I am asking that each of the witnesses now give a brief 
summary of your testimony and to keep this summary under 5 
minutes in duration. I want you to bear in mind that your 
complete written statement will be included in the record of 
the hearing and that we are going to go over your complete 
written statement as well as listen carefully to what you are 
saying now.
    So with that, the system here has a green light that you 
can begin on. You have 1 minute left when the light is red--oh, 
I have just been corrected. When the light is yellow, you have 
1 minute left. So just like everywhere else, do not go through 
a red light. [Laughter.]
    So Jaron is going to keep time and I trust that with your 
Harvard education, you will be able to do that. [Laughter.]
    OK, I am pleased to welcome the Honorable Mr. Fort, if you 
would begin with your testimony and then we are going to 
proceed to recognize each and every witness. And at the 
conclusion of that, we are going to have a period of 



    Mr. Fort. Thank you, Mr. Chair, for bringing the 
subcommittee to Atlanta. We appreciate you for that. It is good 
to see my good friend, David Scott from Atlanta, we appreciate 
you and everything you are doing.
    Mr. Chair, in my comments, I am going to focus on work that 
an ad hoc coalition has done over the last 6 months. That 
coalition is the Atlanta Fighting Foreclosure Coalition. It 
came together earlier this year as a result of a tidal wave of 
bank foreclosures occurring in Atlanta. At the same time, banks 
and other financial institutions that had in fact destroyed the 
economy and perpetrated predatory lending practices, received 
hundreds of millions of dollars of Federal bailout. The 
coalition, the Atlanta Fighting Foreclosure Coalition, is made 
up of almost 40 civil rights, State, labor and social justice 
    The coalition focused its activity on Wells Fargo/Wachovia. 
Wells Fargo/Wachovia received at least $25 billion in the 
bailout. Wells Fargo/Wachovia also had an especially pernicious 
history of predatory lending. And additionally, Wachovia was 
one of the companies most involved in weakening the Georgia 
Fair Lending Act in 2003. You will hear more about that from 
other witnesses, I am sure.
    The Money Store and Golden West are two institutions that 
Wells Fargo/Wachovia bought that were notorious predatory 
lenders. In addition, we learned that Wachovia was making 
predatory loans directly in their branches in African-American 
neighborhoods here in Atlanta. Wells Fargo/Wachovia is being 
sued in several cities and States, including Baltimore, 
Cleveland and Illinois. They are being charged with race-based 
lending practices.
    This spring, the coalition began a series of protests at 
various Wells Fargo/Wachovia locations. Richard Trumka, 
President of the AFL-CIO, came to Atlanta to show his support. 
Five members of the coalition, including myself, conducted 
civil disobedience at a Wells Fargo home finance office and 
were arrested.
    After that series of demonstrations, Wells Fargo/Wachovia 
put a moratorium in place on 1,400 October foreclosures. 
Unfortunately, they have refused to extend their moratorium for 
the next 6 months as demanded by the coalition. Also, it 
appears that the loan modification protocol that Wells Fargo/
Wachovia is using does not differ substantially from that which 
has failed in the industry over the last 2 years. The best 
research shows that loan modification using the Wells Fargo/
Wachovia criteria results in payments staying the same in 50 
percent of the cases and actually the payments going up in 25 
percent of the cases.
    The most important thing, in my estimation, that this 
committee can do is the following:
    One, work to create a best practices loan modification 
process which banks receiving TARP money would be required to 
follow. That best practices loan modification process should 
include at least these four things: 1. Decreasing the principal 
loan balance to make loans affordable. That is particularly 
important when home values are going down. We have, I believe 
the number is one out of every three loan mortgages in this 
country are upside down. The homeowner owes more on the loan 
than the house is worth, therefore, if you do not decrease the 
principal loan balance, you really are not helping the 
homeowner to the fullest extent. 2. Lower the interest rate to 
make loans affordable. 3. Convert adjustable rates to fixed 
rates and then finally, very important, because none of the 
loan modification protocols that have been put together in the 
last couple of years from Hope Now Alliance to Hope Now for 
Homeowners to the President's plan have included using reverse 
mortgages with short payoffs for senior citizens--absolutely 
critical when you have a senior in this situation where they 
are about to be foreclosed on, in an emergency, the use of good 
reverse mortgages. This is not a silver bullet, but it goes a 
long way toward helping seniors.
    The second thing that needs to be done is we need to pass a 
Federal law to stop predatory lending. I am very disappointed 
that has not progressed further over the last 3 years. The 
inclusion of assignee liabilities is essential in any such law.
    And then three, I would hope that Congress would call for a 
civil rights investigation on the discriminatory practices of 
the major banks and other banks--Wells Fargo/Wachovia, Bank of 
America and Citigroup.
    Finally, Mr. Chair, I would just say that I am skeptical 
about giving more banks more bailout money without commitment 
to stop their bad lending practices and speculation. One of the 
concerns that I had about during the time when the TARP 
legislation was being discussed is that there was not a 
commitment received from the banks to stop these bad lending 
practices. So they got a blank check and the lending practices, 
they have not modified or changed their lending practices and 
so I would be skeptical about giving more money to more banks 
when they do not make commitments to the homeowners we are all 
concerned about.
    Thank you, Mr. Chair.
    Mr. Kucinich. Thank you. I thank the gentleman.
    I just want to comment parenthetically, that is one of the 
reasons why some of us did vote against the bill.
    Mr. Fort. Yes, sir.
    Mr. Kucinich. The Chair recognizes the distinguished 
Ambassador, Ambassador Young.
    [The prepared statement of Hon. Vincent Fort follows:]

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                   STATEMENT OF ANDREW YOUNG

    Mr. Young. Mr. Chairman, I thank you for giving me this 
    I come here as a former member of the Banking Committee 
when I think this crime began. I was elected to Congress in 
1973 and we were on the end of really the most stable period of 
the global economy. From 1944 roughly to 1974, you had a global 
economy anchored to gold and doing very well for everybody, 
because we thought it through and organized it.
    In 1973, in the Banking Committee, we suddenly ended the 
gold standard, broke up the Breton-Woods Agreements and allowed 
the dollar to float. The thing about that was that nobody asked 
any questions. And I was the last member of the committee and 
always committed to ask dumb questions, and I said, ``If the 
dollar is not anchored by something, won't people play politics 
with the dollar?'' Arthur Burns took a puff on his pipe and 
said, ``Young man, you will soon learn the dollar doesn't need 
you to protect it.'' Well, that shut me up. [Laughter.]
    But it sparked my mind to figure out what was going on, 
because I thought the Congress had made a decision that they 
did not understand. Now normally, we would go back and revisit 
that. But Watergate broke a couple of weeks after that. Twenty-
five years later, Paul Volcker, who was there with Arthur Burns 
and George Shultz, wrote a book saying that he and Arthur Burns 
and George Shultz had not discussed this question before they 
came over to testify before the House Banking Committee. That 
they got word from the White House that they were to testify to 
this effect.
    Now that bothers me because nobody understood what was 
going on, not even the people who were testifying. And we never 
went back to look at it. Now I think the effects of that were 
that we shifted from an economics that had been thought through 
for years in the Second World War by John Maynard Keynes. We 
suddenly made a switch to the economics of Milton Friedman.
    Now I am not an economist, I am a preacher. But I went back 
and tried to figure this out and I cannot figure out why we 
were doing all of this. But that Friedman economics launched us 
into a period of systematic deregulation at a time when the 
economy was being increasingly globalized. The price of oil at 
that time was $3 a barrel. In 6 months, it was $30.00 a barrel, 
in 10 months, it was $50 a barrel. And we have been on an 
economic roller coaster ever since, that I think the Congress 
put us in.
    Now we then went through a period of change in the Congress 
when we repealed Regulation Q, which separated the savings and 
loans from the commercial banks. When savings and loans were 
handling housing, they knew the people they were lending to. 
When you broke that up, you suddenly had commercial banks 
putting together securitized mortgage packages that they did 
not know what they were doing. Not only did the savings and 
loans go under, but when the savings and loans went under, the 
Federal Deposit Insurance Corp. drew this line in the sand so 
that they had no flexibility in dealing with community banks.
    I am saying, Mr. Chairman, that the Congress helped get us 
into this situation. And I would hope that your committee on 
reform would take a good look at this all the way back from the 
beginning of this crime scene and help us solve some of these 
broader economic problems.
    In spite of all that you hear, Georgia is a very healthy 
economy. These banks are relating to small businesses and 
farmers; yes, they were extended by values, but many of them 
are not predatory lenders, many of them are community banks 
serving their communities very well. And our communities are 
thriving. Look at our airport, we have almost 3,000 flights a 
day coming in here. Atlanta has grown from about two million 
when I was mayor, in the metropolitan area; as of the other day 
we had 5,595,000 people coming in here. We will be six million 
people before long. So this is not a sick community.
    And given a little time and a little flexibility, I think a 
lot of the good people who are running our small banks would be 
able to work these problems out without handicap. If you close 
these banks because of an academic or theoretical reason, by 
and large, you are throwing the country in more debt and you 
are throwing people in more debt, and there are no winners if 
we keep on going the way we are going now.
    But thank you, Mr. Chairman, I think you can make us all 
winners and we can find a win-win solution to this.
    Mr. Kucinich. Thank you very much, Ambassador Young.
    Mr. Kucinich. The Chair recognizes Mr. Manning. I think you 
can use that mic to your left, Mr. Manning.

                   STATEMENT OF BURT MANNING

    Mr. Manning. Certainly, sir.
    I am humbled to be here. Is it possible to put up a brief 
PowerPoint presentation that would show some slides that I 
think would make the few comments that I have meaningful?
    [Brief pause.]
    Mr. Manning. As I stated earlier, I am humbled and honored 
to be here and be part of the program. I must say if I had done 
a more in-depth presentation, I would have probably wanted to 
copy some of the things you three Congressmen said to start 
with, some of the things that Senator Fort has said over the 
years and down at the end of the table when we get to it, 
Professor Immergluck, because one of the things that----
    Mr. Kucinich. How are we doing there?
    Mr. Manning. You have packages and I just wanted----
    Mr. Kucinich. Let us just wait a second and see if we can 
get this up. If we cannot, you know----
    Mr. Manning. It would help, sir.
    Mr. Kucinich. We are going to hold the clock. Can we get 
this working? And if not, maybe you could just give a summary 
of what the slide show represents. We will give it a try.
    [Brief pause.]
    Mr. Young. Mr. Chairman, while we are waiting, I have a 
letter from our mayor pertaining to this and a report by the 
Carl Vinson Institute on Dismantling Persistent Poverty in 
Georgia that I would like to submit for the record.
    Mr. Kucinich. Gladly receive it. Without objection, it will 
be entered into the record. Thank you very much.
    [The information referred to follows:]

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    Mr. Kucinich. I do not think this is going to happen right 
now. Mr. Manning, if you would like to begin with your 
presentation and we will reset the clock to 5 minutes, and if 
you would like to begin with your presentation and kind of 
summarize what the charts and the slides show. And what we will 
do, you know, when we post this on the Web, I will ask my staff 
to try to see if we can find a way to integrate your 
presentation, your slide presentation along with your oral 
testimony. OK?
    Mr. Manning. My pleasure, sir, thank you.
    Mr. Kucinich. You may proceed.
    Mr. Manning. I am pleased to represent the Fulton County 
Board of Assessors and we do represent all of Fulton County, 
slightly over a million of the five million people that 
Ambassador Young was talking about.
    Foreclosures have had a devastating effect on the values of 
individual properties and the overall tax digest in Fulton 
County. By all indications, this will continue for the next 
several years.
    As shown on the following charts, the number of valid, or 
arms length, sales have fallen. At the same time, the number of 
distressed sales have increased.
    Basically we went from having 40,000 arms length usable 
sales of just residential properties in Fulton County back as 
recently as 2006, down to less than 30,000 last year and only 
12,000 through the first 9 months of 2009.
    Similarly, we would have a little bit over 1,100 commercial 
sales per year throughout Fulton County to help us set our 
values on. That has fallen to 795, little less than 800 last 
year, and is only 340 so far this year.
    Residential sales specifically, if you notice on the left-
hand column, those of you who have the chart in front of you, 
28,000 valid sales down to 9400. Simultaneously in those same 
years, the other than typical, and this is anything that would 
be considered not an arms length sale such as a distressed 
sale, a foreclosure and other transfers, have risen 
dramatically in these years.
    There is a chart in there that talks about the sales ratio 
trends, which are important. You may know that we are measured 
on our percentage of value to the arms length and good length 
sales. The Board prides itself with trying to stay in the 92 to 
95 percent range, which is a very safe, secure range for the 
citizens of Fulton County.
    By all indications, based on the sales for the first 9 
months of this year, the values have fallen another 9 percent 
on the average across Fulton County. If we had to right now set 
our January 1, 2010 values, we would be lowering values another 
9 to 10 percent.
    Commercial sales have seen similar changes. Based on all 
projections, as we have already heard today, the fallout over 
the next couple of years may be even greater for commercial 
properties. Sales ratios show us that we used to have 750-775 a 
year and we would have half that in non-typical sales. In 2008, 
we had 328 in the most viable city and county in the Southeast. 
And at the same time, we had more than 50 percent more than 
that of questionable sales, of non-typical for the market 
sales. So far this year, we have only had 240 good sales and 
that is just hard to deal with when we are setting values.
    Sales ratios will show you that prior to us doing the 
commercial reval, we were running in the 80 percent range. We 
are holding in the 93-94 percent range. I actually believe that 
the statistics in front of you for commercial where we have 
labeled for 2010 are understated. It is based--it is what it 
says based on the sales that we have right now. But we are 
expecting the shoe to drop. We are expecting commercial sales 
and commercial values to fall.
    There was an article in the Atlanta Journal-Constitution 
just last week which referred to the 12 years of office space 
that we have available. If in fact, we are to fill the office 
space at the current rate it has been going, frankly, it would 
take a better than current rate to do it, it would take 12 
years to get us back to that point.
    The end result has been and will continue to be increased 
millage rates, as Congressman Westmoreland said, resulting in 
higher tax bills, even though appraised values have fallen, if 
the cities, the school boards and the county governments that 
depend on our tax digest are to provide the services they are 
supposed to.
    There is a chart in there that shows the gross digest by 
class and shows the residential part dipping. Again, it shows 
the commercial staying flat or up slightly; however, I am 
sitting here with $3 billion of assessed value in appeal from 
my 2009 commercial property. So by the time that gets resolved, 
I think you will see the downturn.
    Then, last but not least, I think we are a tale of two 
cities--two buildings, two cities. A couple of years ago, the 
Bank of America building sold for a little over $300 a square 
foot. It is billed to be the tallest building in the eastern 
United States outside the cities of New York and Chicago, and 
it is right here in Atlanta. And the people who bought it and 
invested in it thought that they had a gem. They are already 
appealing their value, they are already seeing occupancy fall 
and do not know where it will end. Simultaneously, right 
outside this building, you can look downtown and see a building 
called the Equitable Building. At the time when it foreclosed 
in June of this year, it was the third largest office building 
in the United States that had foreclosed this year. It sold 
originally in 2006 for $100 a square foot, it was foreclosed at 
less than $50 a square foot for a prime class A office 
    Respectfully, I am here if I can be any help to you. I 
appreciate the opportunity to participate.
    Mr. Kucinich. I want to thank Mr. Manning for that 
testimony. Thank you, sir.
    The Chair recognizes Mr. Brewer. You may proceed, Mr. 
Brewer, 5 minutes.
    [The prepared statement of Mr. Manning follows:]

