Congresswoman Maxine Waters
(D-CA), Ranking Member of the House Financial Services Committee, today applauded Senators Tim Johnson (D-SD) and Mike Crapo (R-ID) for reaching agreement on an effort to reform the housing finance system.
She released the following statement:
“I am encouraged by the news that Senators Johnson and Crapo have reached agreement on principles for the reform of Fannie Mae and Freddie Mac. Reforming a 10 trillion dollar housing finance market is an immense undertaking that must be carefully considered.
Over the past several months, I too have been working with Democratic members of the Financial Services Committee to develop a proposal to reform the housing finance system. The proposal, which will be released in two weeks, will preserve the affordable 30-year fixed rate mortgage and provide an explicit government guarantee that is paid for by industry. It will also end the perverse incentives created by Fannie Mae and Freddie Mac's ownership structure of private shareholders.
My proposal – as well as those by Senators Johnson and Crapo and Senators Corker and Warner – all embrace these common themes. However, I’m working on this proposal because in the House, Republican leadership has put forth a reform plan that is far outside the mainstream. The PATH Act undercuts our housing market, our middle class and our economic recovery. It irresponsibly jeopardizes the availability of understandable mortgages like the 30-year fixed rate, severely limits FHA-backed mortgages and significantly harms community banks and credit unions by favoring the mega-banks. It would also repeal the protections against predatory lending in the Wall Street Reform law, inviting unscrupulous subprime lenders back into the market.
In reaching agreement, Senators Johnson and Crapo have achieved a significant milestone. But without a reasonable proposal that can be supported by a broader coalition of the House, housing finance reform is going nowhere this year.”