Dear Chairman Jeb Hensarling:
On behalf of more than two million Americans for Prosperity activists in all 50 states, I applaud you for introducing the Protecting American Taxpayer and Homeowners (PATH) Act, which would take major steps toward reducing the federal government’s over-involvement in the housing market.
Recent history shows that, in having a heavy hand in the housing market, the government produces damaging unintended effects that reverberate in the economy. It has pushed people into buying homes they cannot afford, caused over-building in many regions of the country, and shifted enormous risk to taxpayers. Disappointingly, in the five years since the housing bubble burst, Washington has done very little to prevent us from repeating the same mistakes. The public policies that led to the housing crisis continue today, largely unchanged.
Your legislation winds down Fannie Mae and Freddie Mac, the two Government Sponsored Enterprises (GSEs) that were instrumental in causing the housing crisis, ultimately eliminating them over a 5 year period. It makes a number of additional policy changes that will wean borrowers off taxpayer-backed subsidies and transition them into private sector financing solutions. Reducing the GSEs’ conforming loan limits in high-cost areas to $525,500 is a step in the right direction to limiting taxpayer risk, but it should go even further: With nearly $17 trillion in federal debt, it’s unacceptable that the government would even consider subsidizing mortgages that exceed half a million dollars.
Additionally important, your legislation reins in the Federal Housing Administration (FHA). This troubled agency has strayed far beyond its original purpose of helping low-income and first-time homeowners secure subsidized loans and mortgage insurance with low down payments.
Government intervention in the housing market has done much more harm than good, and it needs serious reform. Americans for Prosperity is proud to support the PATH Act. I urge your colleagues to support its passage, and I look forward to working with you in the future.
Christine Harbin Hanson
Americans for Prosperity