Skip to main content

MBA's Courson: Negotiators need to regroup, find common ground on economic stabilization package

National Mortgage Professional
Sep 29, 2008

Opening statement of ranking member Spencer Bachus, full committee hearing entitled “The Future of Financial Services: Exploring Solutions for the Market Crisis”MortgagePress.comRep. Spencer Bachus, bailout, economy, housing market, Federal Reserve, Secretary of the Treasury, Henry Paulson, Ben Bernanke Over the past year, the U.S. financial system has been shaken to its very foundation by a financial contagion that has disrupted the orderly operation of our financial markets. We continue to see the consequences of years of overleveraging, risk taking, over extension of credit, and the failure of our rating agencies and others to properly assess risk. The combination of an outdated financial regulatory system and the regulators failure to exercise adequate oversight allowed these problems to fester, with disastrous consequences for our economy. To date, we have had a series of individual interventions by our regulators that have brought only short-term relief. It is obvious to most of us that a systematic approach to this problem is the only course of action that has any hope of being effective. Last weekend, the Chairman of the Federal Reserve and the Secretary of the Treasury brought us their proposal for this systematic approach. Since then we have become submerged in a mass of conflicting propositions and counter proposals submitted from all sides. We and the media have obsessively analyzed the details of each new idea. In so doing, we have lost sight of the fundamental issue: is a severe market cataclysm imminent and if so will the cost of that event be greater for average Americans than the cost of a systematic intervention? Secretary Paulson and Chairman Bernanke assert that analysts both inside the government and out confirm the belief that our markets are frozen by illiquid assets on the balance sheets of large and small financial institutions. There have been too many calls to my office making this point for me to doubt that this is correct. These illiquid assets are said to be causing financial institutions at all levels to conserve capital. As a result, the normal lending that allows our commercial activities to proceed in an orderly fashion has ground to a halt. The effect is a financial panic on our entire financial system much like a run on the bank and it is having the same destructive effect. The plan put forward last weekend was designed to address this fundamental key to the current crisis. We are faced with critical issues for which we have far too little information on which to base our decisions. That makes the decisions extremely difficult, but we cannot leave here for the rest of the year without reaching closure on this matter. We simply must decide. The first question is whether we believe there is a likely catastrophic market event in the offing if nothing is done? If there is, it could have enormous costs to Americans who have their life savings invested in pension funds and other savings. Main Street businesses might find themselves unable to access their ordinary sources of financial assets to buy materials and pay their employees. I am not worried about the Wall Street bankers who made millions creating this mess, but I feel a great obligation to the millions of Americans who did nothing to create this problem but might be its innocent victims. If we decide there is such an event, then will a $700 billion purchase of these assets provide the temporary relief the markets need to right themselves? If we provide this relief, whether it works or not, let everyone be assured this Committee will be exercising its oversight and investigation responsibilities as we go forward to see to it this can never happen again. My purpose today will be to listen and try to find answers to these questions. The witnesses have been through a lengthy and extensive hearing process this week and in the past few weeks. I appreciate them being here to help us find the answers we need. For more information, visit bachus.house.gov.
Published
Sep 29, 2008
400 Mortgage Loan Originators Caught Trying To Skip School

400 mortgage loan originators nationwide deceptively claimed to have completed their annual continuing education as required by state and federal law.

Industry News
Jan 19, 2022
Infamous Better.com CEO Is Back And Employees Are Upset

After a month-long hiatus or “break” as Garg likes to call it, the CEO is back at the helm of the company.

Industry News
Jan 19, 2022
Capacity Closes $38M In Series C Funding, Surpasses $62M In Total Capital Raised

AI-powered automation platform, Capacity, announced an additional $27 million in Series C funding, closing out the round at more than $38 million.

Tech
Jan 19, 2022
Millennials Are Still Powering The Housing Market

First American Financial Corporation's Potential Home Sales Model for Dec. 2021 revealed that millennial demand is propelling the housing market, thanks to low rates and increased geographic flexibility.

Analysis and Data
Jan 19, 2022
Open Mortgage Adds A Chief Revenue Officer

Scott Harkless will spearhead all wholesale and retail sales functions for the national multi-channel mortgage lender.

Industry News
Jan 19, 2022
Home Builder Confidence Dips Due To Inflation And Supply Chain Concerns

Home builder confidence in the market for newly built, single-family homes fell by one point to 83 in January 2022, according to the National Association of Home Builders and Wells Fargo's Housing Market Index report.

Construction
Jan 18, 2022