Legislation announced today by House Financial Services Committee Chairman Jeb Hensarling (R-TX) spells out a defined plan for reforming the Federal Housing Administration and “right-sizing” the agency which has of late dominated the U.S. housing market.
Among the plans for reform outlined in the Protecting American Taxpayers and Homeowners Act: ending the bailout of Fannie Me and Freddie Mac by phasing them out over five years; driving competition by ending the government’s majority participation in the housing finance system; and providing more consumer choice in mortgage products.
“House Republicans are committed to fixing the failed housing finance system that required the biggest taxpayer-funded bailout of all time – nearly $200 billion for Fannie Mae and Freddie Mac,” Chairman Hensarling said. “America needs a housing policy designed for homeowners and taxpayers—not for Wall Street and the housing industry.”
The bill announcement was met with support from republican members of Congress, but opposition from some policy experts, one of which called the plan a “sideshow.”
“Chairman Hensarling has released the ultimate right-wing wish list, turning the entire mortgage market over to Wall Street lock, stock, and barrel,” said Center for American Progress Director of Housing Finance and Policy Julia Gordon. “It’s a politically motivated sideshow that ignores the general consensus forming around the government’s role in a responsible market and threatens not only the nascent housing recovery but also prospects for overall economic growth.”
Written by Elizabeth Ecker