WASHINGTON, D.C. – Today the House Financial Services Committee Chairman, Jeb Hensarling (R-TX), unveiled a bipartisan bill to reform the government-sponsored housing enterprises (GSEs). In a press release, Hensarling vowed to end the conservatorship of Fannie Mae and Freddie Mac by winding them down completely. Hensarling’s press statement fails to mention any efforts to tackle affordability in the midst an of an affordable housing crisis. If this bill becomes law, it would shrink Fannie Mae and Freddie Mac and abolish their affordable housing goals.
Jesse Van Tol, CEO of the National Community Reinvestment Coalition, made the following statement:
“Today, on the 10th anniversary of GSE’s conservatorship, members of Congress from both parties proposed an assault on the American dream of homeownership. Any GSE reform that abolishes or weakens the affordable housing goals will be disastrous for young Americans. It would extract a lifetime of rent from millennials and families who currently qualify for a mortgage.”
“I understand the desire to tackle GSE reform, and to end the conservatorship. But our conversation about GSE reform cannot remain convoluted by myths and false narratives. The GSEs didn’t cause the 2008 financial crisis. They aren’t costing taxpayers money, they are profitable. For many decades they have played a crucial role as a responsible engine driving our housing market. Today, the enterprises are more profitable, more stable and better-regulated than at any point in history.
“By eliminating affordable housing goals from the conventional mortgage market, lenders could choose to loan only to wealthy borrowers and ignore people still working their way up the economic ladder. For 25 years, the affordable housing goals at Fannie Mae and Freddie Mac enabled homeownership to become a dream come true for millions by helping credit-worthy people access mortgages.
“GSE reform that ignores our affordable housing crisis isn’t reform, it’s a retreat.”