Rep. Randy Neugebauer (R-Texas) recently expressed disappointment at calls for a bailout of the Federal Housing Administration, calling instead for the enactment of the PATH Act, or Protecting American Taxpayers and Homeowners Act.
“Today’s report that FHA may need a $1 billion taxpayer-funded bailout further demonstrates FHA’s dire financial condition,” Neugebauer said. “If true, this latest bailout would be on top of the $180 billion that taxpayers have already sunk into Fannie and Freddie…The report today solidifies the need for Congress to pass the common-sense reforms in the PATH Act, which would get the FHA back on a sound financial footing.”
Neugebauer said that FHA’s outsized market share, displacement of private sector alternatives and the risk it poses to taxpayers makes it necessary to go beyond fiscal solvency reforms and instead address major structural issues at FHA.
The PATH Act’s Title II has four objectives – to put FHA back on sound financial footing to better protect taxpayers, to clearly define FHA’s mission to allow it to focus on serving first-time homebuyers and creditworthy low-to-moderate income borrowers, to shift risk away from taxpayers and into the private sector while reducing FHA’s footprint and to ensure that FHA runs its MMI Fund according to the basic tenets of insurance.
“The PATH Act has passed the House Financial Services Committee with my support,” Neugebauer said. “As one of its primary authors, I look forward to supporting this bill through its final passage.”