The Protecting American Taxpayers and Homeowners Act – the PATH Act – expressly preserves the 30-year fixed rate mortgage. In fact, it's the only housing reform bill that specifically does so. But those who defend the status quo are trying to trick you into believing otherwise.
Don't believe those scare tactics. Just read it for yourself. On page 39 of the bill, it's spelled out clearly in Section 213: “the FHA… shall provide, among other mortgage insurance products, for the availability of a 30-year fixed rate mortgage.” Not can provide, may provide, or could provide – but SHALL provide.
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If it becomes law, the PATH Act would mark the first time that the FHA is specifically required to offer a 30-year fixed rate insurance product. Moreover, many have said the very existence of the 30-year fixed rate mortgage is due to the creation of the FHA. If that's the case, the PATH Act goes to great lengths to strengthen the 30-year fixed rate mortgage by taking FHA out of HUD and making it its own autonomous, stand-alone agency. This new FHA would have the tools and flexibility it needs to fulfill its mission in a financially sound manner.
Still spooked? Consider this: The 30-year fixed rate mortgages existed before the financial crisis and they are being made today without a government guarantee.
As the Washington Post recently stated in an editorial: “Opponents of the PATH Act argue that the lack of permanent government backing will deprive the market of liquidity and consequently end the 30-year fixed rate mortgage…One answer to that is that some 30-year fixed rate loans already exist without government help…”
Homebuyers should have the opportunity to acquire a 30-year fixed rate mortgage. They do today. And the PATH Act will not change that.
Don’t get tricked; get the facts. The PATH Act creates a sustainable housing finance system for the American people...
- It ends the biggest taxpayer-funded bailout in American history – the nearly $200 billion bailout of Fannie Mae and Freddie Mac.
- It strengthens and protects the FHA by giving it tools to tackle its solvency crisis and by giving it a specific mission to serve first-time homebuyers and those with low-to-moderate incomes. The FHA is in such a scary mess it just took a $1.7 billion bailout from the taxpayers!
- It reduces government control of the mortgage market by removing artificial barriers to private investment capital.
- It repeals Dodd-Frank Act regulations that are harming community banks and credit unions and making it more difficult for middle income Americans to buy homes they can afford to keep.
- And it preserves the 30-year fixed rate mortgage.