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                   STATEMENT OF BRENT BREWER

    Mr. Brewer. Good morning, Chairman and members of the 
subcommittee. Thank you for inviting me here today to testify 
on issues concerning the residential real estate finance 
crisis. Over 3 years before the foreclosure crisis became a 
national issue, I came to be interested in the mortgage fraud/
foreclosure issue as an individual concerned about the many 
vacancies it created in my neighborhood of historic West End, a 
zip code 30310 community, and why our tax assessments were 
rising based on implausible property values.
    For the bulk of the last decade, the zip code 30310 
communities have been the most mortgage fraud impacted 
communities in the State of Georgia, as well as the nation. 
Mortgage fraud has turned about 30 percent of the homes in my 
neighborhood into empty shells.
    As the chair of the Historic West End Mortgage Fraud 
Committee, in November 2006, I organized a mortgage fraud 
inventory of my entire neighborhood that identified over 300 
out of 950 residential houses suspected of mortgage fraud, 
based on inflated sales history without evidence of renovation 
supporting the high sales prices. This extreme vacancy rate 
depressed property values, created a variety of public safety 
issues and deprived the neighborhood of new residents who could 
make a positive contribution to the development of the 
    Mortgage fraud also artificially boosted property taxes. It 
unfairly taxed any new homeowner who purchased in the 
neighborhood after 2000. Based on an inflated previous sale, 
the property tax increase was a disincentive to potential 
owner-occupants. New neighbors complained of paying an 
additional $300 a month in property taxes. It also is a 
persistent problem for long-term residents who see their 
property taxes increase even as the blight of vacant houses 
decreased their home equity. Even if the property tax is 
corrected, there is no hope of recouping this money.
    Thus, mortgage fraud has been the most pressing issue 
facing historic West End, a neighborhood which sought to 
protect its historic houses from fraudsters through a State 
historic designation and which wanted to market itself as the 
next intown single family residential destination.
    If you define a mortgage fraud property as a property 
bought and sold with no intention of anyone living in it for 
long periods of time, the prevailing mortgage fraud imagery has 
commonly been portraits of abandonment and blight, such as 
entire streets of vacant houses or overly priced properties in 
various levels of disrepair.
    In 2007, I produced a documentary with a neighbor, Pollock 
Richards, called ``When a House Is Not a Home,'' to show 
historic West End as a neighborhood of beautiful housing stock 
and neighbors with an elevated sense of community. Through 
addressing the issue and dispelling some misrepresentations 
about our mortgage fraud impacted neighborhood, we hoped to 
encourage new neighbors to move into the hundreds of houses 
left vacant by mortgage fraud activity, effectively turning our 
vacant houses back into homes.
    Once the extent of the mortgage fraud problem was 
identified, my neighbors redoubled marketing efforts to promote 
the historic West End to attract new residents to buy our 
vacant properties. During the 2006 and 2007 calendar years, the 
historic West End neighborhood was featured in Atlanta Journal-
Constitution articles, established a community newsletter and 
Web site to highlight the community's unique assets, re-
established a tour of homes event, and promoted their 
neighborhood in the spring and fall 2007 Home Atlanta Show.
    Just as important, the neighborhood demanded retractions 
for any stories that unjustly painted the neighborhood in a 
negative light. Consequently, the historic West End experienced 
70 sales in both 2007 and 2008.
    Since the foreclosure crisis went national in the fall of 
2008, the historic West End neighbors have addressed the 
foreclosure issue with the following actions: In November 2008, 
our neighbors were outraged that the city of Atlanta's 
Neighborhood Stabilization Program application failed to 
acknowledge that the HUD defined areas of greatest need 
overlapped the heavily mortgage fraud impacted neighborhoods of 
northwest and southwest Atlanta.
    Collaborating with four other southwest neighborhoods, the 
historic West End Neighborhood Association grudgingly supported 
an application for a not-for-profit organization to acquire, 
rehab and sell 25 foreclosed single family homes in the five 
neighborhoods. The not-for-profit organization, University 
Community Development Corp., was awarded an NSP grant. In 
support of the application, the neighborhood association 
submitted a list of approximately 34 closed single family fixer 
uppers in need of substantial repairs thought to be too costly 
for the targeted owner-occupant home buyer. These properties 
were concentrated in historic West End's northwest quadrant, 
the most mortgage fraud impacted portion of our neighborhood.
    In October 2009, UCDC contacted the neighborhood requesting 
additional properties because many of the properties on their 
original list were no longer available. In the northwest 
quadrant, considering the original list, there has been 27 
house sales with an average sales price of approximately 
$50,000; 21 of the 27 properties have been purchased by 
investors through cash sales, meaning there have only been 
warranty deeds. Even though those properties have sat empty for 
years, no building permits have been applied for. To the 
neighborhood's detriment, the speculation market appears to be 
out competing the neighborhood stabilization program effort.
    Thank you.
    [The prepared statement of Mr. Brewer follows:]

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    Mr. Kucinich. Thank you very much, Mr. Brewer, for your 
    Mr. Kucinich. We are going to go now to Mr. Brennan.
    I wanted to just state that usually we do not have the 
audience engage in demonstrations for or against witnesses, but 
in your case, Mr. Brewer, I feel like the historic West End is 
a neighborhood that I would applaud for too. So thank you.
    Mr. Westmoreland. I would like to make a comment if I 
could. I spent many a day at Gordon Theater there in West End, 
I do not know if you even know where it is at now. My father 
was a fireman for 20 of the 26 years he was on the Atlanta Fire 
Department at Lee and Avon. And all my shopping was done at 
Sears & Roebuck. So I am very familiar with that beautiful 
    Mr. Kucinich. The Chair recognizes Mr. Brennan. You may 


    Mr. Brennan. Mr. Chairman, other Members of Congress on 
this committee, thank you for inviting me to testify about this 
very serious problem that we have been addressing for almost 20 
years now, subprime predatory mortgage lending and other types 
of abusive mortgage lending.
    And Mr. Chair, I would ask for the benefit of the three 
Congressmen here if this chart could be passed out.
    Mr. Kucinich. Without objection, I would like to take a 
look at it myself. If staff would get that so we can follow it, 
please? Just pass it around, we have a lot of people in this 
    Mr. Brennan. I also have a blown up chart. I do not know if 
folks can see it, if it could be raised up somehow.
    Mr. Kucinich. Why do you not proceed then and we will take 
care of that.
    Mr. Brennan. Thank you.
    Mr. Kucinich. And maybe what you can do is hold that chart 
up so that people in the audience can see it and understand Mr. 
Brennan's testimony. Go ahead, please.
    Mr. Brennan. The point of that chart, Mr. Chairman, which I 
will get into in a little more detail, is that this subprime 
mortgage securitization system where subprime mortgages have 
been bundled together and securities issued off of them that 
are sold to investors, has driven this business and has driven 
our homeowners really into despair, confusion and foreclosures 
and it needs to be understood, to some extent, how it works and 
who has been pushing it so hard. Mainly the national investment 
banks, that jumped into this issue in a big way in the early 
part of this decade, have bundled together these mortgages to 
the tune of hundreds of billions of dollars with loans put into 
the pools that were unaffordable and are now not performing, 
and those are what we now call--I hate it when they say toxic 
assets--what they are are securities that are issued off of 
bundled together defective mortgages that were marketed to 
people like my client, Ms. Diane McCoy, who is sitting here, 
from Villa Rica, Georgia who is facing foreclosure. They will 
not settle her case and that is why we need to be looking at 
this chart.
    I am sorry to get a little emotional, but----
    Mr. Kucinich. Go ahead.
    Mr. Brennan [continuing]. We see thousands and thousands of 
cases where homeowners were driven into foreclosure by these 
terrible lending practices and nothing has really been done to 
stop it over 20 years that we have looked at this.
    And I would just briefly tell you that I started at Atlanta 
Legal Aid in 1968, worked in the northwest office which covered 
all of northwest and west Atlanta, which was primarily African-
American and still is to a great extent. And I observed in my 
work there that there was a vast amount of minority African-
American homeownership in those communities. Those folks had 
good solid VA and FHA loans and they were thriving. 
Occasionally a hard lender would come in from the white 
community and make an abusive second mortgage loan and we would 
handle some of those. But by and large, things were doing very 
    In fact, another very positive thing that developed right 
after that in the late 1980's was an effort of the Georgia 
Housing Coalition which filed a CRA complaint against then 
Trust Company Bank, saying that they were not making bank home 
buyer loans to African-Americans and that is how I met Senator 
Fort. He was on that committee at the time. And we had a 
hearing before the Federal Reserve and our request to require 
Trust Company Bank to make good, affordable loans to eligible, 
financially eligible African-American home buyers was turned 
down by the Atlanta Fed. And what resulted was a series--we 
brought our data over to the Atlanta Constitution and they 
published a series called ``The Color of Money'' that showed 
that these loans were not being made to black home buyers and 
it won a Pulitzer Prize and in my view changed banking, not 
just in Atlanta but all over the country. So that was very 
    Unfortunately, right on the heels of ``The Color of 
Money,'' which was published in 1988, came the subprime 
mortgage lending system. And in the early 1990's, at the Home 
Defense Program, which was created to deal with foreclosure 
rescue scams, we started seeing a stream of cases that would 
serve as a warning bell for events to come. Fleet Finance, a 
subsidiary of the largest bank in New England, Fleet Bank, had 
headquartered itself in Georgia and it was making atrocious 
refinance mortgage loans to low-income, largely minority 
homeowners. These loans carried outrageous interest rates 
ranging from 19 to 29 percent and high points and fees often 
exceeding 10 percent. Many of the loans were flipped 
repeatedly, thereby taking the equity out of the home. This was 
one of the first times where we saw this warning about the 
securitization, because all of the Fleet loans were 
securitized. Chemical Bank was the trustee and they were 
issuing securities to investors, even back then in the early 
    So we partnered, my partner Karen Brown, and I partnered 
with some very good private lawyers that were suing Fleet, 
including former Governor Roy Barnes and his associate Howard 
Rocklin and attorneys in Augusta, Georgia, one of whom was 
suing Fleet for race discrimination under the Georgia Fair 
Housing law. We filed a complaint with the Attorney General 
Michael Bowers and we really went after Fleet. We sued them in 
individual cases and they finally collapsed after they were 
featured on ``60 Minutes'' and we had settlements all the way 
around. And Fleet Finance went out of business, not Fleet Bank. 
It was later acquired by Bank of America, but we thought gee, 
this was a great effort. And a lot of attention was focused on 
what was happening with Fleet in Georgia and we thought no 
other national bank would ever dream of getting into this 
    In fact, just the opposite happened. During--I will just 
briefly go through two decades here--in the 1990's, we began to 
see a high volume of cases with The Associates. The Associates 
took over all the Fleet cases, it was from Texas. It was a 
finance company owned by the Ford Motor Co. and we were 
approached by ABC News to do a story about them on Prime Time 
Live. We did and as soon as that story aired, Ford 
disassociated itself from The Associates and spun them off to 
its stockholders as a standalone company. Then Citigroup bought 
the Associates. We were just amazed that Citigroup, which was 
then about to become the largest bank in the country, would be 
buying the worst predatory lender, but that is exactly what 
    And not just Citigroup, but we saw other companies such as 
First Union, Chase, Wells Fargo, Washington Mutual and even 
Bank of America, Nation's Bank, opening up subprime units. I 
will say one thing about Bank of America, a few years ago, they 
shut down their subprime units because they did not like the 
reputation or maybe the exposure they were getting. But the 
other banks jumped into it in a big way. Not just national 
banks, but investment banks. Lehman Brothers began this 
process. Lehman Brothers began underwriting securities based on 
loans originated by First Alliance Mortgage Co., one of the 
worst predatory lenders we ever saw. Eventually Lehman began 
acting as a lender for First Alliance, capitalizing it so it 
could make more and more abusive, predatory loans. This 
happened in spite of the fact that internal Lehman 
investigations revealed that First Alliance had extremely 
suspect lending and sales practices. But that did not stop 
Lehman and it did not stop----
    Mr. Kucinich. I am going to ask the witness if you could 
try to wrap up your testimony so we can try to keep the time 
    Mr. Brennan. Well, I will just end by saying this, you 
know, in the last decade, there were efforts to deal with 
predatory lending. Congressman Scott introduced a bill in 1993, 
a floating interest cap bill, a usury bill, that we thought 
would drive the lenders out. It did not--it passed the Senate, 
but not the House. And the Congress enacted the Homeownership 
Inequity Protection Act, which we thought would stop predatory 
lending. The triggers were set too high, it did not work. It 
had assignee liability. It gave the Fed--it gave Chairman 
Greenspan complete regulatory authority to stop predatory 
lending in any way he saw fit. He chose not to do so.
    You know, the States tried to get into it. Georgia passed 
the Homeownership Inequity Protection Act after North Carolina 
passed a very good law, which was the strongest in the country. 
The industry descended on Georgia when Governor Barnes was not 
reelected in 2002 and they amended that very good law that 
would have helped us tremendously, that had some assignee 
liability, they amended it and gutted it so it is of very 
little use to us today.
    So where do we end up? We end up in the 2000's with these 
companies running out of financially eligible borrowers and 
making loans to them anyway, unaffordable loans. When you make 
unaffordable loans, they put them into these pools, you are 
affecting the value of the securities for the investors, but 
you are causing foreclosures. There were almost 12,000 
foreclosures, as the chairman stated earlier for October. There 
is almost a like number for November and we have homeowners 
like my client, Ms. McCoy from Villa Rica, streaming into our 
offices with unaffordable loans. The first question we ask is 
how much was your income when you got the loan and how much is 
the loan. A typical senior income, $1,400 a month; loan amount, 
    Mr. Kucinich. I want to thank the gentleman for his 
    The Chair recognizes Ms. McCoy. Let me make sure I have 
this mic working there. You may proceed. We appreciate your 
presence here.
    [The prepared statement of Mr. Brennan follows:]

