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HFSC committee members introduce PATH Act to reform housing finance market

170px-Seal_of_the_United_States_House_of_Representatives.svgMembers of the House Financial Services Committee announced legislation on Thursday that is designed to end taxpayer-funded bailouts of federal mortgage giants Fannie Mae and Freddie Mac and increase competition in the housing finance market.

The Protecting American Taxpayers and Homeowners Act also phases out Fannie and Freddie over five years and gives consumers additional choices in deciding which mortgage product suits their needs.

The committee has held 11 hearings and listened to testimony from 41 witnesses on the inefficiencies and failures of the housing finance system. Many of the witnesses noted that the housing crisis and financial crisis of 2008 began with Fannie and Freddie.

“After multiple hearings and conversations with stakeholders, the committee has created a framework for a dynamic, healthy, and stable housing market,” Rep. Randy Neugebauer (R-Texas), the chairman of the housing and insurance subcommittee, said. “Our proposals would allow the housing finance market to function without the unprecedented government intervention we have seen in recent years. We’ll also reduce the probability of the boom and bust cycles that have hurt our economy and American families. The result will be a sustainable housing finance system that will benefit homeowners, taxpayers, and investors.”

The committee plans to meet on Thursday to hold a hearing on the PATH Act.

“Ours is an ambitious vision and a real plan to reform and fix a broken, failed system,” Rep. Jeb Hensarling (R-Texas), the committee chairman, said. “The Obama administration has had five years and has failed to offer any plan at all. It’s time for action.”