January 29, 1986 EXTENSIONS OF REMARKS 991 EXTENSIONS OF REMARKS A COURAGEOUS CALL FOR that at all. I don't feel the need for divine portfolio. We issued $24 billion of Mortgage­ ACTION TO STOP THE ANTI­ intervention to get out of here alive. If I did, Backed Securities. That $45 billion trans­ HOUSING ELITISTS I'd have a long and very uncomfortable lates into more than 900,000 home mort­ wait. gages for Americans in 1985 alone. We will No, my friends, I feel more like Joshua be just as aggressive in the marketplace in HON. FERNAND J. ST GERMAIN than Daniel this morning. In the words of 1986. OF RHODE ISLAND the spiritual, I want to command the chil­ We will be equally conscious of quality. IN THE HOUSE OF REPRESENTATIVES dren to shout and bring tumbling down the We intend to stick to the basic changes we walls of those in Washington, who would, if made last year in ·our underwriting stand­ Wednesday, January 29, 1986 we let them, destroy every vestige of sup­ ards and mortgage credit criteria, because Mr. ST GERMAIN. Mr. Speaker, housing port for the American dream of homeowner­ we believe they are right. We did not make programs are under the most concerted ship. those changes because of the foreclosure attack since the Federal Government accept­ I want to make sure you leave here know­ losses from loans made in the recession of ing what these elitists have in mind. Make 1981-82. That cat is out of the bag. We have ed a role in helping to provide decent shelter no mistake about it, they are cold-bloodedly learned to live with all the unwanted kittens for all Americans. determined to drive the American home she has produced. And that's a lot of un­ With these programs under siege and with buyer into a ruinous competition for mort­ wanted kittens. Rather, we made our under­ the very future of housing and community de­ gage money with Wall Street merger mani­ writing changes for two fundamental rea­ velopment at risk, it is vital that people knowl­ acs and the tentacled, multinational octupi sons: edgeable about the Nation's needs in this of the world. They will succeed-if we do First: The current economic evironment is area speak up. not have the courage and determination to radically different from the 1970's. Housing That is why, Mr. Speaker, I was so im­ stop them. price inflation will no longer make up for Now, let me observe right up front that underwriting mistakes. It would be fool­ pressed by the gutsy remarks delivered by these are not issues affecting the federal hardy for us to do business as if nothing David 0. Maxwell, Chairman and Chief Execu­ budget deficit. The attack to which I refer is had changed. tive Officer of the Federal National Mortgage on the public-private partnership in support Second: Our experience clearly shows that Association [Fannie Mae] to the board of di­ of housing that doesn't cost the taxpayers certain loan products and features lead with rectors of the National Association of Home of this nation a penny. The attack is moti­ near certainty to foreclosure for many bor­ Builders in Dallas on January 18. vated solely by an ideological hostility to rowers. It would be irresponsible for us to Citing some of the outlandish proposals for governmental support of any kind-on or continue to offer those products and fea­ cutting housing programs, the Fannie Mae off the budget-to give the low-, moderate­ tures. and middle-income home buyers of this To continue to accept high levels of fore­ chief lays it on the line in very clear language: country a chance to compete for capital. closures from loans we're making now could What the elitists seek to do is to put into These people are cleverly disguising their undermine the integrity of the home mort­ law their antihousing bias under the cover attack by wrapping it in the flag of deficit gage as a sound investment. Investors with­ of the deficit reduction package. That way, reduction-a national priority we all sup­ out faith in the underlying quality of their they can avoid careful consideration of port. By using such camouflage, they do the investment would not continue to invest. these radical changes in housing policy in President a great disservice. Our industry would soon have trouble rais­ open forums established for this purpose, I've never heard President Reagan say he ing the capital to finance future housing such as the Senate and House banking com­ wanted to tear down all the supports that needs. So our changes were an important mittees. have made us a nation of homeowners. I've step to maintain investors' faith in the Mr. Maxwell went on to tell the NAHB: never heard him advocate destruction of in­ home mortgage. As keepers of the American housing stitutions that help low- and moderate­ Mixed with our business decision to make dream, we together must stop the ideologi­ income Americans buy homes without a the changes was an overriding moral con­ cal assault on homeownership. The halls of penny's cost to the taxpayers. But that's cern. Our industry doesn't want to see Congress should rock with our protest on what they would like to accomplish. people buy homes they can't keep. Owning behalf of half a century of bringing home­ I don't have to tell you Fannie Mae is a a home should be an experience to treasure, major target of the conspiracy in Washing­ not regret. It is better for a family to post­ ownership to Americans. ton against home buyers of modest means. pone the purchase of a home until they can Mr. Speaker, I place in the RECORD the text But I should tell you, as good friends, how meet the monthly payments. It is better for of Mr. Maxwell's remarks in Dallas and com­ disheartening this assault is to us. We have a family to lower their expectations of how mend them to anyone truly interested in pre­ worked for five years to turn our company much house they can afford than to get in serving the Nation's commitment to decent around. We have not burdened the Adminis­ over their heads. It is better for a family to housing for all Americans: tration, or the American people, with the forego purchase of a home than to go need for some kind of expensive bail-out. through the agony of foreclosure. THE ATTACK ON MRS. BAKER'S HOUSING Our turnaround strategy is well on the What has been the reaction to our under­ DREAM road to success. From a company that was writing changes? Generally speaking, highly <Remarks by David 0. Maxwell, Chairman losing $1 million every working day in 1981, favorable. Naturally we could not fully sat­ and Chief Executive Officer, the Federal we have earned a solid profit in 1985. And isfy every player in the marketplace and National Mortgage Association) we look to the future with optimism. still effectively reduce credit risk. At the It feels mighty good to get out of that I know this achievement is of special in­ same time, we realize that no such changes stewpot called Washington to visit with terest to you because we have weathered are perfect. So, we continue to monitor friends. the hard times of the 1980s together. I will them in response to customers' concerns. Yes, America's home builders and Fannie always be proud that so many home build­ Where we can respond to those concerns Mae are good friends. Through good times ers told us after the recession of 1981-82 without reopening the door to undue expo­ and bad, we have stood up for each other. that without Fannie Mae they would not sure to credit risk, we will do so. The result has been a standard of homeown­ have made it through. My friends, without I want to thank John Koelemij and Kent ership in America that is the envy of the you, we would not have made it through Colton for presenting NAHB's own reserva­ world. either. tions and suggestions to us candidly and Like all good friends, we don't always And now that Fannie Mae is back on her forcefully. In our several meetings with agree completely on every issue. In fact, a feet, you can be certain she'll always be John and Kent, we reviewed the underwrit­ lender friend of mine said to me that other there when you need her. ing rules and their effects in great detail. As day: "Your new underwriting standards Obviously someone needed us in 1985. Our a result, effective immediately, we are must make speaking at the NAHB like business volumes set a record for us. We making several refinements in our new Daniel in the lion's den." I don't believe purchased $21 billion of mortgages for our rules. I appreciate the opportunity to make e This "bullet" symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor. 71-059 0-87-32 (Pt. 1) , 992 EXTENSIONS OF REMARKS January 29, 1986 the first public announcement of these re­ Although their final 1987 budget propos­ I would wager that none of them would be finements here at the NAHB's Board meet­ als have not been formally released, it's well moved by a passage from Russell Baker's ing today.