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                     STATEMENT OF TIA MCCOY

    Ms. McCoy. Thank you, Chairman Kucinich and members of the 
committee. Again, my name is Tia McCoy and I work with 
Resources for Residents and Communities, which is a 20-year old 
community development corporation here in Atlanta providing the 
groundwork when it comes to foreclosure counseling. We do meet 
with our families face to face and have an opportunity to hear 
hundreds of stories around how these things have happened.
    I did hear Congressman Westmoreland state in his opening 
remarks how foreclosure is destroying wealth. For us, and from 
where I sit, that is probably one of the least things we are 
dealing with. What we are finding is that this is destroying 
lives, it is destroying marriages, it is destroying families, 
it is destroying health as well. Where I sit, again, yes, we 
lost our equity and we lost our wealth, but that is one of the 
least things that we are dealing with when it comes to 
foreclosure counseling.
    For the families that we are seeing as it relates to 
foreclosure counseling, we are working with them not only 90 
days, but 6 months, 9 months, 12 months and we are still 
waiting to get answers many times from these services around 
what is taking so long in getting an answer to get a resolution 
for these clients.
    When we talk about foreclosure counseling, one of the 
unfortunate things is there is a lack of public awareness of 
the free services that are available. There are many HUD-
approved counseling agencies here in Atlanta that provide free 
foreclosure counseling where we can step in and be an advocate 
and help mitigate the losses. However, with our limited 
resources, many clients find themselves going to agencies where 
they charge fees, and they are making promises. I am sure you 
have heard about the scams that are going on. And when the 
client gets there, they spend their last resources hoping to 
save their home. These agencies are not being able to respond 
and they find themselves coming back to non-profits like RRC to 
get help, starting the process all over again.
    There definitely needs to be more awareness made around the 
services that are available from neighborhood organizations as 
well as HUD-approved counseling agencies. And again, the 
services that are provided are free.
    Working with services, that is a challenge that we are 
finding in-house. Many efforts are being made but not enough is 
being done at this point from what we are seeing. We are still 
finding it taking a long time to get a resolution. It should 
not take 6 months or 9 months to get an answer from a service 
as to whether they are going to modify a loan. It should not 
require a housing counsel or a client having to resubmit 
information three and four times over and over again, when the 
services will respond at times saying they received documents 
and at other times, they will respond saying they never 
received the documents. And we may even have documentation in 
file saying that they received it, but then again, they will 
turn around and say no, we have not received it.
    We are very concerned about the services and who they are 
hiring to respond to this crisis. Are these individuals 
qualified. Maybe that is something you all can talk about or 
discuss with them as they are beefing up to handle this demand 
that they are having to face. But are the staff members 
qualified and able to actually handle the work.
    There have been times where I have even called services and 
had individuals in my office and you have people on the line 
not even be able to calculate income. So here I am a counselor 
experienced at doing this, you cannot even imagine what a 
client would go through who is not even used to doing this. And 
having to get the run-around time and time again, especially 
when it comes to having to resubmit documents over and over.
    So we talk about the concern and the number of foreclosures 
that will occur tomorrow. But how many of those individuals 
actually picked up the phone and called the services to get the 
run-around. And here we are experienced counselors and we get 
that run-around as well oftentimes. So we do find a challenge 
out there working with services to getting direct answers.
    We would like to see that there would be a more systematic 
way in which all the services would operate. We know there is 
the Making Home Affordable Program and there are still a 
limited number of services that are a part of that plan. 
Everyone is not required to participate, so what happens to all 
of the other services that are out there and the clients that 
have to deal with those services who do not have to modify 
loans, or at least that is what we are told. They are not 
having to modify or make adjustments. So there are still a lot 
of other families that are being affected who may not be 
eligible for the Making Home Affordable product.
    Again, as I stated, one of the biggest difficulties we are 
finding and challenges is that in working with services, we are 
experienced and we have the patience, but what about the 
clients who are calling in trying to do what they are told to 
do, contact your lender. That is what they are told and 
instructed to do. So they are doing that, but they are not 
getting a response either because the staff is not aware of how 
to provide counseling or they are reading from a script that 
they are told to read from, which is not giving them an answer.
    Most recently, we just participated in the Hope Now event 
this past week and had a client that just left a meeting with 
their lender, SunTrust, and came and sat with us and we are 
like, well, why are you meeting with us, you just met with your 
lender. They had no idea what the lender told them. They were 
like all the lender said was give me your pay stubs and your 
documents and we will get with you later. So they came and sat 
with us so that we could give them further instructions as a 
housing counselor. This happens time and time and time again. 
Money and energy is being put into all these major national 
events, but what is the actual outcome. You know, is it just 
for someone to get their name out there to say oh, we did 
something. But what is the actual outcome of having all these 
    So as a counselor on the ground doing the work, you know, 
if we could get more participation from all the services, if it 
was required, as stated earlier, that all the lenders 
participate and have a systematic process in modifying loans, 
that would be great. And, you know, be mindful of the fact that 
they need to answer questions and respond to clients, because 
it is not about the wealth, it is about the lives that are 
being affected.
    Thank you.
    Mr. Kucinich. Thank you very much, Ms. McCoy, for your 
important testimony.
    The Chair recognizes Mr. Immergluck.
    [The prepared statement of Ms. McCoy follows:]

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    Mr. Immergluck. Thank you, Chairman Kucinich, Congressman 
Westmoreland and Scott, for inviting me here today.
    I want to make--on top of the really excellent comments 
that have been made already, I want to make four basic 
observations and five kind of broad policy recommendations.
    My first observation is that the foreclosure crisis in 
Atlanta began long before the national foreclosure crisis. We 
saw foreclosures rising here before housing prices dropped. In 
fact, they were a large cause of the housing price drop in 
Atlanta. They began really picking up early part of the decade, 
but really in 2005 and then exploded in 2007, especially in 
Fulton and DeKalb Counties.
    But over the last 12 to 18 months, foreclosures have been 
rising the fastest in the suburban and outlying counties. This 
year, for example, the number of foreclosure starts for a 
single family property in Henry and Gwinnett Counties is 
actually higher than DeKalb and Fulton, the long time leaders 
in foreclosure rates.
    My second point is that foreclosure properties, as Brent 
and others have said, have destabilized neighborhoods and I am 
afraid even after they come out of bank ownership, they are 
continuing to destabilize neighborhoods. Many foreclosed 
properties remain vacant and bank owned for many months, 
sometimes more than a year. At the same time, starting I think 
in the summer of 2008 locally, lenders began increasing their 
selling of foreclosed properties, especially lower value 
distressed properties, often at very low prices, a process some 
referred to as dumping. In the first quarter of 2009 in Fulton 
County, I estimate that 45 percent of sales of foreclosed 
properties in the country were priced at under $30,000, many at 
under 20 or $10,000. I think the same trends have been seen in 
Cleveland. Many of these properties are in need of substantial 
repair and improvement, they are truly distressed properties.
    When foreclosed properties are returned to occupancy and 
productive use, selling properties by banks can be a good 
thing. But it remains unclear how many of these properties are 
going into productive use. Many, as Mr. Brewer cited, are 
remaining vacant. Some are rented, but even then it is unclear 
how many are providing safe and secure housing. If they are not 
rehabbed sufficiently to do so, they are going to continue to 
cause distress in local communities.
    My third point is that many neighborhoods in the Atlanta 
region have experienced damaging booms and busts in property 
values, the same kinds of booms and busts that we have seen in 
places like Las Vegas, Phoenix, southern California, northern 
California and Florida.
    As an example, two neighborhoods on the south side of 
Atlanta, the Pittsburgh neighborhood and the West End 
neighborhood, saw steeper increases in prices and steeper falls 
than Phoenix, Las Vegas or any place else in the country. Part 
of this was fed by mortgage fraud and property flipping schemes 
which in turn were enabled by reckless subprime lenders who 
were more than happy--and mortgage brokers--who were more than 
happy to look the other way.
    My fourth point is that access to mortgage credit is 
currently extremely dependent on Federal intervention and we 
may be seeing a new rise in yet another dual mortgage market 
where modest income in minority community and homeowners are 
not well-served by conventional lenders. Due in part to the 
tightening of prime lenders, some would argue too much 
tightening, the share of home loans made by Federal Housing 
Administration lenders has gone from 5 percent to well over 25 
percent in only about 12 to 18 months. In modest income 
neighborhoods, this share is more like 40 to 50 percent or 
more. FHA loans are more expensive and have other 
disadvantages, so in the long term, I worry about the 
disadvantages replacing communities that have been hard hit by 
the very foreclosures caused by the subprime lenders.
    Implications for policies. First, the most important step, 
in my opinion, to bring back the stability of neighborhoods is 
to create a new framework for mortgage market regulation. 
Reckless behavior, I do not care who it is by--lenders, 
borrowers or both--poses grave harm to local communities. The 
most important thing Congress can do to bring stability to 
neighborhoods is to make sure we have a strong, serious, 
vigorous and comprehensive consumer financial protection 
agency. It is critical that the scope and the strength of this 
agency not be weakened any further. It has already been 
weakened. If we have learned one thing from this mess, we have 
learned that carving out parts of the industry to not be 
covered is what got us here. We need comprehensive, uniform 
regulation for anybody who wants to make a mortgage.
    My second policy point real quickly is that local 
communities, because they bear the brunt of this thing, have to 
be able to regulate at a higher level than the Federal 
Government. We cannot have any more Federal preemption.
    Third, the neighborhood stabilization programs have been 
important steps but, as Brent has argued and as my data shows, 
we are not seeing the majority of vacant homes no longer owned 
by banks in many neighborhoods. We need tools to deal with 
vacant and dilapidated properties that are not owned by banks.
    Finally, we need, as Senator Fort said, we need increased 
attention to fair lending, both backward and forwards. We need 
really to pay attention to access to credit in all communities 
around the country.
    Thank you.
    Mr. Kucinich. Thank you very much.
    We are next going to hear from Mr. Alexander, after which 
point each member of the committee will have 5 minutes to ask 
questions of any of the witnesses.
    You may proceed, Mr. Alexander.
    [The prepared statement of Mr. Immergluck follows:]

