• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Hensarling at Policy Summit: Window Closing on Housing Finance Reform

    Heritage Action Conservative Policy Summit / K. Harris

    Heritage Action Conservative Policy Summit / K. Harris

    Congress ought to reform the nation’s housing finance system before a favorable opportunity closes in the next few months, Rep. Jeb Hensarling (R-TX) said today in a discussion of  approaches, including his own PATH Act.

    The time is ripe to change “this unsustainable, unconscionable, and unfair system” by ushering in privately financed housing and phasing out Fannie Mae and Freddie Mac over five to seven years while “right-sizing” the Federal Housing Administration (FHA), Hensarling said at the all-day Conservative Policy Summit convened at The Heritage Foundation by its political action arm, Heritage Action for America.

    “If this doesn’t get done in the next several months’ the window will probably pass,” at least in this Congress, Hensarling said.

    Like Heritage researchers, he concluded that eliminating the government-sponsored enterprises (GSEs) known as Fannie and Freddie —and their guarantees—would have little adverse effect on the overall economy and in fact likely would improve it

    “We all know that affordable housing is not spelled G-S-E but J-O-B,” Hensarling said.

    The alternative vision of the PATH Act (Protecting American Taxpayers and Homeowners), he said, is to emphasize private capital and market discipline; define and limit the role of the state; remove artificial barriers to private capital; set down clear rules for market players; and give consumers options for mortgage products.

    “Neither a bankrupt FHA nor a bankrupt America helps anyone,” said Hensarling, chairman of the House Financial Services Committee, noting that taxpayers remain on the hook for $5 trillion in mortgage guarantees.

    After decades of government intervention, today’s homeownership rate of 65 percent is little different that it was in the late 1960s, Heritage Action CEO Mike Needham said in introducing Hensarling at the policy summit — which is streaming from Heritage Action’s website until its conclusion at 6 p.m.

    The United States is practically alone in the use of GSEs to prop up housing finance, Hensarling said, but also leads in foreclosure rates – “subsidizing more so that we get less.”

    This story was produced by The Foundry’s news team. Nothing here should be construed as necessarily reflecting the views of The Heritage Foundation.


    Posted in Front Page [slideshow_deploy]

    Comments are closed.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.