Fitzpatrick highlights federal housing challenges

The housing industry is an indispensable driver of our economy, Congressman Mike Fitzpatrick told Realtors® at the Public Policy and Political Affairs Seminar yesterday.

Fitzpatrick said, “Housing creates wealth for individuals and it supports small businesses and entrepreneurs like many of you.”

According to the Bipartisan Policy Center, if the housing industry could return to its average contribution to the economic growth, it would create 2.9 million jobs for architects, construction workers, tradesmen and Realtors®.

Fitzpatrick discussed the challenges faced after the housing bubble burst. He said, “In Washington, the cure can be worse than the disease. The Dodd Frank reform legislation was almost 900 pages and is rife with unintended consequences. Those 900 pages have led to the creation of 9,000 rules. It was the panacea of long desired Wall Street reforms that over-regulated some areas while leaving some culprits of the financial crash completely untouched.”

The Consumer Finance Protection Bureau (CFPB) was created by the legislation. The CFPB has been charged with defining a Qualified Mortgage. “Dodd Frank required that lenders must ensure that customers have an ability to repay their loans and tasked the Federal Reserve and the CFPB with writing a rule to implement the policy,” he said.

Fitzpatrick said the final rule outlining the basic requirements for lender underwriting and defining what a  qualified mortgage is. The House Financial Services Committee is going to be examining the rule and the yet-to-be released “Qualified Residential Mortgage” rule to make sure that credit options are not limited and that consumers are not negatively affected.

The House Financial Services Committee has also already held two hearings on the health of the Federal Housing Agency. “You can expect GSE reform  to be a priority this Congress,” he said. “I consider the most important aspect of GSE reform that we continue to have a vibrant and liquid secondary mortgage market to ensure access to affordable mortgage credit for working-class families. Any reform that I would support must also ensure that taxpayers are never on the hook for bailing out risky decisions that benefit private investors.”

The congressman said he believes there is hope for bipartisan cooperation on important housing issues like reforming the mortgage finance industry and protecting taxpayers.