Today we welcome back our former colleague and my good friend, Federal Housing Finance Agency Director Mel Watt. It has been more than two years since Director Watt last testified before us, and I must note that while he has been hard at work righting the path of Fannie Mae and Freddie Mac, this Committee has been at a standstill on housing finance reform.
Under Director Watt’s leadership, the Federal Housing Finance Agency has systematically addressed many of the technical weaknesses in the housing system to better protect homeowners, taxpayers and our economy. The GSEs have now transferred to the private sector an amount of credit risk comparable to that lost by the GSEs during the crisis, thereby protecting taxpayers in the future. Director Watt has also sought to improve affordability by, for example, enabling qualified, credit-worthy families to purchase homes with as little as three percent down, proving that such borrowers are just as responsible as those with more means.
Unfortunately, for the last seven years under Republican control, the House has entirely failed to advance broader legislative reforms to end the GSEs’ conservatorship. In fact, this Committee has not convened a single hearing since Director Watt’s last appearance before us more than two and half years ago on any topic related to reforming the GSEs. Even the Senate, known for its slow deliberation, has already convened two hearings on the topic this year.
Unfortunately, our Chairman refuses to abandon the failed ideas in the PATH Act, which is still opposed by industry, consumer groups, civil rights groups, all Democrats and even a few Republicans. Those who oppose understand that the PATH Act hurts middle-class families, and is bad for America.
Democrats and the American people know what’s important in the housing finance reform debate: an explicit, paid-for government backstop, a mission to promote affordability, the 30-year fixed rate mortgage, a robust housing trust fund, strong federal oversight, support for the multifamily housing market, and equal market access for our community banks and credit unions. Any proposal that fully embraces those principles should be taken seriously.
