ICYMI: Chairman Hensarling on Bloomberg’s Capitol GainsPosted by on July 22, 2013
“…if you don't get rid of the permanent, everyday government guarantee in the secondary mortgage market, I fear all you've done is put Fannie and Freddie in the Federal Witness Protection Program. Give them a facelift, give them new names, maybe they come out as Eddie and Annie. And yet they're released on an unsuspecting public.”
Hensarling on the PATH Act – Protecting American Taxpayers & Homeowners – and how it winds down Fannie Mae and Freddie Mac:
“Well, one, it doesn't get the government out of the housing business. What it does is, over a five-year transition period, it does get the government out of having a permanent presence in the secondary mortgage market. The truth is it hasn't worked out too well for us. Today, we have the federal government that is controlling virtually the entirety of our mortgage finance system. I don't think Americans want that to happen.”
“Today, Americans have had to pay over $187 billion to bail out Fannie and Freddie, institutions where everyone knows they manipulated their financial statements in order for their top executives to earn huge bonuses. Today, the American taxpayers are on the hook for over $5 trillion. The American people want out of the bailout business.”
Hensarling on opponents of the PATH Act and why housing finance reform is needed today:
“…these are the same people who also told us there was never a problem with Fannie and Freddie – ‘let's roll the dice’. And so on the one hand people said, well, you can't do anything five years ago because the housing market is too fragile. And now they say the housing market is coming back, why do you want to rock the boat?
“We want to rock the boat because we need a sustainable housing policy. Number one it has to be sustainable for homeowners. We've had federal policies that helped put people into homes they couldn't afford to keep. I mean it was tragic – all kinds of tragedy throughout our nation.”
Hensarling on how the Dodd-Frank Act will reduce homeownership:
“Under current law today CoreLogic has said 52 percent -- 52 percent -- of the Americans who bought homes in 2010 would not be allowed to finance under today's standards.
“Relative to current law, the PATH Act -- Protecting American Taxpayers and Homeowners -- is going to make homeownership more affordable. And it's going to give American home buyers options so that their federal government doesn't steer them into one product that may not be right for them.”
Hensarling on other housing reform proposals:
Under the PATH Act, “we have a counter cyclical provision in our bill, as well. The FHA is not going away. And so in times of economic stress you have the FHA that can ramp up, should we have another crisis like we've had in 2008.
“Dodd-Frank punted the ball. The administration has punted the ball, so I salute anybody who has a plan... but if you don't get rid of the permanent, everyday government guarantee in the secondary mortgage market, I fear all you've done is put Fannie and Freddie in the Federal Witness Protection Program. Give them a facelift, give them new names, maybe they come out as Eddie and Annie. And yet they're released on an unsuspecting public.”