House Financial Services Committee chairman Jeb Hensarling, R-Texas, is preparing to bring his housing finance reform bill to the House floor for a vote this fall.
“The House majority leader is anxious to bring the PATH Act to the floor,” Hensarling said Monday at a Bipartisan Policy Center Housing Commission forum in Dallas.
The Protecting American Taxpayers and Homeowners Act would wind down Fannie Mae and Freddie Mac and leave the financing of conventional mortgages to private investors and lenders with no government backing or guarantees.
“We are speaking to many people now about some revisions and improvements that can be made to the
The Texas congressman said he is encouraged by President Obama’s decision to back housing reform that winds down the GSEs over five to seven years.
He’s also encouraged by a bipartisan group of senators, led by Sens. Bob Corker, R-Tenn., and Mark Warren, D-Va., that have drafted a GSE reform bill. “I salute anyone who works hard and produces not just rhetoric but an actual plan,” Hensarling said.
But he remains skeptical about the core section of the Corker-Warren bill that would create a new federal mortgage insurance agency that could cover catastrophic losses—once the private investors are wiped out.
“If there is one thing we’ve learned about government insurance funds, it’s that the government cannot or will not properly price for risk,” Hensarling said. There are numerous examples of mispricing where the “government has flat gotten it wrong—leaving the taxpayers on the hook.”
Nevertheless, the committee chairman recognizes the differences between the House and Senate approach. And he said he would welcome a House-Senate conference committee to iron out the differences. “I wish to get the PATH Act to a conference committee,” Hensarling said.
