Three years after the Dodd-Frank Act failed to address the need for housing finance reform and end the record taxpayer-funded bailout of Fannie Mae and Freddie Mac, the Financial Services Committee approved legislation to end their bailout and create a sustainable housing finance system for America.
The bill – the Protecting American Taxpayers and Homeowners Act, the PATH Act – ends the largest bailout in history – the nearly $200 billion taxpayer-funded bailout of Fannie Mae and Freddie Mac – and phases out the troubled Government-Sponsored Enterprises (GSEs) within five years; increases competition by ending the federal government’s domination of the housing finance market that has left taxpayers liable for $5.1 trillion in mortgage guarantees; and gives consumers more choices in determining which mortgage product best suits their needs.
“The PATH Act creates a housing finance system that’s designed for homeowners so every American who works hard and plays by the rules can have opportunities and choices to buy homes they can afford to keep. It creates a housing finance system that’s designed for hardworking taxpayers so they never again have to bail out corrupt financial government enterprises like Fannie Mae and Freddie Mac, whose top executives engaged in accounting shenanigans to trigger huge bonuses for themselves,” said Chairman Jeb Hensarling (R-TX). “With the reforms in the PATH Act, Americans will finally have a housing finance system that is worthy of them.”