Neugebauer Statement: Americans Deserve a Better Housing Finance Model
WASHINGTON, DC—Congressman Randy Neugebauer (R-TX) Chairman of the Financial Services Subcommittee on Housing and Insurance, gave the following statement at a hearing today on legislation he is cosponsoring to create a sustainable housing finance system.
“After twelve hearings and multiple conversations with stakeholders, we have put together a framework for a dynamic, healthy, and stable housing market. The PATH Act is a transformative piece of legislation that will bring our housing markets into the twenty-first century and allow our housing finance system to function without the unprecedented government intervention we have seen in recent years.
“The PATH Act will do three things: first, it will end the costly bailouts of Fannie and Freddie by phasing them out over a five year period; second, it will right-size FHA by clearly defining its mission to ensure that the Agency is focused on serving first-time homeowners and low-to-moderate-income borrowers; and lastly it will facilitate increased investor interest in the secondary mortgage market by removing impediments to private capital and defining a clear set of rules for private securitization.
“Now I know some of my colleagues would like to gloss over the rank cronyism, Enron-style accounting and outright financial fraud that allowed Fannie and Freddie to generate the subprime housing crisis. They would like to extol the virtues and benefits of the GSEs and propose to simply place a Band-Aid on our current government-centric housing system. But these calls remind me of a saying he have back in Texas: ‘You can put your boots in the oven, but that doesn’t make them biscuits.’ That basically means that you can say whatever you want about something, but that doesn’t change what it truly is.
“The truth is, our housing system is broken. Let me remind you exactly what that system delivered for the American people: $16 trillion in wealth destruction, which shattered dreams of early retirement for millions; countless boom and bust cycles that have wreaked havoc on the emotions of the American people; nearly $200 billion of taxpayer funded bailouts that plunged our nation further into debt; the bleeding of responsible middle-class homeowners who not only paid their own mortgage, but were forced to bail-out their less responsible neighbors; and all of this pain for a paltry homeownership rate that ranks 17th in the world.
“America can do better and Americans deserve better. They deserve a better housing finance model – one that is built to last and sustainable. Sustainable for homeowners so they can keep their homes; sustainable for taxpayers so they are never again asked to foot the bill for a multi-billion dollar Washington bailout; and sustainable for our nation’s economy so we avoid the boom and bust cycles that have hurt so many in the past. The PATH Act will do just that.
“I know it is human nature to be resistant to change and I get it. Change is difficult, but in the case of housing finance, not to change is fatal. I urge all of my colleagues to support the PATH Act so we can finally have a 21st century housing finance model that principally benefits taxpayers and homeowners.”