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    Mr. Alexander. Thank you very much, Mr. Chairman. I am 
delighted to be here today, Congressman Scott, Congressman 
Westmoreland, we appreciate very much your taking the time out 
of your schedule to be a part of this hearing, to hold the 
hearings here in Atlanta.
    As Ambassador Young said, it is my conviction that part of 
what got us here is that for the past 30 years, we have lived 
in a deregulated, an unregulated, market. We simply have 
forgotten the lessons that our parents taught us from years 
ago. When most of us were growing up, we were always told do 
not bet the house, do not mortgage the future. Well, we have 
done both.
    It is my hope that the hearings of the committee will yield 
the lessons to be learned as we move forward. And I offer to 
you this morning a series of lessons for us to learn, many of 
which my brothers and sisters on this panel have already 
touched on, so I will touch on very quickly. I expand on them 
in my written testimony.
    I divide the lessons into three different categories. The 
first are the lessons to be learned in responding to the 
immediate crisis. The second is the lessons to be learned in 
protecting our neighborhoods. And the third, the lessons to be 
learned to prevent this from reoccurring in the future.
    First, in responding to the immediate foreclosure crisis, 
the first lesson to learn is that mortgage modification simply 
will not occur when the debt exceeds the value of the property. 
We debated this, you all debated this at the time of the TARP 
bill. It was debated again by the current administration at the 
time of the stimulus bill. The loan modifications will not 
occur when debt exceeds value.
    What needs to be done, quite simply, is to change the 
bankruptcy code to give a bankruptcy judge the power to reduce 
debt to value. You can do this on commercial mortgages, you can 
do this on cars and boats, but not homes. This preferential or 
differential treatment for homes is what caused part of the 
crisis, it is not a solution to it.
    My second lesson to be learned from the current mortgage 
crisis is we do not know what is being foreclosed upon today. 
The data is not there. Our banks and mortgage companies cannot 
tell us much about the property they are foreclosing upon. We 
know the kind of mortgages that were originated, but we do not 
know of the 10,000 condos in Miami or the 12,000 properties 
being foreclosed on tomorrow, how many are occupied. We do not 
know how many of them are occupied by owners or by tenants. We 
do not know how many are unoccupied.
    Third lesson, we often do not know who is foreclosing. With 
the advent of the mortgage electronic registration system a 
decade ago, we created what we thought was an efficient system, 
which has rendered havoc. We no longer today know who holds the 
promissory note or the deed to secure debt that is foreclosing 
on us tomorrow.
    Fourth and final point about the current crisis is simply 
the importance of notice to occupants. In the Protecting 
Tenants at Foreclosure Act that you all passed last May, you 
provided that tenants' leases can continue post-foreclosure, 
but you did not provide that tenants are told that the property 
is coming up for foreclosure, and most States do not. Very 
simple point, tell the tenants they are facing foreclosure.
    With respect to the impact of the foreclosure crisis on our 
neighbors and our communities, I have some additional lessons.
    The neighborhood stabilization program is hugely important, 
but the economic climate in which you all passed it last June a 
year ago and amended it in May--in last February--for $6 
billion, is no longer the economic crisis today. You need to 
give Secretary Donovan discretion to adjust that program to fit 
the needs, whether a Fulton County, or a DeKalb County or a 
Cuyahoga County.
    Next point about the foreclosure crisis on others is we 
need to make sure that HUD's inventory complies with local 
laws. Right now, the Secretary has discretion, Secretary 
Donovan, to make sure his properties comply with local laws. 
But Congress has not required it. It needs to be done by the 
Secretary or Congress. There is no excuse for the HUD inventory 
to be substandard.
    We need to know who owns the foreclosed properties is my 
third lesson. The simple proposition here is to require the 
recording of every single foreclosure deed within 30 days. In a 
declining market, lenders have incentives not to record their 
deeds and we do not know who owns the properties that are 
killing our neighborhoods post-foreclosure.
    In this connection, we need to learn that in time for local 
governments to consider enacting vacant property registration 
statutes. Several jurisdictions are doing this. Not a Federal 
matter, but a State matter. To require that property which 
remains vacant for 30, 60, 90 days, that the owners of that 
property notify the government officials of who has 
responsibility for the property.
    My final point for the mitigating the impact on others is 
property taxes, Mr. Manning's area. We now know that property 
tax escrows were dropped in recent years. It is time to make 
the monthly escrow of property taxes mandatory. It is time to 
make lenders who foreclose notify the tax assessor, because 
those lenders are continuing to ride illegally homestead 
exemptions post-foreclosure.
    Other points about lessons to be learned, including 
prohibiting inherently dangerous products. As Mr. Brennan and 
Senator Fort have indicated, many mortgages are simply 
inherently dangerous and need to be prohibited. The Federal 
Government needs to set a minimum floor, not a maximum, but a 
minimum floor and then allow States to regulate above that.
    We need to reinvigorate mortgage insurance. Whatever 
happened to private mortgage insurance, and I suggest that 
should be the credit rating agency.
    And then finally, we need to standardize once again the 
conforming mortgage and explore at the State-level anti-
deficiency legislation.
    Thank you very much, Congressman.
    [The prepared statement of Mr. Alexander follows:]

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    Mr. Kucinich. Thank you, gentlemen.
    We are going to go to questions of the witnesses. I am 
going to begin with my 5 minutes.
    I am going to ask Mr. Brennan, Professor Alexander, 
Professor Immergluck and Senator Fort--we will start with 
Senator Fort. I am going to pose this question and I would like 
each of you to just give a try at giving me a brief answer.
    I have heard variously from the witnesses that there is a 
fundamental breakdown in responsibility by lenders and 
investors; one, investors who choose to allow loan 
modifications in the numbers and agree are needed; two banks 
made loans and sold them so they did not take responsibility 
for the quality of the loans; three and once in foreclosure, 
the investors and lenders do not take responsibility for 
property once the borrowers are evicted.
    Now all of the costs of this failure to take responsibility 
is being borne by the taxpayers in the form of the TARP 
bailout, increased cost on local communities in the form of 
vacant and abandoned houses, crime and so on.
    So I want to ask each of you, what is the solution to this 
problem in your judgment? Mr. Fort.
    Mr. Fort. As I said, this is an issue that strikes at the 
very core of straightening this mess out. There is some 
legislation in place here in the Georgia General Assembly on 
these issues and I have advocated in that legislation that 
there be assignee liability maintained. Without that, you know, 
what we have is a situation where people originate the loan, 
who make the loan, sell it off and they say it is not my 
problem, I did not do it, I just sold it, it is someone else's 
problem. And ultimately it becomes a lot of people's problem, 
including taxpayers.
    So I would urge, as I reiterate, that issue of assignee 
liability, make it concrete.
    Mr. Kucinich. Thank you very much.
    Mr. Brennan.
    Mr. Brennan. Of course, I agree with Senator Fort 
completely. These abusive lending practices need to be made 
illegal and regulated, especially the practice of lending 
without regard to the borrower's ability to pay, which has just 
been devastating on all fronts of that securitization 
structure. So we need laws and regulations on the national 
level to prohibit these abuses and assign assignee liability to 
the ultimate holder of the mortgage and even the investors.
    But on another front, quickly, to answer your question, day 
in and day out what we do for our clients is not what is being 
done by the Federal programs that have come along to help them. 
Every client we have has to have this result to stay in their 
home--lower the interest, lower the principal balance on the 
loan, make the payments affordable and fixed for people who can 
afford to make mortgage payments. And that is not what they are 
getting from the programs that are in effect now.
    Mr. Kucinich. I thank the gentleman.
    Let us try Professor Immergluck.
    Mr. Immergluck. I think short term/long term. Short term, 
there really has to be--to slow foreclosures, there has to be a 
much more aggressive Federal response still, and servicers need 
to be told that they have to modify loans if they are going 
to--and if not, penalties on TARP funds have to be applied 
somehow. I think there just has to be a hammer put down.
    Long term, we need much sounder, non-bubble inducing 
mortgage markets and the CFPA, Federal regulation that provides 
a floor and then covers every single mortgage lender in the 
country is the way to do that.
    Mr. Kucinich. Thank you very much.
    Mr. Alexander.
    Mr. Alexander. If you want to achieve large-scale 
modifications, you are going to need to have a bankruptcy cram 
down provision authorized. There will be no large scale 
residential modifications in the face of second mortgages and 
under the current PSA, pooling and servicing agreement 
structure, in the absence of a backdrop of a bankruptcy cram 
    With respect to the impact on--the devastating impact on 
neighborhoods, I think if you give Secretary Donovan the 
discretion to adjust the NSP allocation formula and use, you 
will achieve a much greater stabilization in the neighborhoods.
    Mr. Kucinich. Thank you very much.
    I have a question of Ms. McCoy. From the example that you 
give in your written testimony, it seems there is no incentive 
for a lender to address a borrower who may need some kind of 
loan workout, but who is not yet delinquent on their loan. Is 
there any way for a borrower who is experiencing difficulty, 
but is not yet delinquent, to get help from their lender, in 
your estimation?
    Ms. McCoy. What we are finding is that it is more 
challenging. Usually the lenders, it seems as if they are 
dealing with the cases that are maybe headed to foreclosure, 
those are the ones they seem to be dealing with. But if a 
client comes in and they are paying the mortgage on time, 
however, they have exhausted their savings and, you know, they 
lost their job 3 months ago, but they have been living on 
savings or whatever the resources that they had, they are not 
getting adequate responses. And sometimes even being told that 
there is nothing they can do, but yet from the perspective that 
we understand, yes, there is something you can do. So again, we 
are getting different information from that front end line of 
people we are dealing with at the servicer versus what we know 
around Making Home Affordable.
    Mr. Kucinich. Thank you very much. In the half minute I 
have, I want to go back to Senator Fort. You raised the 
question in your testimony of possible civil rights action. In 
our own community in Cleveland, we saw where there is just no 
question that there was predatory lending going on in the 
African-American community at a rate that was extraordinary and 
there are vast areas that are now empty as a result.
    Do you know of any activity that is going on right now with 
respect to litigation?
    Mr. Fort. Well, I know that--here in Atlanta?
    Mr. Kucinich. Right.
    Mr. Fort. No, no. The City Council here in Atlanta passed a 
resolution for the City to consult with attorneys to possibly 
do a suit, but no, it has not been done.
    Mr. Kucinich. Thank you very much, Mr. Fort.
    The Chair recognizes the gentleman from Georgia. Mr. 
Westmoreland, you may proceed.
    Mr. Westmoreland. Thank you, Mr. Chairman. I am just going 
to make some comments, do not really have any questions, but I 
would like to comment on a couple of things that the witnesses 
testified to.
    Senator Fort and Mr. Manning both talked about the values 
decreasing. This is--and I agree with Mr. Brennan, I hate the 
word toxic asset because these were not really toxic assets, 
but they became toxic assets when this TARP money went out to 
some of the larger banks. And it goes back to Ms. McCoy's 
statement of getting the run-around. They have no--had they not 
had these funds to balance their books, I think they would have 
been more willing to work with these people to try to work out 
their loans. Getting something in return, some type of payment 
on this loan is better than going to foreclosure, because that 
snowballs the effect of these values going down. And it is just 
complete madness that we keep doing this.
    We were told when the TARP bill came out--and this is the 
reason myself and Dennis and others really questioned this, 
Congressman Kucinich really questioned this, because we thought 
well, what kind of incentive does that give the banks to work 
with people. You give them $700 billion, what incentive does 
that give the guy that has a $1,400 a month house payment that 
his value is gone. We were promised by Secretary Paulson that 
there would be a floor put on these assets. That was not done. 
Immediately the next day, the direction of this money was 
changed. And from that we have had people suffer greatly with 
the loss of value. And I agree with you, it is not just wealth, 
it is a lot of different things that you suffer when you go 
through that through no fault of your own, but because your 
neighbor or somebody else made a fraudulent decision, like Mr. 
Brewer talked about, or a mortgage company did something.
    And let me add to it, what Mr. Brewer spoke about has 
killed the appraisals in this area. There was a front page 
article in the AJC this morning talking about the very fact of 
the appraisals killing his ability to be able to restructure 
his loan.
    So all of these things are working together and I just want 
to thank again my friend, Congressman Kucinich, for having this 
hearing, because I think it is going to bring a lot of things 
to light in a market where we I think have suffered maybe more 
than a lot of other cities. And I want to thank the gentleman 
for that.
    Mr. Kucinich. I thank Mr. Westmoreland for the role that he 
has played in making this hearing happen.
    And now to our colleague, who has been an equal partner on 
matters relating to the security of his community. You may 
    Mr. Scott. Thank you so much, Mr. Chairman.
    Let me start with you, Mr. Alexander, because you I think 
have really nailed the nail on the head in so many ways and 
points out why we do need to pause and get some sort of 
moratorium on all of this because of all of the questions, all 
of the issues that you brought up.
    Let us start, for example, with the neighborhood 
stabilization program. I was very instrumental in getting that 
piece done. Here is the point. The point is the cat is already 
out of the bag on that. We have already put out $153 million 
right here into Georgia. Many people do not know that, but 
there is $153 million that is available in Georgia right now. 
It has been split equally pretty much, the State has $73-74 
million, divided up into local and counties, I just announced 
and presented a check of $9.7 million into Clayton County last 
week. And for those that night not know, the neighborhood 
stabilization program is there to buy up this property that is 
bringing down neighborhoods that are abandoned and rehabbing 
those and reselling those. Very instrumental we thought in 
getting money turning around in the communities to stay in 
there. But you made a point that, you said you felt that was 
not effective or a suggestion, a recommendation that Mr. 
Donovan do something.
    With it out of the bag, with the money already out, what do 
you say now?
    Mr. Alexander. I think, Congressman, that the NSP program 
is still an excellent program. It can be made more productive 
and effective if you give Secretary Donovan power or discretion 
to adjust the allocation--not the allocation amount, but the 
utilization formula. Specific example is, as you are aware, the 
NSP money can only be used to acquire foreclosed property, but 
not properties that have simply been abandoned. The NSP program 
requires it to be purchased on the average at about 95 percent 
of fair market value. Fair market value is tremendously 
difficult in some of our neighborhoods, in Pittsburgh or in 
    Finally, we are discovering that we cannot use the NSP 
money because we do not know the bank inventory. Because 
foreclosure deeds are not being filed, we do not know who 
really owns that inventory. We are actually using the NSP money 
to buy property from third-party speculators as quickly as we 
    Mr. Scott. What I would like for you to do is, if you do 
not mind, if you would get that to me in writing so that I can 
pass those on to the Secretary as we move forward, because that 
is already moving. And I think that would be an excellent, 
excellent contribution there.
    Mr. Alexander. Yes, sir.
    Mr. Scott. Now let me go on to you, Mr. Immergluck, and a 
few others here on this issue.
    As you know, we finally, finally were successful in getting 
some of the TARP money to go toward helping folks in their 
foreclosures. And it is called the Making Home Affordable 
Program. Anybody here familiar with that, the Making Home 
Affordable Program? That is good.
    And I want to get your feedback on that. Essentially what 
we tried to do is we have $50 billion set aside out of the TARP 
money to go to help people get their loans modified and to get 
the principal and the monthly payments down to a level that 
would be less than, not more than, 31 percent of their monthly 
income. That is basically that program. Is that working? What 
do we need to do to adjust it?
    Mr. Immergluck. Well, it is certainly better than previous 
attempts, but the first point I would say is Professor 
Alexander's comment about the lack of the bankruptcy cram down, 
which should have been put through--well, when Senator Durbin 
introduced it in early 2008, actually an earlier version in 
2007, if that had been available all of the efforts would have 
worked better because it would have effectively dealt with the 
upside down mortgages.
    Now what is happening, the banks are acquiring the property 
at foreclosure and then selling them for $30,000 anywhere. 
There is no rationality in that. They would have been better 
off with a bankruptcy cram down, that is clear.
    The second thing is the fact that the servicers were never 
designed, the system was never designed to deal with 10,000 
foreclosure filings a month in the metropolitan area. And no 
matter how many--you give them $1,000 here and $1,000 there, 
you know $1,000 on a million foreclosure filings is a billion 
dollars. That is chump change in the scheme of TARP. So the 
incentives that were built into MHA were not nearly strong 
enough. There had to be a stick and the stick--I am afraid I am 
going to put it a little bit back on Congress because Congress 
did not want to do the stick.
    Mr. Scott. Right.
    Mr. Immergluck. Which was the bankruptcy cram down.
    Mr. Scott. Absolutely.
    Mr. Scott. I am glad to hear that because we wanted to get 
that in there.
    Much of what we tried to do, we did not get it 
sufficiently, but at least we have those.
    May I just ask for indulgence? I wanted to ask Ambassador 
Young a question. We do not have a banker up here just yet----
    Mr. Kucinich. We have a number on the next panel.
    Mr. Scott. But I wanted to get Ambassador Young's point 
because he has been working with some banks and has some ideas. 
And I wanted to get your take on do you believe that the FDIC 
is doing an efficient job in this area?
    Mr. Kucinich. The gentleman's time has expired, but we will 
certainly permit him to ask Ambassador to respond.
    Mr. Scott. I appreciate your indulgence because he will be 
gone after this.
    Mr. Young. I am not a banker and I am not a lobbyist for 
banks, but I do have a lot of respect for FDIC if they were 
given an additional flexibility. I think when they were 
structured in the wake of the savings and loan crisis, you had 
a line in the sand. I think that the FDIC is the only 
institution I know about that could work with banks, that do 
not have predatory lending. Rural banks are dealing with 
farmers and small businesses and I think they know the banks 
better than anybody else that I know about and with a little 
more discretion and time, I think a lot of these things could 
be worked out in Georgia.
    I do not expect--I am an optimist. I do not expect this to 
be a 10-year crisis. I think we are working our way out of this 
gradually and if we do not make it worse by closing down 
businesses, closing down banks, closing down more houses for 
people who are struggling to make ends meet.
    Mr. Kucinich. I want to thank you, Ambassador; thank you, 
Mr. Scott.
    Mr. Scott. Thank you for your indulgence.
    Mr. Kucinich. We have now concluded the work of the first 
panel. It has been extraordinary, your testimony has been 
excellent. Let us hear it for the members of the first panel.
    Mr. Kucinich. We are going to take 5 minutes recess, and 
let me tell you it will be 5 minutes. And then we are going to 
start right away and I would ask the second panel to come 
    We will recess for 5 minutes and we are going to move this 
along. Thank you.
    Mr. Kucinich. Thank you very much for being here. We are 
going to resume the hearing. I am going to introduce the 
witnesses and then we will go to the witness statements. The 
witnesses are as follows:
    Ms. Saqirah Redmond is a homeowner, who will share with us 
the challenges she faced in obtaining a loan modification from 
her mortgage lender.
    Mr. Andrew Schneggenburger is the executive director of the 
Atlanta Housing Association of Neighborhood Based Developers, 
it is a coalition of Atlanta area community-based organizations 
advocating for, dedicated to improving the quality of life in 
under-served neighborhoods through the support of community 
economic development and affordable housing activities.
    Mr. Joe Brannen is president and CEO of the Georgia Bankers 
Association which is the trade and professional association 
representing virtually all of Georgia's commercial banks and 
thrift institutions.
    Mr. Jeff Betsill is president of Jeff Betsill Homes, Inc. 
Mr. Betsill's company operates with 10 full time employees and 
has built many of the homes and commercial buildings in the 
south metro area of Atlanta.
    Mr. Michael Rossetti is the president of Ravin Homes, Inc., 
which has built thousands of homes and has completed numerous 
commercial development and commercial renovation projects 
throughout Peachtree City, Fayette County and the south side of 
    Finally, Mr. Jon D. Greenlee is the associate director of 
the Division of Banking Supervision and Regulation of the Board 
of Governors of the Federal Reserve. In this capacity, Mr. 
Greenlee is responsible for assessing current and emerging 
risks in the banking system and oversees the Federal Reserve 
system's supervision of credit market liquidity operational and 
compliance risks.
    It is the policy of the Committee on Oversight and 
Government Reform to swear in all witnesses before they 
testify. I would ask that the witnesses stand and raise your 
right hands.
    [Witnesses sworn.]
    Mr. Kucinich. Let the record reflect that each of the 
witnesses has answered in the affirmative.
    As with panel one, I am going to ask that each witness give 
an oral summary of his or her testimony and keep the summary 
under 5 minutes in duration. Among other reasons, because 
Members of Congress have to catch a plane to get back for 
votes. But other than that----
    Bear in mind your complete written statement will be 
included in the record of this hearing.
    I am going to start with Ms. Redmond. We appreciate that 
you are here. Please proceed for 5 minutes. Go ahead, please.



