Congressman McCaul Votes Against Housing Bill that's Bad for the Economy, Rewards Irresponsible Borrowers

Mar 5, 2009
Press Release

AUSTIN – Congressman Michael McCaul (R-TX 10) voted against a housing and foreclosure bill that will extend help to irresponsible borrowers, but at the same time inject more uncertainty into the economy by contracting the credit market.

The bill would allow judges to lower the total amount of the loan, the payments and the interest that a borrower must pay a creditor. This practice, known as a "cramdown", would be allowed on principal residences. It is currently not allowed under Chapter 13 of the bankruptcy code.

"I opposed H.R. 1106, because the cramdown provisions of this bill will increase lender uncertainty at a time when the markets need certainty and stability, causing credit to tighten even more," said Rep. McCaul. "It rewards irresponsible buyers at the expense of future home buyers who will face higher interest rates and down payment requirements as a result."

Congressman McCaul supports the Fairness in Housing Recovery Act. It provides incentives for borrowers and lenders to jointly renegotiate payments and interest rates, supports going after predatory lenders, and protects taxpayers from being responsible for paying off the debts of irresponsible borrowers.