Rep Randy Neugebauer (R-Texas), the chairman of the Financial Services Subcommittee on Housing and Insurance, recently introduced legislation that he said would provide Americans with an improved housing finance model.
The proposed bill, the Protecting American Taxpayers and Homeowners Act, is the product of 12 hearings and multiple meetings with stakeholders.
Neugebauer said the bill would allow the housing finance system to function without the recent years of unprecedented government intervention by phasing out the bailouts of Fannie Mae and Freddie Mac during a five-year period. It would also redefine the Federal Housing Administration to ensure that it is focused on serving first-time homeowners and low-to-moderate-income borrowers.
The proposed bill would also 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.
“The truth is, our housing system is broken,” Neugebauer said.
The current housing system cost $16 trillion in wealth destruction and nearly $200 billion of taxpayer funded bailouts that plunged the United States into further debt, according to Neugebauer.
The United States currently ranks 17th in the world for home ownership rates.
“I know it is human nature to be resistant to change and I get it,” Neugebauer said. “Change is difficult, but in the case of housing finance, not to change is fatal.”