The House Financial Services Committee passed on Wednesday the Protecting American Taxpayers and Homeowners Act, which is designed to end taxpayer-funded bailouts of the housing finance system and eliminates Fannie Mae and Freddie Mac over a five-year period.
“Today we passed legislation to make our housing markets healthy, stable, and strong,” Rep. Randy Neugebauer (R-Texas), the chairman of the housing and insurance subcommittee, said. “Reducing the government footprint in our mortgage industry not only gets taxpayers off the hook for costly bailouts, but it also provides families with more flexibility when they purchase a home. We had an open debate on the PATH Act, and I think we’ve developed a strong bill to bring to the full House for a vote. I’m looking forward to getting this signed into law so we can get our housing markets back on track.”
The PATH Act eliminates the government mortgage giants and replaces them with a new, non-profit National Mortgage Market Utility, which would be barred from issuing securities and would not receive any federal guarantees.
“The PATH Act helps taxpayers and homeowners,” HFSC Chairman Jeb Hensarling, the bill’s sponsor, said. “It gives power and control back to consumers. Under the current broken system, unaccountable Washington elites have more of a say over who gets a mortgage than your local bank. The current system is a government monopoly run by the same types of Washington bureaucrats who run the IRS. America can do better. Americans deserve better.”