House Republicans Unveil Housing Reform Package

Congressman Lynn Westmoreland (R-GA-03) announced in his Capitol Corner newsletter about a new housing reform package.  Read about it below:

This month, Chairman Jeb Hensarling unveiled legislation that would reform our nation’s housing market.  The Protecting American Taxpayers and Homeowners (PATH) Act is much-needed reform that will help to stabilize the housing market and end the bailout of housing giants Fannie Mae and Freddie Mac over the next several years.

The government has deeply imbedded itself into our housing market – to the detriment of the American people.  Currently, American taxpayers are on the hook for $5.1 trillion in mortgage guarantees owned by government sponsored entities (GSE) Freddie Mac and Fannie Mae.  On top of that, the Federal Housing Authority (FHA) is on the verge of needing an estimated $1 billion bailout because it has drastically diverted from its original mission.

Between Freddie Mae, Fannie Mac, and the Federal Housing Authority (FHA), the federal government guarantees more than 85 percent of all mortgages and is responsible for more than 99 percent of all mortgage securitizations in 2012.  This has created a government monopoly that is bad for the housing market, bad for American taxpayers, and bad for those who currently own or want to purchase a home.

One aspect of the American Dream is homeownership, but right now the strangle-hold the federal government has on the housing market makes that dream much too hard to achieve.  That doesn’t just apply to you – it applies to your children and your children’s children down the road.  That’s why it’s so important that we reform our housing market now.  The American free enterprise system works, as long as the government lets it.

We must create a sustainable housing finance model that will last and that won’t put taxpayers’ on the hook for trillions of dollars.

And that is exactly what the PATH Act does.  It will end the costly bailouts of Fannie Mae and Freddie Mac – a bailout that has already cost the American taxpayers nearly $200 billion.  It will reform the FHA to limit taxpayers’ exposure and to ensure that the FHA returns to its original mission.  The FHA was created to serve specific people – first-time homebuyers and credit-worthy low and moderate income Americans.  However, today the FHA can insure loans that are as high as $729,750. This has led to FHA controlling more than 56 percent of the mortgage insurance market, crowding out private sector competition and creating the need for a taxpayer funded bailout.  The PATH Act will also reform and streamline the regulations governing the housing market now to make it easier for prospective homeowners to purchase a home by increasing competition and transparency.

And at the end of the day, this country cannot afford another housing market failure like we saw in 2008 and 2009.  As long as the government continues to control and dominate the housing finance market system, our economy remains at a risk of another meltdown.  I mean, can you imagine what would happen if Fannie Mae or Freddie Mac failed?  We are already more than $16 trillion in debt.  Where, exactly, would we get the money to pay the loans we have guaranteed for them?  More borrowed money from China, perhaps.  It’s just not a sustainable way to operate and we absolutely must fix it.

During the week of July 22nd, the House Financial Services Committee will hold a week-long markup of this legislation.  You can learn more about the legislation or tune in to watch the hearings live online by visiting the committee’s website at  This is a large, but extremely important reform package and I am proud to serve on the committee that drafted it.


  1. Dave Bearse says:

    I may be showing my ass, but credibility is damaged when Westmoreland’s letter twice refers to the Federal Housing Authority instead of Administration.

  2. elfiii says:

    “The FHA was created to serve specific people – first-time homebuyers and credit-worthy low and moderate income Americans.”

    “Credit-worthy” being the operative term here.

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