New Direction for Energy Independence, National Security, and Consumer Protection Act and the Renewable Energy and Energy Conservation Tax Act of 2007 -- Continued

Floor Speech

NEW DIRECTION FOR ENERGY INDEPENDENCE, NATIONAL SECURITY, AND CONSUMER PROTECTION ACT AND THE RENEWABLE ENERGY AND ENERGY CONSERVATION TAX ACT OF 2007--Continued -- (Senate - April 08, 2008)

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Mr. CASEY. Madam President, I rise to speak about a housing matter. I have two amendments, but I am only speaking about them today, I will not be calling them up. I did want to speak very briefly and very generally about both of them.

There are two very important matters that come before us as parts of our debate on housing. The first involves appraisals. We know that one of the biggest concerns a lot of people have in attacking the problem of subprime mortgages and the aftermath of a lot of bad loans was that faulty and sometimes fraudulent appraisals were part of that. The first amendment I will speak of today deals with the question of how do we get a second independent appraisal for properties that are so-called flipped properties.

When you have a property that may go into foreclosure and then it is sold later, sometimes we have instances where property is sold at a grossly inflated price that does not reflect the true value, and then down the road another purchaser, a homeowner, would buy it, and then you have extraordinary inflation, often fraudulent inflation of the cost of a property. Our office has worked closely with Senator Martinez on this as well. What this amendment does is to make it very clear that, in those instances where you have a house flipped within 180 days of the date of purchase, there will, in fact, be a second independent appraisal done.

Some of the work on this in the other body has been done by Representative Paul Kanjorski. He has worked on these issues for years. I commend him for his work in Congress on these and other matters that pertain to housing and to the financial questions that arise with regard to affordable housing.

First of all, we want to make sure, in those instances that a second independent appraisal is done, it would have to be by a qualified appraiser. That would mean the appraiser has to be certified in the State or somehow licensed in the State. And second, that the appraisal is performed in conformity with uniform standards of professional appraisal practice to make sure it is done the right way. We want to make sure consumers are given a copy of that appraisal, that it is done thoroughly, and that a statement is made by the creditor that any appraisal prepared for the mortgage is for the sole use of the creditor and that the consumers may choose to have a separate appraisal conducted at their own expense.

There will be heavy penalties imposed for those who violate this. It is one way to deal with one of the various problems we encounter when it comes to the difficulties so many families are confronting right now. The worst thing that can happen to a homeowner who saves money and borrows money to fulfill a dream of owning a home is to be presented with a situation where they buy a home that has been grossly and fraudulently inflated beyond its value and they don't find out about that until those who perpetrated the fraud are far away and have already made their money. This will hold people in the market accountable, as they should be held accountable.

We will have more time to talk about it later.

I want to make another point about a separate amendment. In the city of Philadelphia, as in many of our major urban areas, housing is a terribly difficult challenge for so many people. In the city of Philadelphia, we have more than 80,000--as HUD, Housing and Urban Development, officials would call them, clients--more than 80,000 clients in the city of Philadelphia who rely on HUD and the housing authority there to provide affordable housing in that city.

A dispute has arisen about a number of things. We don't have to go into the reasons for those disputes, but because of that dispute, now there is an agreement that was worked out between HUD and the housing authority called the Moving to Work Agreement which has allowed people not just to have the benefit of an agreement that provides them with the opportunity to live in housing that is safe and affordable, but also this agreement has allowed the Philadelphia Housing Authority to use the leverage of this agreement to borrow money and to finance other housing priorities in the city of Philadelphia.

Because of that, because of the importance of that agreement, we want to make sure the agreement stays in place at least for a year. That is what the amendment Senator Specter and I have been working on does. That is the reason for it, to give a 1-year extension so that the Moving to Work Agreement in the city of Philadelphia, with the U.S. Housing and Urban Development agency, stays in place for 1 year so we can continue to work out an arrangement between the housing authority and HUD.

Unfortunately, we have not been successful in working for many months on this. But I think it is critically important not to allow a bureaucratic fight between a housing authority and a Federal agency to interfere with important services that are provided to Philadelphians who benefit from this; some more than 80,000 Philadelphians.

Those are the two amendments I wish to speak about. We will have time later as we proceed to deal with them more directly. I wished to make sure we make both thorough and accurate and independent appraisals a priority as well as to make sure that when we are dealing with a local housing authority, we do not let a dispute prevent Philadelphians from getting the benefit of the services provided in this case by the Moving to Work Agreement.

I yield the floor, and I suggest the absence of a quorum.

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