The Protecting American Taxpayers and Homeowners Act, or “PATH Act,” for short, passed through the House Financial Services Committee today by a marginal vote, advancing the legislation that aims to implement major housing reform.
Targeted toward reforming Fannie Mae and Freddie Mac as well as the Federal Housing Administration including a repeal of the Home Equity Conversion Mortgage (HECM) program, the legislation has been met with opposition following its introduction last week.
Yet it received the vote to move forward through the House Financial Services Committee this week following a markup of the bill, with house republicans touting its efforts.
“The PATH Act creates a housing finance system that’s designed for homeowners so every American who works hard and plays by the rules can have opportunities and choices to buy homes they can afford to keep. It creates a housing finance system that’s designed for hardworking taxpayers so they never again have to bail out corrupt financial government enterprises like Fannie Mae and Freddie Mac, whose top executives engaged in accounting shenanigans to trigger huge bonuses for themselves,” said Chairman Jeb Hensarling (R-TX). “With the reforms in the PATH Act, Americans will finally have a housing finance system that is worthy of them.”
In a hearing last week, housing experts raised concerns about the legislation, including its efforts to phase out Fannie and Freddie and instead rely on the private market. That effort would lead to a transitioning away from the traditional 30-year fixed-rate mortgage, witnesses said.
“The vision in the PATH of the private mortgage finance system is not viable,” said Mark Zandi, chief economist for Moody’s Analytics following the introduction of the bill.
Written by Elizabeth Ecker