"A Secure Foundation for the Future"


Thank you, Gray [Mayes], for that kind introduction...

We meet during a momentous week in American history. On Tuesday, we remembered the sixth anniversary of the 9-11 attacks and their victims. Today is the 195th anniversary of the Star-Spangled Banner. It was written during the War of 1812, another attack on our great nation.

Together, these events remind us that we are the "land of the free" because we are the "home of the brave." It's the men and women in uniform who keep us safe and free. Let's have a round of applause for our troops and our veterans.

I want to thank the Dallas Friday Group for inviting me. Some of you are old friends. All of you are doing great things for the economy and the community.

A wise man, Roger Staubach, once said: "If you have the right people in the right places doing the right things, you can be successful at whatever you do." He could have been describing the people in this room.

I might add, it's always good to come home.

Growing up in Dallas, my mother and father taught me the value of hard work-and the importance of good values.

I grew up in a time of segregation. But my father was active in the Dallas NAACP and in the community. He taught me to stand up for what I believe in, when it matters most.

It made a difference when I decided to march on Bloody Sunday in Selma, Alabama. I still have a scar on my leg from a police dog bite. Perhaps it was the foolish bravery of youth. But a dog bite on my leg couldn't stop me from standing up!

Or, take the example of a young, freshman Congressman from Texas named George Bush. In 1968, he voted for the Fair Housing Act when others told him it would be career suicide. He was right; they were wrong.

We have a responsibility to stand up for others. That means fighting to open the doors of opportunity and ensure a level playing field. And yes, government has an important role to play.

I am proud of our record at HUD on fair housing. We investigate more than 10,000 housing discrimination complaints a year. About three-fourths of them are solved and closed within 100 days. And we've made it a national priority to increase the number of minority homeowners.

Last month in Memphis, I had the privilege of visiting Bobbie Wallace, a former public housing resident who now lives in a home of her own, just steps from the hospital where she works.

I wish you could've seen the look on her face! She calls homeownership a "blessing." It is.

Bobbie had a little help from HUD-mortgage assistance under our HOPE VI program. At HUD, we are breaking the obsolete mold of concentrating poverty in one area and wealth in another. This is good for families and communities.

It's also good for business. Economic development must always be a priority, never an afterthought. A community thrives when it employs people and provides goods and services.

I learned that lesson at the Dallas Housing Authority. And it's just as true today.

Homeownership remains the American Dream. And it's a Dream that's being realized. Today, about 69 percent of Americans own a home, a near-record.

Let's remember that good values are the foundation of homeownership. Hard work. Thrift. Living within your means. Putting the children's needs first. These are the values that sustain a community, a family and a country.

My father worked at a lead smelter in West Dallas by day. By night he cleaned buildings. I got up every morning at 5 a.m. to eat breakfast with him.

He set a great example for his children. And that stayed with me into adulthood.

Most Americans today have incomes that my father couldn't dream of. But many find themselves saddled with debt and bad credit. However it happened, it has led to bad choices for some. Such as following the siren song of exotic, subprime mortgages.

They're attractive at first glance, with low "teaser" interest rates or "piggyback" downpayment loans. But they have a catch.

You may remember the old commercial: "You can pay me now, or you can pay me later!" Well, a lot of families with adjustable rate mortgages are learning that lesson the hard way. For them, the American Dream has become a rude awakening.

Two years ago, we warned of the dangers of unsafe, risky mortgages. But many investors underestimated the problem. Now, some predict home sales will fall to a five-year-low.

The ripple effects have been felt from the offices of Countrywide to the cash registers of Home Depot. Some of you have felt them, too.

This is not to exaggerate the problem. Newsweek recently painted a picture of near-ghost towns with new phone books rotting in front of vacant homes.

Let's be clear. Subprimes make up only about 15 percent of loans. And 80 percent of subprimes are sound. But we should not minimize the problem, either.

The question is, does government have a role to play? Should it help people escape their jam?

The President and I believe the answer is a qualified "yes"-as long as we reward those sound, fundamental values of hard work, thrift, and savings.

Two weeks ago, I joined with the President to announce the FHASecure plan.

It's a new product in HUD's Federal Housing Administration, which insures low-cost, low-risk home mortgages-but which saw its market share drop during the subprime boom.

Under FHASecure, eligible homeowners will, for the first time, be allowed to refinance their existing mortgage, even if they are delinquent.

With other FHA-backed loans, it will help an estimated quarter of a million Americans over the next two years keep their homes.

It will also bring much-needed stability to the housing marketplace, without saddling the taxpayer with extra costs.

FHASecure will reward hard work and responsibility. Let me tell you how.

Only families with a history of on-time mortgage payments under the initial interest rates would qualify. They must have a good debt-to-income ratio, and a stable employment history. Finally, their delinquency must be the result of the reset rate, not bad investments. This is good policy.

We're making another important change. Currently, FHA charges all borrowers the same premiums. This makes little sense.

Starting in January, our proposal would peg mortgage insurance premiums to different levels of risk. This will reflect marketplace realities, and will help us break the cycle of foreclosure and depreciation.

The FHA has helped 35 million Americans buy a home. It has a good track record. But the program is 73 years old, and needs reform. We need Congress to raise the FHA's loan limit so that it is no longer priced out of the market, as it was during the subprime bubble.

The reaction to our plans has been positive. Wall Street rallied. The National Association of Realtors said the plans will "help many more families in jeopardy of losing their home."

The Dallas Morning News quoted an economist who said Texas has "a lot of housing in the price range that FHA typically works in."

And the Baltimore Sun wrote, "The Bush proposals won't bail anyone out of his or her problems, but they will help thousands of homeowners help themselves."

One way homeowners can help themselves is by becoming financially literate. Americans spend $55 billion on closing costs that many of them don't fully read or fully understand.

That's why President Bush has made financial literacy a top priority. We want people to be able to read and understand the fine print of a housing contract-and to spot the telltale signs of predatory lending.

The President's Council on Financial Literacy, announced earlier this month, will bring the best minds together from government and the private sector in a nationwide effort to educate homeowners.

And we've increased funding for housing counseling by more than 200 percent since 2001.

Why are we doing all this? Because we value homeownership. It creates jobs, strengthens communities, and protects families from life's setbacks.

It also builds wealth and helps the economy. American home equity has grown from $6.6 trillion in 2000 to $10.9 trillion in 2006-a 60 percent increase!

Homeownership is a vital part of the "Ownership Society" that we envision for America.

But while we value homeownership, we must never forget the values that make homeownership possible.

You embody those values. Your success, as community and business leaders, did not occur overnight. It took hard work, self-sacrifice, and discipline. And perhaps a few brushes with failure along the way.

But you've shown that opportunity is there for the taking. And you've shown that when one person achieves their goals, it benefits so many others.

I believe that, with good habits, sound financial planning, and awareness, many more Americans can achieve the Dream and own a home of their own. And that will benefit us all.

Thank you. And I'll be happy to take questions.

Content Archived: December 27, 2011