    Ms. Redmond. Chairman Kucinich and members of the 
committee, thank you for allowing me the opportunity to testify 
today. My name is Saqirah Redmond and I am here today to tell 
you about my struggle with a deceptive and misleading mortgage 
situation and an extremely difficult loan modification process.
    Mr. Kucinich. You could actually slow down a little bit. If 
it is not all in there, we will get it in the record, if you 
cannot get it in.
    Ms. Redmond. OK, I am sorry.
    Mr. Kucinich. No, no.
    Ms. Redmond. I have lived in Atlanta for about 18 years. I 
came here to attend Clark-Atlanta University, where I obtained 
my B.A. in accounting. I managed to go to college despite I was 
a ward of the court, and earned my Master's degree as well. 
After college, I bought my first house at 22, with a 30-year 
fixed interest loan. I owned it for 8 years, never missing a 
payment. I started a good career here, working for Turner 
Broadcasting and other jobs here in Atlanta. I married and 
started a family and we determined that we needed a larger 
home. That is when my saga began.
    In 2002, my husband and I obtained a mortgage from Home 
Banc. The loan was a 3.7 interest only LIBOR loan that reset 
every 6 months. After a couple of years, we also took a home 
equity mortgage out in order to pay off some bills. In 2005, I 
decided to refinance my mortgage to a 30-year fixed because I 
was not used to the interest only loan going up every 6 months. 
In order to do that, I had a friend that was in the business 
doing loans and she worked with Diversified Mortgage. So I went 
to her and told her I needed a 30-year fixed mortgage and to 
consolidate the two loans, so I could make one payment. My 
husband and I both had great jobs and we had great credit at 
the time. Diversified indicated that there was no problem for 
me to get a 30-year fixed mortgage.
    When it came to closing, it was postponed three to four 
times. I would take off of work and make arrangements for 
closing that would be canceled. I was getting very stressed and 
frustrated. When I finally got to the closing table, they told 
me my new lender was Saxon and I was supposed to have a 6.7 
interest rate and they gave me a 7.3 interest rate. When I 
balked at the closing table, they told me, contact Saxon and 
they will change your loan for you. At the time, I went to 
Saxon and they told me there was nothing they could do, do not 
worry about it, you will be great, for 2 years.
    At the time 2 years later, I began to realize--I started to 
get phone calls from Saxon telling me my loan was going up to 
$2,400 to $3,000. I said what are you talking about when I 
should have a 30-year fixed rate mortgage? She said no, you 
have a 2-year fixed. I said what is that? She said it is called 
2/28. To me that number stuck out to me because that is my 
birthdate. I said I never knew anything about a 2/28. She also 
told me I made $9,000 a month. I said we do not do that as 
well. Then she also indicated I had a 7.3 LIBOR loan. I said 
LIBOR loan, I do not know anything about a LIBOR loan because I 
had that before and it does not make sense for me to go from 
3.7 to 7.3 LIBOR loan. So I went on, there was nothing I could 
do until I filed a complaint against Diversified Mortgage with 
Georgia Department of Banking and Finance. I filed a complaint 
with them, they told me there was nothing I could do then, that 
my paperwork was correct that they filled out.
    So with that said, I kept pushing. I had financial 
struggles, me and my husband at the time were having marital 
problems, financial problems and the stress of the mortgage was 
getting to us, but I kept pushing. Then finally Saxon told me 
that I can stop my foreclosure--my interest from going up if I 
decide to not make my payments on time. I was making my 
payments on time. They told me to stop for 2 months and I would 
get in the program. I did that. At that time, yes, it stopped, 
but however, that was not fixing the problem, that was just 
freezing my interest rate which I never thought I had an 
interest only.
    For awhile after the interest rate froze, unfortunately I 
lost my job as of February 2008. I called the mortgage company 
to see was there anything that they can do and they told me 
yes, stop paying your mortgage again and we will put you in the 
modifying program. So I did what they told me, I stayed on the 
phone--I have records to show I was on the phone 2 to 3 hours 
at the mortgage company trying to get this situation situated.
    During this period, my credit was destroyed because I was 
late on my mortgage and I lost my job and with that said, I 
lost paying bills. I could not even get a job in the accounting 
field because of all of information that was on my credit, 
telling me that I would be a detriment to the company thinking 
I would steal money because I was behind on my mortgage 
payment. I was getting sick from stress and my marriage was 
failing. I kept calling Saxon, they kept saying they did not 
have the appropriate documents that I faxed to them, there was 
nothing they could do. I even certified my packet to them, the 
VP. Georgia Banking and Finance gave me the information.
    I contacted the non-profit counseling agency, Resources 
Center, RCC. That was when my problems got better. I heard 
about the non-profit organization, which it took me a long time 
to get to them, mind you. This information is not out there for 
people. When I contacted them, they told me that I would work 
with a counselor and he would advocate for me and send my 
paperwork to followup. Mr. Dowdy helped and I was able to get a 
trial modification from the Making Home Affordable program in 
August 2009. So I went from 2005 to just now getting my 
situation straightened out. I have made three payments through 
the trial modification and working to negotiate a permanent 
    I thought by now I would be in a better employment 
situation in my field. Instead, I have been working in a day 
care field for the past year at much decreased pay. I got a job 
in the day care field due to the fact that I own a business 
providing summer camps and college tours for teenagers. I am 
caring for two children, I am divorced, and I have lost my car. 
But I am hopeful that eventually the economy will pick back up 
so I can get back into my career field.
    Thank you for the opportunity to testify and I hope the 
comments will in some way help protect others from having to 
struggle with similar difficulties.
    Mr. Kucinich. My Lord, I have to tell you something, this 
is very powerful testimony and our subcommittee will be in 
touch with you because we are going to go deep into those 
people who led you down this path. We will leave no stone 
unturned in getting into your documents and bringing justice. 
This is really very gripping testimony. Thank you.
    Ms. Redmond. The State of Georgia was doing that.
    Mr. Kucinich. I am glad to hear that, we will give them 
some help.
    Mr. Scott. Mr. Chairman, what was the name, Saxton or----
    Mr. Kucinich. We are going to get the details and you can 
be part of that, Mr. Scott.
    The Chair recognizes Mr. Schneggenburger.
    [The prepared statement of Ms. Redmond follows:]

