The United States Congress is making an attempt to repair a perceived broken housing finance system. Members of the House of Representatives are preparing a revised version of the Protecting American Taxpayers and Homeowners (PATH) act. The revisions would end the federal bailout of GSEs Fannie Mae and Freddie Mac. The revisions would “increase competition in the housing finance market, and offer consumers more choices when shopping for mortgages,” say advocates. Jeb Hensarling (R-TX), chairman of the House Financial Services Committee, has come out strongly in favor of PATH, emphasizing that “the Obama administration has had five years and has failed to offer any plan [to resolve the GSE conundrum and bailout] at all.” He added, “It’s time for action”.
The Financial Services Committee recently held a hearing on this measure. The bill is widely supported by Republican members of the house. However, there are not as many supporters on the Democratic side of the aisle. The bill includes provisions to protect credit unions from rulings on mortgage-related issues from the Consumer Financial Protection Bureau (CFPB). Accordingly, PATH also enjoys support from the National Association of Federal Credit Unions (NAFCU). NAFCU has been fighting CFPB rulings on how credit unions issue mortgages for months now, saying that the restrictions imposed on mega-banks should not apply to small credit unions that do not tend to sell their mortgage loans. Many credit unions remain in business by making highly specific, carefully tailored loans on an individual basis rather than based on national standards. Critics of the bill like Maxine Waters (D-CA), argue that the bill puts “future generations of homeowners at risk” by eliminating the 30-year fixed-rate mortgage. Waters added that “I am strongly disappointed in the Chairman’s legislation” and said that PATH is “by no means a bipartisan bill.”
Good or bad?? Who knows?? At least there is recognition that the current system is broken!!!
Paddy Deighan J.D. Ph.D
Comments(1)