Rep. Jeb Hensarling, R-Texas, plans to reintroduce the PATH Act, a bill that would reform the mortgage giants Fannie Mae and Freddie Mac, the lawmaker said during remarks at a House Financial Services Committee hearing Sept. 6.
However, the lawmaker, who is the committee's chair but is not running for re-election in November, expressed doubt that the bill would advance to law. Hensarling said he is also partnering with Rep. John Delaney, a Democrat representing Maryland, to push for a fix that would preserve a government guarantee for the secondary mortgage market.
"Regrettably, [the PATH Act's] chances for passage remain slim," Hensarling said. His and Delaney's compromise would help resist the "increasingly dangerous status quo" of failing to reform the two government-sponsored enterprises, he said.
The plan would codify the federal government's guarantee in the mortgage securitization market, making the government's unofficial backstop a permanent feature of the housing market. It would also allow other companies aside from Fannie and Freddie that securitize mortgages to access that guarantee, which is provided by the Government National Mortgage Association, or Ginnie Mae.
Fannie and Freddie have been in conservatorship since the financial crisis and efforts to remove them from federal protection and reform the secondary market for mortgages have stalled for nearly a decade.
"In the time I have remaining in Congress, this is the plan I will pursue," Hensarling said.