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    Mr. Schneggenburger. Good afternoon, Chairman Kucinich, 
Representative Westmoreland and Representative Scott, thank you 
again for the opportunity to tell our story. Us being the 
Atlanta Housing Association of Neighborhood-based Developers. 
We are the association of non-profit community development 
corporations and non-profit affordable housing developers 
working in and around Atlanta. Our organizations, like RRC, who 
is a member of ours, are the organizations that are on the 
ground, on the front lines, working on all fronts to try and 
restabilize communities, restabilize homes, restabilize 
people's lives in the face of this current crisis.
    Our members develop typically two types of housing, single-
family housing mostly in the inner-city neighborhoods, which I 
say our organizations work in the neighborhoods primarily 
around the southside of Atlanta, the first ring neighborhoods 
just outside of downtown. I would like to add actually from 
some of the testimony in the first session, when you look at a 
map of the highest rates of foreclosures overlaid over a map of 
the majority minority neighborhoods in Atlanta, they are 
virtually the same map, an indication of some of the lending 
practices that were hinted at, talked about in the first 
    Our organizations, again they develop two types of housing, 
the single-family housing in those single family neighborhoods, 
and then also multi-family housing for rent, both in Atlanta 
and outside the city.
    The financial crisis is having a severe impact on our 
member organizations' ability to develop housing, to develop 
affordable housing. Primarily, for single-family projects, the 
lack of financing for construction. Some of our members have 
been told flat out that banks will not be lending for 
construction until the market turns around, and there is no 
indication of what that means to anybody at this point. So as a 
result, development, construction has basically ground to a 
halt. And this is a huge problem for a number of our members 
because they rely on developers' fees to support operations of 
their organizations, to support other programs, some of the 
other social outreach programs, the homeowners' counseling, for 
example. So that lack of revenue is having a huge impact on 
many of our organizations' viability and the ability to keep 
doors open and keep programs operating.
    As far as the multi-family housing, most of that is 
developed using the Low Income Housing Tax Credit Program, the 
Federal tax credit program to develop affordable housing. This 
program is basically run by private investment where investors 
buy tax credits to offset their tax liabilities and those 
investments go directly toward the development costs for the 
housing. As a result, much lower income target levels can be 
reached for occupants for these rental homes. These projects 
are being impacted in two ways, also by the fact that lending 
for these projects, construction lending, is really very 
difficult to get with reasonable terms; and second because the 
tax credit program has been rendered basically useless by 
current conditions. With so many companies and so many 
investors posting losses, there is a much reduced need to 
offset their tax liability and so terms to purchase those tax 
credits are very, very unfavorable for being able to put these 
deals together.
    So this very important program, which takes care of a 
significant percentage of the amount of financing for 
affordable housing, rental affordable housing across the 
country, is really not working at all right now.
    A third thing I would like to add real quick is there has 
also been an impact on small business lending. One of our 
members is a micro-lending organization, they do micro loans to 
startup businesses, specifically targeting disadvantaged 
entrepreneurs in disadvantaged neighborhoods who are trying to 
startup. They do loans ranging between $500 to $15,000. They 
have seen in the last couple of months, while it has been very 
good for them, they have seen an uptick of about 40 percent in 
their weekly orientation sessions. In addition, they have seen 
average credit scores for people coming to those orientations 
rise from the low 500's to the low 600's, and that is an 
indication that these people who would normally be eligible for 
a more standard business loan product are having trouble 
getting them, so they are coming to the micro fund to try and 
see if they can get some of those products.
    Mr. Kucinich. I thank the gentleman.
    The Chair recognizes Mr. Brannen, and you may proceed for 5 
    [The prepared statement of Mr. Schneggenburger follows:]

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                    STATEMENT OF JOE BRANNEN

    Mr. Brannen. Thank you, Chairman Kucinich, for inviting us 
to testify today. Let me also thank Congressman Westmoreland 
and Congressman Scott, two of our good representatives that are 
representing the very difficult areas of our State, most 
hardest hit in Georgia. Thank you for letting us explain the 
ongoing effects of this difficult economy on our members, our 
customers and our communities.
    Georgia Bankers Association has 322 members, the vast 
majority of them are community banks, community-based lenders 
and I want to spend most of my time today talking about how 
they and their customers are affected.
    We are grateful for the role this hearing can play to help 
you advocate for policies that will remove obstacles that are 
making it difficult for our members to even serve their 
communities. Twenty-five Georgia banks have closed since 2008, 
out of 352 active banks at the beginning of that year. Those 
numbers are just the facts. The real question is why have there 
been so many? The answer is simple, the banks were closed 
because their customers could not pay back their loans and 
private capital was not available to support the losses.
    It is important to keep in mind that Georgia's banks were 
lending to support the small businesses that were building 
supply and selling homes for a rapidly growing State, the sixth 
fastest growing State in the country. Metro Atlanta region's 
growth averaged 120,000 new residents every year for a decade. 
All credible evidence showed that growth continuing for some 
    The real estate market collapsed last year when mortgages 
of all types became more difficult for homeowners to get, 
secondary mortgage markets evaporated and our State 
unemployment numbers skyrocketed. These broad economic factors, 
a concentration of residential construction lending, borrowers 
unable to meet their obligations and private capital sitting on 
the sidelines caused these banks to close.
    These closures have been community banks supporting high 
growth suburban areas as well as urban neighborhoods. One of 
our early closures was a bank that focused solely on 
refinancing the rehabilitation of homes in blighted inner-city 
    While the business model of our banks, some of our banks, 
and their customers can be questioned, we also believe that 
aggressive interpretation of aggressive regulatory policies and 
accounting rules have contributed to those closures. Unless the 
application of these policies is modified, we see continued 
stress among borrowers and the bankers that finance them.
    The economy and regulatory policies have put banks between 
a rock and a hard place when it comes to lending. Most of 
Georgia's banks are small businesses like the small businesses 
they serve. Most employ fewer than 50 people. Banks are in the 
business of making loans to credit-worthy borrowers, that is 
how they serve their communities, that is how they make money. 
In fact, Georgia banks have over $211 billion of loans 
outstanding today. Loan demand is down as more people are 
saving to pay off debt and companies have put off expansions or 
additions to inventory. But we also know that credit is not as 
easily available as it was in the recent past.
    Traditional banks, those that we represent, are expected to 
be prudent lenders. You can certainly understand their caution 
when they see their non-performing loans at historically high 
levels, no significant sign that the rising loan delinquencies 
is subsiding and personal and business bankruptcies being at 
abnormally high levels.
    Also, our banks are struggling to maintain adequate 
regulatory capital levels because of ongoing and rising numbers 
of troubled loans. To keep capital at the required levels, 
banks often cannot deploy that capital to provide more credit 
as they have to account for that credit with future and current 
    Please understand, we are not suggesting that our 
regulators stop doing their job. They are good people trying as 
best they can but some of the regulatory orders, a third of our 
banks are under a regulatory order, which is in itself 
restricting lending. We are not asking them to quit doing their 
job, but the enforcement tools they have to use are not 
appropriate for this environment.
    If we could identify one issue that is perhaps the biggest 
obstacle for recovery in the real estate market, it is the 
continued and artificial losses in real estate values. Banks 
and their customers are being forced to use real capital to 
account for theoretical losses. Commonly referred to as mark to 
market, but more accurately called the fair value of real 
estate, the aggressive application of this accounting rule is 
sapping capital that we could use to support more lending.
    Another issue relates to real estate appraisals. You heard 
about that in the previous panel. In a non-functioning market 
like we have today, getting a meaningful appraisal is 
practically impossible. We ask our regulators to work with us, 
to be more understanding and not require our borrowers to 
produce more capital and pay down their loans just because the 
underlying real estate values have fallen.
    I mentioned that private capital was scarce with community 
banks. We ask that you consider pushing Treasury to open the 
Troubled Asset Relief Program for more community banks and we 
ask your help with our regulators to quit forcing us to shed 
brokered deposits out of troubled banks and postpone the 
national rate cap rule scheduled to go in effect in January. We 
need those deposits, we need to be able to lend in our 
communities and we need your help.
    Our highly regulated banking industry is the key for our 
State's growth and the success of our State. There is work to 
be done and we look forward to working with you for those 
    Mr. Kucinich. Thank you very much, Mr. Brannen.
    The Chair recognizes Mr. Betsill. You may proceed for 5 
    [The prepared statement of Mr. Brannen follows:]

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                   STATEMENT OF JEFF BETSILL

    Mr. Betsill. Thank you for allowing me to be here today, 
Mr. Kucinich and Congressman Westmoreland, Mr. Scott. Thank you 
for taking the initiative to delve further into the problems 
that plague our industry and the general economy. I have spent 
many hours throughout the past 3 years speaking in this regard 
with a couple of my industry associates, Mr. Cumming and Mr. 
Patterson who are in California and have been pushing for 
finance reform for the last 3 years out there with Congressman 
Issa--I believe I said his name right.
    I find it real ironic that I am here, a guy from, you know, 
BYU, Back Yard University, is sitting here amongst this panel 
discussing these issues that are very serious in nature and 
very, very dear to my heart, which is the homebuilding 
industry. For the last 35 years, that is what I have been 
involved with is home construction, home industry. My father, 
Alex, was a carpenter and I grew up working alongside him, 
learning the trade at a very early age. From my father, I 
learned the value of hard work and commitment to any task that 
I undertook, whether it was cutting grass or building a home, 
it was important to him that we have total commitment to what 
we did. I learned also to include the quality and do the right 
thing no matter what it cost, even if it was monetarily. 
Sometimes we do not always make money at everything we do, 
sometimes it costs us something. My love for taking a vacant 
lot and coordinating the materials and the labor to produce a 
great home has always driven me to stay in the homebuilding 
    I would appreciate you granting me a moment to focus on the 
word ``home.'' As was mentioned earlier, talking about it is 
not just foreclosures, but it is the effects of the 
foreclosures. A home, at the most heartfelt definition, is the 
place where Americans raise their families and share their joys 
and their hurts. As a young builder, I would converse with home 
buyers that purchased a home of mine, that it was the best 
investment they would ever likely make in their lives. Owning a 
home is a start to sharing in each other's lives. And of 
course, at that time, I believed the value of a home would 
always either maintain or increase in value. In the 32 years 
preceding the experience we are all now a part of, I had never 
seen the value of a home decrease. I obviously did not 
understand the factors controlling my world.
    I sit before you today to discuss my experiences throughout 
the downturn with a particular construction lender in my 
business. Unfortunately, I hate to admit this, but early in my 
years of owning my own company, I was not nearly as schooled in 
the lending practices as I am today. I always believed that 
working hard, while considering the quality of the home and 
experience I was producing would pay a beneficial net result 
for all who was involved. I would be misleading this committee 
if I led you to believe I was an individual that completely 
understood what lenders of both construction and home loans, 
could and could not do.
    I will share with you my experience with a lender to my 
organization and the effect their action had not only on my 
company, but also my employees and the general population. The 
particular situation I am referring to began in a subdivision 
in close proximity to where we sit today. This subdivision was 
named one of the top 30 subdivisions in the metro Atlanta 
market. We began construction using funds lent from this lender 
in late 2004. Three builders made the builder group in this 
subdivision and each builder I would say averaged approximately 
25 home closings per year throughout late 2007. The margins we 
were able to get in this location were strong and we were 
building primarily on a pre-sale basis. It was truly our 
greatest source of income.
    In mid-2008, we asked for a couple of speculative loans 
with a couple of pre-sale constructions with the lender. To 
approve the loan requests, the lender asked for routine 
information. In the prior years, approval was pretty much a 
guarantee in less than 2 or 3 weeks, especially at this 
subdivision. Well, approximately 3 weeks went by and we 
followed up for an update as to the loan requests. They 
requested additional, less typical information. We provided the 
requested information and another month or so went by without 
approval. Then we received a phone call from a loan officer we 
had known for many years working for the bank. In the 
conversation with him, he advised my company that our company's 
loan portfolio was moved to special assets division. Of course, 
I was completely shocked, given the rate of sales and margins 
being achieved, and asked the question why. The loan officer 
went on to state that the bank was looking at all collateral in 
place prior to the beginning of the downturn as--here is that 
word again--toxic assets. Of course, this was the reason behind 
the loan portfolio being moved to the special assets division 
of the bank. With the move of the loan portfolio to special 
assets, we were told nothing would change, just additional 
scrutiny for each request.
    Additional scrutiny occurred and we provided more and more 
information. A few weeks more went by and then we were 
requested by the lender to travel to a location approximately 
an hour and a half away from our office for a meeting. At that 
meeting, the bank's loan officers advised me, which was two 
gentlemen I had never met before in my life--they advised me 
that they were proceeding with foreclosure on all my lots we 
had with them. They did the same with the other builder 
remaining in the subdivision. At the time, we were current, we 
were making our interest payments. It was approximately 6 
months from the initial loan request to when the meeting 
occurred. During the foreclosure process, we had continued 
interest in building pre-sale homes in this particular 
subdivision and begged our lenders to allow us to do a workout 
strategy, even giving them options for our company working 
through all the lots in an 18-month period. Many additional 
options were provided to the lender in an effort to avoid 
foreclosure. At one point, we received a response that the 
lender was not considering any options and that they were 
proceeding toward final foreclosure. Which for me at that time, 
when that happened, it hit me in the stomach and just took all 
the life out of me at that point, whereas they told me they 
were going to foreclose on a perfectly good subdivision.
    Of course, the impact on my company as a result of such a 
decision has been close to impossible to overcome. The 
subdivision was our income producer during a difficult time. 
The actions by the lender stigmatized my company and myself as 
a result of the foreclosure proceedings and have made it nearly 
impossible to obtain financing on any scale for continued 
operations. I have tried to work through my lots in inventory 
with additional lenders in a buildout program and have been 
fairly unsuccessful in that regard. And as kind of a side note 
there, I have had some small community lenders who have been 
creative in their approach to trying to work out buildout 
programs within the lots that we have with those small 
community builders. With the decision of our lenders to 
foreclose, we have lost two contracts to build pre-sales in 
that same location. We were forced also as a result of the loss 
of income, to lay off many employees.
    We have witnessed similar situations occur time after time 
involving many builders in our area and have read stories 
nationwide which contain similar components to ours. These 
lenders have taken away all opportunities for producing income 
from thousands of builders and in turn, loaded the home market 
with thousands upon thousands of bank owned homes. As we are 
now well aware, the banks then unload the homes at a 
significantly depressed price, driving down the existing home 
    In closing, I would like to thank the committee for 
allowing me the opportunity to share my experiences today. I 
have done so in hopes that the citizens of this great Nation 
can gain an understanding that they are not alone in their 
frustrations with banks and lenders. I feel as many small 
businessmen and women and homeowners do that decades of hard 
work and dedication were erased by a few inconceivable 
decisions by single individuals.
    Thank you very much.
    Mr. Kucinich. Thank you, Mr. Betsill.
    The Chair recognizes Mr. Rossetti. You may proceed for 5 
    [The prepared statement of Mr. Betsill follows:]

