Bill Description

This bill, originally introduced by Rep. Garrett (R-NJ), would phase out Fannie Mae and Freddie Mac thereby permanently ending their $200 billion bailout, reform the Federal Housing Administration (FHA), reduce costly governmental control of the mortgage market, and help protect community banks by removing unnecessary restrictions and regulations that make it more difficult for American families to purchase homes. In addition to the reforms, this bill would specifically transition FHA to serving first-time home buyers with low-to-moderate incomes while protecting American consumers through preservation of the 30-year fixed rate mortgage.

Liberty for All's Position

Much of the financial crisis of 2008 was caused by the mismanagement and cavalier actions of Fannie Mae and Freddie Mac. These organizations took massive ricks and made loans to individuals who should not have qualified for them due, in large part, due to the government backing of those loans. The government's implied guarantee allowed Fannie Mae and Freddie Mac to transfer the risk of poor investments to everyday Americans and made billions in the process. Instead of letting them pay for their mistakes, the government then bailed them out at massive expense to the U.S. taxpayer. Liberty For All stands steadfast in the belief that the free-market assess risk better than the government and that no bank or institution is "too big to fail." The PATH act would begin to return control of residential mortgages to the banks that provide the funds for them and would start to end the market distortions that caused these crises in the first place. This bill is one of the first bills that actually address a major cause of the financial crisis - government intervention in the market place - and its passage will spur economic growth and create a more competitive market-based lending environment.

Current Status

The committees assigned to this bill sent it to the House or Senate as a whole for consideration on July 24, 2013.