Jeb Hensarling’s PATH to Ending “Never Ending Cycle of Boom, Bust and Bailout”
“A never ending cycle of boom, bust, bailout.” That’s been the American people’s experience of the housing finance system for too long, according to Rep. Jeb Hensarling (R-TX) 83% who spoke at the Heritage Action Conservative Policy Summit earlier this month.
This may seem important only to taxpayers and homeowners, but we are all affected by this. Why? The Federal Housing Administration alone has been a recipient of a taxpayer-funded bailout that adds $1.7 billion to the debt, and the debt affects us all by weakening the economy.
For many, becoming a homeowner is part of the American Dream. It’s an exciting goal for which the current housing finance system creates huge barriers. Rep. Hensarling called the Dodd-Frank Act “the real threat to homeowners and financial institutions alike.” The Dodd-Frank financial law, a “regulatory boondoggle” passed in 2010, could cut the number of mortgages in half and double the cost of those that remain, Hensarling explained.
What’s his solution? The Protecting Taxpayers and Homeowners Act (PATH) (H.R. 2767) reforms the housing finance system and the Federal Housing Administration (FHA).
The bill will bring certainty and stability to homeowners, but all taxpayers should be eager for it’s passage too. It would phase out the troubled government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac taxpayers have already had to bail out to the tune of $200 billion. Taxpayers remain responsible for approximately $4 trillion in GSE guarantees.
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Rep. Jeb Hensarling: Fannie Mae, Freddie Mac Bailout is “The Mother of All Taxpayer Bailouts”