Washington, – December 16, 2013 – (RealEstateRama) — Financial Services Committee Chairman Jeb Hensarling (R-TX) issued the following statement on Friday about the $1.3 billion projected shortfall at the Federal Housing Administration (FHA).
“Today’s news confirms what advocates of FHA reform have known for years – that a broke FHA is a broken FHA. It’s been barely two months since hardworking taxpayers were forced to bailout the FHA with $1.7 billion and we’re already faced with the prospect of another bailout for the FHA next year. The American people want to end the destructive cycle of boom, bust and bailout that Washington housing policies have helped foster. They do not want an economy laid low by unsustainable levels of debt. Regrettably, the FHA, as it operates today, exacerbates both.
“This latest bad news about the FHA’s finances simply reinforces the need for the reforms embodied in the Protecting American Taxpayers and Homeowners Act, the PATH Act, which our committee passed in July.
“The PATH Act will put FHA on sound financial footing and keep it there. It clearly defines FHA’s mission to ensure that the agency is serving first-time homebuyers and low-to-moderate-income borrowers. The PATH Act shifts risk away from the taxpayers and into the private sector by reducing FHA’s footprint and making sure the agency is complementing the private sector, not competing with it. It ensures that FHA runs its single-family insurance fund according to the basic tenets of mortgage insurance. And finally, the PATH Act mandates the insurance of the 30-year fixed mortgage and retains FHA’s countercyclical role.
“The time for FHA reform is now. We cannot and should not wait until the next taxpayer bailout.”