I opposed the $700 billion bailout legislation because it was inherently flawed and failed to adequately deal with the underlying problems that led to this alarming financial situation. The financial crisis and credit crunch has dominated the attention of Congress, the national media, and the American people. Recently, I got the opportunity to question the top executives of bankrupt Lehman Brothers and bailed out AIG at two hearings held by the House Committee on Oversight and Government Reform. These hearings offered Members of Congress an opportunity to question senior executives from the failed financial companies in order to begin the process of holding the right people accountable. We also recently learned that AIG, after accepting assistance from the federal government, convened lavish and expensive getaways for their top executives at taxpayer expense. This is outrageous and unacceptable. I am committed to holding these lenders accountable and to finding a solution that provides real help to both our economy and to American taxpayers.
The details of the financial bailout package that was passed by Congress and signed into law make these hearings particularly important. It is clear that congressional action is needed to correct the damage done to our markets and to protect American families and businesses. I believe that it is critically important to hold accountable those whose actions have imperiled our financial system and endangered millions of American homeowners. The bailout proposal failed in this respect and therefore leaves us vulnerable to this same situation in the future. The Oversight and Government Reform Committee hearings offered us an important opportunity to begin the process of accountability by getting information from the executives about their companies and lending practices.
These hearings helped to make clear that most of the home foreclosures in our country are not cases where people purposely bought homes they could not afford. According to the Miami Valley Fair Housing Agency, over 90% of the homes in our region that go into foreclosure are refinanced homes. In working neighborhoods throughout our community, and now throughout the country, homeowners were given loans for significantly more than the real value of the property. Many of these loan products featured a low introductory rate but then saw the payment amounts skyrocket to unaffordable prices later. These are people who fulfilled the American Dream of owning their own home and were participating in what they thought would be the most carefully regulated transaction of their lives. Unfortunately, in many cases the loan products they were sold were deliberately designed to fail. When the property moved into foreclosure, the value of the property would plummet and hurt property values for other homes in the surrounding neighborhood.
During the Committee hearing, I asked the executives if they were aware of these lending practices. I questioned whether or not they knew that loans were being given where the loan value exceeded the property value. If they issued securities based on that bad loan, without disclosing the gap in value, this could be a crime. I believe that these lenders who originated loans at a higher value were in fact stealing from the American people.
The state of Ohio has been particularly hard hit by the foreclosure crisis that has endangered our financial system. Communities in Southwest Ohio have some of the highest foreclosure rates in the nation. The bailout did not offer enough relief to impacted neighborhoods and homeowners. Those neighborhoods and families that have had their American dream taken from them by unscrupulous lenders deserve far better than they will receive under this legislation. I believe that much more thought and action is needed to address this crisis. As this moves forward, I will continue to examine the causes of the current financial situation and how companies like Lehman Brothers and AIG contributed to this national financial crisis.