Making our Housing Markets Work for Homebuyers
Did you know that taxpayers guarantee nine out of every ten new mortgages in our country? Look around any new neighborhoods being built nearby. Most likely, only one or two of the mortgages on houses on that block are not guaranteed by the federal government. That’s problematic for a number of reasons.
First, that much government involvement crowds out private sector participation in the market. That means fewer choices for you when it comes time to buy a home and get a mortgage. Second, when the government is the driving force behind the housing sector, rather than the free market, it allows bureaucrats to pick winners and losers in our housing markets. Finally, it means that taxpayers are exposed to trillions of dollars in risk. Taxpayers have already spent $200 billion to bail out Fannie Mae and Freddie Mac, which were at the center of the financial crisis. Currently, the Federal Housing Administration (FHA) has a value of negative $16 billion, which is paving the way for yet another taxpayer-funded bailout. Americans deserve a better housing finance model – one that’s built to last and is sustainable for homeowners and taxpayers over the long run.
I’ve helped put together a bill to fix this broken system and make it work for homeowners once again. The Protecting American Taxpayers and Homeowners (PATH) Act will ensure our housing markets are healthy, strong, and stable. We’ll phase out Fannie and Freddie over five years and require FHA to use sound business practices and scale back to its original mission of helping first-time and low-income homebuyers. The PATH Act increases competition, enhances transparency, and maximizes consumer choice.
Over the next few weeks, we’ll be refining this legislation to help protect taxpayers and homebuyers. You can learn more at the Financial Services Committee.