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    Mr. Rossetti. Chairman Kucinich, Congressman Scott and my 
good friend Lynn Westmoreland, thank you very much. I 
appreciate the honor and the opportunity to testify before you 
on this very critical and tenuous subject. It is my opinion 
that the relationship between banks and all small business must 
be healthy for our company to begin to emerge from this 
economic hole we were in.
    I have been involved in the building business in some form 
or fashion since I was 12 years old. My father was a builder 
and it was he that gave me the insight and the training in this 
business. I am the president of Ravin Homes, Inc. and have been 
since its inception in 1982. There are 12 direct employees and 
hundreds of subcontractors that derive some or all of their 
livelihood from my company. In my 27 years of business, I can 
proudly say that I have never missed a payroll.
    As I am sure you are aware, the building business is a very 
capital intensive business and the banks play a pivotal role in 
a builder's production capabilities. Even the most well-heeled 
builders must go to a bank and get construction loans to 
supplement their cash-flow until the home is purchased. In the 
past, lenders of all sizes would loan money to my company and 
assist with my production. Through the years, I have enjoyed 
great relationship with virtually all of my lenders, both large 
and small. They have included Bank of America, Regions Bank and 
Wachovia on the large bank end of the spectrum as well as the 
Bank of Georgia, the Bank of North Georgia and Southern 
Community Bank on the small bank side. Up until this downturn, 
it was relatively easy to do business with all of them if your 
credit was satisfactory. Sadly, this is not the case now.
    In general, the small banks, those with less than a billion 
dollars in assets, in my area have issues with capital 
requirements that regulators have declared are inadequate. Mr. 
Brannen mentioned that in his testimony. Due to this, they are 
unable to lend money to me for construction. I have two pre-
sold homes that I have under construction in a Fayetteville 
subdivision that no one would lend me the money to build. I had 
to build them out of pocket. I have been to no less than eight 
banks in my quest to find financing and have not been 
successful. Virtually all of the small banks wanted to do the 
loans, however, due to regulatory risks, they could not.
    I must say that my relationship with the small banks is 
very positive concerning the existing loans that I have on 
their books. They are generally very cooperative with revising 
loan repayments to fit the current economic environment. Their 
attitude is that if there is any chance of their customer 
surviving this downturn, it is worthwhile to help them. Their 
attitude is closer to that of a partner rather than an 
adversary. This is not so with the big banks.
    Of the three largest banks I referenced, Wachovia is by far 
the best to deal with. And that is because I have a 
relationship with the lender, and have had it there for over 15 
years. He respects my judgment and I his. On the other side of 
the spectrum, Regions Bank and Bank of America have been 
extremely difficult to deal with. Their attitude has been when 
the loans are due, they want to be paid off, or they threaten 
to proceed with a collection action. The Bank of America has 
threatened to sweep proceeds of my sales closings to satisfy 
payments over and above a predetermined payoff, even though the 
loan is performing. I am paying the interest, it is up to date, 
they are billing me the interest. They want to sweep all my 
proceeds and put my company out of business. If they pursue 
this action, that is what it will do, put my company out of 
business. In this case, as with most large banks, I am dealing 
with someone I have never met working out of Tennessee who 
knows nothing of my past relationship with Bank of America or 
my reputation in the industry.
    This demonstrates an attitude that is all too prevalent in 
the large bank environment. It seems that the TARP money that 
they received has been used to shore up their capital position 
and made it easier for them to foreclose and liquidate troubled 
loans rather than working with the borrowers.
    Again, I would like to thank you for your time and look 
forward to answering any questions you may have.
    Mr. Kucinich. I thank the gentleman.
    Mr. Greenlee, you are recognized.
    [The prepared statement of Mr. Rossetti follows:]

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                  STATEMENT OF JON D. GREENLEE

    Mr. Greenlee. Chairman Kucinich, Congressman Westmoreland, 
Congressman Scott, I appreciate the opportunity to appear 
before you today to examine several issues related to the 
banking system.
    Although conditions in the financial markets have improved 
in recent months, significant stress persists and borrowing by 
businesses and households has remained weak.
    The condition of the banking system is far from robust, as 
the economic downturn, increases in unemployment and weaknesses 
in real estate markets has resulted in significant loan quality 
problems and losses in many banking organizations, many of whom 
are also challenged by subpar earnings and questions about 
capital adequacy.
    In Georgia, the performance of banking organizations has 
also deteriorated. Like their counterparts nationally, banks in 
Georgia have seen a steady rise in non-current loans and 
provisions for loan losses which have weighed on bank earnings 
and capital, and 25 banks have failed in the State since the 
turmoil in the financial markets emerged more than 2 years ago.
    Substantial financial challenges remain for banking 
institutions both in Georgia and across the United States. In 
particular, some banks that have built up unprecedented 
concentrations in commercial real estate loans will be 
particularly affected by strained conditions in real estate 
    From a supervisory perspective, the Federal Reserve has 
been focused on CRE exposures for some time. As economic 
conditions have deteriorated, we have devoted more resources to 
assessing the quality of CRE portfolios at institutions with 
large concentrations and have also significantly enhanced our 
system-wide training efforts.
    Last Friday, Federal and State banking regulatory agencies 
issued additional inter-agency guidance on CRE loan 
restructurings and workouts. The development of this guidance 
was led by the Federal Reserve and is designed to address 
concerns that examiners may not always take a balanced approach 
to assessments of CRE credit, particularly if banks were to 
restructure loans. This new guidance supports balanced and 
prudent decisionmaking with respect to loan restructuring and 
timely recognition of losses.
    At the same time, our examiners have observed incidents 
where banks have been close to acknowledging climbs in CRE 
project cash-flows and collateral values in their subsequent or 
potential loan reviews. As noted in the guidance, the 
expectation is that banks should restructure CRE loans in a 
prudent manner and not simply renew a loan in an effort to 
delay the loss recognition.
    Finally, the Federal Reserve announced that starting in 
June 2009, newly issued high-quality commercial mortgage bank 
securities would be eligible collateral under the TALF program, 
followed by a more recent announcement that high quality legacy 
CMBS issued before January 1, 2009 would be eligible collateral 
under TALF beginning in July. The provision of TALF financing 
for high quality issued CMBS is consistent with other Federal 
Reserve programs designed to improve credit markets and support 
new lending for credit worthy properties.
    In summary, it will take some time for the financial 
markets to fully recover. The Federal Reserve is committed to 
working with other banking agencies and the Congress to promote 
the concurrent goals of fostering credit availability in local 
communities across the country and promoting a safe and sound 
banking system.
    Accordingly, we thank the subcommittee for holding this 
important hearing and I look forward to your questions.
    [The prepared statement of Mr. Greenlee follows:]

