Members of congress and the housing industry voiced concerns regarding the Protecting American Taxpayers and Homeowners Act, or “PATH Act,” following its passage in the House of Representatives this week.
The bill passed by a narrow margin of three votes, announced Wednesday.
Yet the bill has been widely criticized among house democrats as well as housing industry members, vested in the change PATH outlines, which spells an overhaul of the housing finance system in the U.S.
“Housing finance reform is a serious undertaking and American taxpayers deserve a thoughtful, bipartisan approach to such an important issue,” said House Financial Services Committee Ranking Member Maxine Waters following the vote. “I am committed to working with all of my Democratic colleagues to preserve the 30-year fixed rate mortgage and support affordable rental housing. Whenever the Chairman is ready to take housing finance reform seriously, I am ready to work with him too.”
Industry members, including the National Association for Home Builders, have also expressed concerns about the legislation.
Upon its release, NAHB’s CEO testified the bill would diminish FHA’s mission.
“The PATH Act would drastically diminish FHA’s vital liquidity mission,” said NAHB CEO Jerry Howard. “By simultaneously leaving all federal support for housing to FHA, and then by greatly reducing the overall scope and reach of FHA’s programs, the PATH Act would greatly limit homeownership and rental housing opportunities for many financially responsible and qualified Americans.”
The American Bankers Association expressed mixed views, some in support of the legislation as well as some concerns. While change to the FHA is something the association supports, it stated in a memo to members, reducing insurance coverage as proposed by the bill could be problematic, the ABA said.
“We have concerns with Section 234 of the bill, which would reduce the mortgage insurance coverage provided by FHA to only 50 percent of the mortgage being insured. ABA continues to advocate for full coverage of the outstanding balances of loans insured under FHA.”
Written by Elizabeth Ecker