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    Mr. Kucinich. I thank the gentleman. We are now going to go 
to questions of the witnesses and I am going to extend a 
courtesy to Mr. Westmoreland to lead off the questioning for 5 
    Mr. Westmoreland. Thank you. Mr. Greenlee, do you see--
since this hearing has been announced and even before that, I 
got calls from bankers, community bankers basically, that came 
to my office and said look, we need some help. You know, we 
have the Federal Reserve, the FDIC, telling us we need to get 
TARP money, we are right in the middle of capital raising, we 
applied for TARP and then got turned down, which killed our 
ability to raise capital. And the regulators are the ones that 
told us to apply for the TARP money.
    I mean, we are creating a snowball and I do not care if you 
talk to Mr. Rossetti, Mr. Betsill, Mr. Brannen, Mr. 
Schneggenburger, Ms. Redmond or whatever, we are creating a 
snowball with the TARP money. I mean, TARP was intended to free 
up credit. Credit has not been freed up. It was there to set a 
floor to these assets, there has been no floor set. It is being 
used by the big banks to take advantage of the smaller banks 
and individuals.
    Now the Federal Reserve needs to step in at some point and 
do something with this. I am very sorry that no one is here 
from the FDIC. Mr. Greenlee, do you see anything that the 
Federal Reserve can do to help these banks? The regulators that 
are coming into these community banks especially, they have no 
idea about community banking. I am saying none of them have 
ever been in community banking. And so we are in the process of 
snowballing the effect, the reverse effect, of what this TARP 
money was actually supposed to do. Is the Federal Reserve doing 
anything to free up credit?
    Mr. Greenlee. Thank you for your comments, Congressman 
    We have, over the past few years, have also heard concerns 
about what examiners are doing in the field and concerns about 
considering locality in our examination process in that 
examiners may not always be taking a fair and balanced approach 
to reviewing in particular commercial real estate loans. So we 
began an effort in early 2008 to strengthen and enhance our 
training for all our Federal Reserve examiners to make sure 
they understood what our guidance was, what our expectations 
were. In November 2008, we issued inter-agency guidance that 
encouraged banks to extend credit, make credit available for 
credit worthy borrowers and I think our last action consistent 
with that is the guidance we issued last Friday to try to 
address the concerns that we have heard that examiners may be 
going too far, not recognizing the borrower's ability to repay 
a particular loan. That is our longstanding policy and we 
thought it was an appropriate time to issue that guidance.
    Mr. Westmoreland. I hate to interrupt you, but you heard 
testimony from two people today that were current with their 
loan payments, they were not behind in their loan payments. But 
because of regulations where these banks were told--and Mr. 
Brannen testified to this--they were told to reduce the real 
estate portfolios. Then when the people that had the loans 
could not produce the additional equity, even though they were 
not behind in their loans, they became toxic assets and the 
snowball just rolled on down the hill. Have you all not seen 
    Mr. Greenlee. Well, it is difficult to, you know, go into 
each of these situations because I do not have all the facts in 
front of me on the particular situations. As I noticed----
    Mr. Westmoreland. Well, if you can just tell me what you 
are doing to free up credit. What is the Federal Reserve doing 
today to free up credit? And I know you probably do not have 
time today but if you could just send me a note and Mr. 
Kucinich a note, Mr. Scott a note and let me know what you are 
doing to free up credit, so we can tell some of these people 
that the Federal Reserve is actually doing something to try to 
free it up.
    Mr. Brannen, I want to mention to you some regulations. I 
know that capital that you used to have to have on hand used to 
be what, 6 percent? And it went to 12 percent?
    Mr. Brannen. It is according to what kind of capital you 
are talking about.
    Mr. Westmoreland. OK. I am talking about the money that you 
have to have in reserve.
    Mr. Brannen. Six and 10. It's tier one and tier two. My 
friend from the Fed can give you the exact numbers.
    Mr. Westmoreland. As to how much capital you have to have? 
They are making a lot of banks both increase the capital that 
they have----
    Mr. Brannen. That is correct.
    Mr. Westmoreland [continuing]. And reduce their real estate 
    Mr. Brannen. That is correct.
    Mr. Westmoreland. Is it not true that most banks do not 
make a lot of money off free checking?
    Mr. Brannen. No, sir.
    Mr. Westmoreland. And so, I mean, listen, I understand, but 
we have to have the credit market freed up. Would you not agree 
that has been the cause of some of these bank failures, is the 
fact that they were not--or they put so much pressure on some 
of their borrowers that they ended up losing them?
    Mr. Brannen. Absolutely. You are absolutely right. And both 
Mr. Betsill and Mr. Rossetti pointed out exactly the problems 
that you and I have talked about many, many times about how 
difficult it is. The banks are being told--it is numbers 
driven. If your asset concentration is more than what some 
number out of Washington says it is in real estate, then you 
have to get below that number.
    Mr. Westmoreland. Even if they are performing.
    Mr. Brannen. Even if they are performing numbers. And in a 
market like Georgia, fast-growing, positively growing State 
like our State, and you see those numbers--we have been above--
the average-numbers in Georgia have been above the guidance 
numbers for years. So now we are being told to forget those 
numbers, get back below what that guidance was. That guidance 
has now become hard fact and they are forcing the banks to 
reduce their concentration level. And this is the result. This 
is exactly the result. It is not what--I do not think the 
regulators mean for that to happen, but that is the result of 
    Mr. Westmoreland. OK, thank you, Mr. Chairman.
    Mr. Kucinich. I thank the gentleman.
    The Chair recognizes Mr. Scott for 5 minutes.
    Mr. Scott. Thank you very much.
    Mr. Greenlee, let me--each time that your boss has come 
before our Financial Services Committee, Chairman Bernanke, the 
question has been put to him by myself, why we cannot use TARP 
money to help these banks, the community banks. And each time, 
Mr. Geithner will come before our committee. Then before that, 
when we were putting the $700 billion package together the 
first time and I asked why can we not set 2 or 3 percent of 
this aside, of this TARP money, to help prevent home 
foreclosures and get money down so people can stay in their 
homes. Secretary Paulson at that time said we can only use this 
to buy troubled assets, we cannot use this for anything but buy 
toxic assets. And we left and went home that Friday. By Monday, 
when we got back, all of a sudden we could use that TARP money 
to bailout the automobile companies, to do other things and 
almost everything but buy toxic assets that the program was 
aimed at.
    So I would like for you to make sure that--we need help in 
getting money and capital down to these struggling community 
banks, especially here in Georgia. Georgia is the epicenter, 
the fact that we have 25 banks in Georgia to close in the last 
12 months is unacceptable and I want to enlist your help for 
this committee. You have heard Mr. Brannen, you have heard the 
committee and our sentiment. We need to get the TARP money. 
J.P. Morgan Chase, others are paying their TARP money back. 
They not only are paying it back, but they are paying with 
interest. Even if we could just say let us put the interest in 
a pool to get down to the community bankers. So I just want to 
stress to you that you will convey the sentiments of this 
hearing as well as the other things that Mr. Westmoreland asked 
for you to do in communicating with us, and see if we cannot 
get some benefit out of this hearing, that we can put some 
energy behind both the Fed and the Treasury to get on our side 
of getting some TARP down to the banks.
    Now Joe, Mr. Brannen--I am so used to talking to you that 
way--for some that may not know, this is my old Rules Committee 
chair, chaired the Rules Committee in the Senate, was in his 
office many times. You have heard some of the complaints here. 
Ms. Redmond gave a very touching--and we have had so many 
examples. What is your reaction to her testimony? I mean as the 
head of the banking association, I know you all do not get 
directly into it, but I would just like, because we are getting 
a lot of this kind of testimony and I just wanted to know your 
reaction to this. What do you say about her testimony?
    Mr. Brannen. If you would regulate companies like she 
talked about, those companies that are flying high with 
essentially no regulation.
    Mr. Scott. For the record, would you give the name of that 
company? I had never heard of it. What was the name of the 
    Ms. Redmond. Diversified Mortgage.
    Mr. Scott. What was Saxton?
    Ms. Redmond. Saxon Mortgage was the name.
    Mr. Scott. But they are no longer in business?
    Ms. Redmond. No, Saxon is still in business.
    Mr. Scott. OK, they are still in business.
    Ms. Redmond. Yes, that is the one I am with right now.
    Mr. Scott. Are you familiar with that, Mr. Brannen?
    Mr. Brannen. I have never heard of it; no, sir, I have not. 
Our view is if you would regulate those unregulated mortgage 
companies to the same extent you regulate the traditional 
commercial banks, then most of that would be solved. To hear 
those stories are just heart wrenching to know that here is 
someone who worked as hard as she worked on her own, did what 
she was supposed to do and be treated by an unregulated lender 
like she is, is just outrageous. We want her in our lobby and 
hopefully we can join the chairman in working with her.
    Mr. Scott. I want to get back also to your point, what is 
the breakdown----
    Mr. Kucinich. The gentleman's time has expired, but you can 
ask your question and Mr. Brannen can answer.
    Mr. Scott [continuing]. Of the three major barriers to 
getting TARP money, from your perspective? I know that many 
banks, several have called our office, they have been denied. 
What are the three barriers?
    Mr. Brannen. It was not transparent. We have no idea what 
the application process was and who would qualify. So some 
transparency from the Treasury Department on what it takes to 
qualify, so we would know who should apply for it.
    Second is the bar was set so high on what was in the bank's 
portfolios already, especially in the metropolitan Atlanta 
area, on real estate, they got disqualified immediately.
    And third, they were not allowed to count the investment 
after they got the TARP on whether or not they would be a 
viable institution. They said you are not viable now, so we are 
not going to give it. With that TARP, they would have been 
viable and some of those banks would be open today and some 
that are struggling will be open if we can get that.
    Mr. Scott. Thank you very much.
    Mr. Kucinich. I thank the gentleman for his questions.
    I want to start my 5 minute period. Mr. Greenlee, there has 
been a bit of attention paid today to credit that is too tight 
and bailouts for big banks. The Federal Reserve is now paying 
interest on excess required reserves and the Fed will pay 
interest on those reserves for many years into the future. Is 
that practice not going to be an ongoing subsidy to big banks? 
And how much is that subsidy going to be worth over the next 10 
years--$50 billion, $100 billion?
    Mr. Greenlee. I am not aware if there is a subsidy from 
that. There was a regulation passed to allow banks to earn, you 
know, interest paid by the Fed on excess reserves. That was, 
unfortunately, not something in my banking supervision role.
    Mr. Kucinich. I am going to read you something from a 
recent analysis of the role of the Fed in the financial 
collapse. This is from an article in the New York Review of 
Books, it is on the stands right now.
    ``In many cases, there were relevant regulations that might 
have been used and were disregarded. The Federal Reserve, for 
example, had the authority to investigate the risks posed by 
different kinds of mortgages. One of the Governors, Edward M. 
Gramlich, publicly urged such an inquiry in the early 2000's 
but Alan Greenspan, then chairman, rejected his advice. 
Commercial banks also had off-balance sheet subsidiaries, known 
as structured investment vehicles, that enabled them to invest 
aggressively with low levels of capital. The Fed could have 
investigated or more closely restricted these entities, but it 
did not.''
    Your comment, please.
    Mr. Greenlee. Mr. Chairman, we have studied these issues 
closely. We have enacted rules to address the unfair and 
deceptive practices and in terms of the off balance sheet 
entities, we have closely looked at those. Many of them have 
come back onto the banks' balance sheets. We have looked at how 
they have been structured. We are trying to think of what 
appropriate capital rules need to be going forward to adjust 
those kinds of things.
    Mr. Kucinich. One of the things that bothers me, with all 
due respect, is that right now the Fed is looking at trying to 
gain more oversight responsibility. There is legislation trying 
to make that happen. And even in your brief answer, what I did 
not see, I did not hear, was any accountability whatsoever. It 
is kind of mysterious how the Fed can simultaneously be an 
invisible hand and then when the hand goes in the wrong 
direction, that hand did not exist.
    So I just thought I would--this will be an ongoing 
discussion between me and the Fed, you can bet.
    I just want to conclude by asking Ms. Redmond, you are a 
college-educated woman who was talked into signing a mortgage 
loan document that you did not want and then affirmatively told 
by your mortgage lender to stop making your monthly payments.
    What advice would you give to others who are facing what 
you faced?
    Ms. Redmond. Just do not give up, keep calling, talking to 
different people to make sure you understand what exactly is 
being put in front of you. As I said before, I will never make 
this mistake again but just read everything. Hopefully, the RRC 
counseling will help individuals to kind of know what they are 
signing. I have done this like five times or six times with my 
previous house. You know, I have always trusted the mortgage 
company to do everything and never had no problem like this. 
But like I said, my case is clearly--I had a 3.7 LIBOR and it 
went to 7.3. If I saw the word LIBOR, I would not sign it. I 
did not hear that from them.
    Mr. Kucinich. I thank you very much for your testimony, as 
I thank all the witnesses here. We have concluded the testimony 
of the witnesses, but I am going to use my discretion as Chair 
to ask Mr. Westmoreland if he would like to make a brief 
closing statement. You may proceed right now.
    Mr. Westmoreland. Thank you, Mr. Chairman. Ms. Redmond, you 
are not by yourself, we hear cases like that every day and it 
is a real shame when people get to the closing table and the 
deal has been changed. And that is really against the law, we 
need to be doing more with that.
    Let me just say this, that, you know, a lot of people that 
are in our regulatory institutions in Washington, they need to 
get out more. They need to come walk around a town square and 
they need to walk through some of these neighborhoods and they 
need to talk to people and get some real life experiences about 
what is going on in the country.
    The other thing is that with the 100 banks that we have had 
fail in the United States, it has been projected that is going 
to cost us over $100 billion over 4 years--$100 billion. If we 
had taken and just given $20 million to each one of those 
failing banks, they would probably be in business today. So if 
we can take these regulators that go out and say we need to 
reduce your real estate portfolio by 25 percent, we need to up 
your capital by $5 million--if we could say, OK, you know what, 
we are going to give you that money, we are going to loan you 
that money and we are going to give you 18 months or 2 years to 
come out from this, they can gradually do it, rather than get 
this 90 day cease and desist, sell the stuff at a fire sale and 
cause everybody's property values to get hurt. I hope the 
Federal Reserve will look at something like that.
    Mr. Chairman, I think it has come to our attention today 
listening to some of the testimony that some of these 
regulations have been enforced when they want to be and how 
they want to be, with no consistency in how these regulations 
have been administered to these banks. It is picking and 
choosing, picking winners and losers and we have to stop that.
    And again, I want to thank all the witnesses, both panels, 
that were here to testify today. I hope that this is just not a 
hearing where we came to talk, but it is a hearing where we 
came to learn the facts and we can try to do some appropriate 
legislation to fix some of these problems that have been 
identified today.
    Again, Mr. Chairman, I want to thank you for your 
willingness to come to Atlanta and let us hold this hearing. So 
thank you.
    Mr. Kucinich. Thank you, Congressman Westmoreland.
    The Chair recognizes Congressman Scott for concluding 
    Mr. Scott. Thank you so much, Mr. Chairman. I want to thank 
you for hosting this hearing, it has been very informative, 
been very productive and I certainly appreciate your 
leadership, the leadership of my colleague from Georgia Mr. 
Westmoreland in this.
    Let me just say that as one serving on the Financial 
Services Committee, this has been extraordinarily enlightening 
for me. And we have two programs out working now, as I think 
everybody knows, we talked about, the Making Home Affordable 
Program that we have out to address the foreclosure situation. 
I have had some good feedback from that. We are going to get 
the recommendations that one of our earlier persons had. The 
Neighborhood Stabilization Program, which we already have money 
out that is working. So there are things out there that are 
working that we will get feedback on to see how we can improve. 
And I have asked them to send me those recommendations that I 
can take them up with Chairman Barney Frank as we submit those 
letters to him and to other colleagues.
    Mr. Brannen, I would like to ask the same thing of you, if 
you could get those points to me, because as my fellow 
committee members know, the Financial Services Committee is the 
committee that is handling so much of this and so it is very 
helpful to me, and that is why I doubly appreciate you letting 
me join you all. But if you could get that to me, I believe, 
and with your help, Mr. Greenlee, because that is going to be 
very helpful. We are going to have Chairman Bernanke to come 
back before the committee and then we can redress that, and I 
certainly hope that you will put a bug in his ear on that. And 
we will get those points if you will get those letters to me.
    So, Mr. Chairman, thank you so much. It has been very 
helpful and I appreciate it greatly.
    Mr. Kucinich. Thank you very much, Congressman Scott, and 
thank you, Congressman Westmoreland and the witnesses.
    We have heard from 14 witnesses today who represent every 
level of the community in Atlanta and have been involved in the 
commerce of the community, and who are trying to make sure that 
a system is created that can enable people to buy homes, have 
credit and enable businesses to stay alive without getting 
hammered by a financial system that suddenly turned against 
them when they in fact helped build that system.
    As chairman of this subcommittee, I am very concerned about 
what I have seen in that the instrument of government is being 
used to take the wealth of the nation, even the wealth of 
pretty good-sized banks, collapse it and just accelerate it 
upwards. Very dangerous for our democracy. Mr. Brannen, if you 
cannot keep your banks going in Georgia, there is something 
wrong. So we are all in it together and Ms. Redmond, if what 
happened to you happened to many others, and Mr. Westmoreland 
told me he has heard about 50 stories like that, and I have 
heard plenty of stories in my own area in Cleveland; it is just 
heartbreaking, it is chilling. But we also know that there is 
an arc of economic justice here that must be followed and if we 
are going to be worthy of the name of Members of the House of 
Representatives, we have to follow that arc in your behalf and 
behalf of those who are situated like you.
    I want to thank all those in the audience here today for 
their attention; the witnesses; and again, my colleagues and 
staff for helping to put this hearing together. Our 
subcommittee will continue to investigate this matter as to how 
it happened, but also we will be there with recommendations so 
we know that we can move toward a future which is fair and just 
and where we can get home ownership and home building going 
again in America.
    This committee stands adjourned.
    [Whereupon, at 2:24 p.m., the subcommittee was adjourned.]
    [Additional information submitted for the hearing record