McHenry: Democrats’ Blatant Mismanagement of Our Housing Finance System Has Done Real and Lasting Damage to American Households
July 20, 2022 -
Today, the House Financial Services Committee is holding an oversight hearing of the Federal Housing Finance Agency with Director Sandra Thompson. While failing to conduct oversight of the Biden Administration’s housing finance plans, Democrats have pursued a far-left agenda that will exacerbate the rising cost of housing and inject unnecessary risk into the U.S. housing finance system.
This hearing follows a letter last month from Republican Leader Patrick McHenry (NC-10) and Subcommittee Republican Leader French Hill (AR-02) demanding Chair Waters require Director Thompson to testify on the rising threats to the safety and soundness of our housing finance system.
Watch Republican Leader McHenry’s opening remarks here.
Read Republican Leader McHenry’s opening remarks as prepared for delivery:
“Thank you, Madam Chair.
“Director Thompson, I’d like to congratulate you on your recent confirmation and welcome you to the first of what I hope are many appearances before this Committee.
“Today’s hearing is important for many reasons.
“The first and most obvious reason is the Federal Housing Finance Agency’s regulation of government-sponsored enterprises Fannie Mae and Freddie Mac, as well as the 11 Federal Home Loan Banks.
“Combined, these entities hold more than $7.5 trillion in mortgage assets, with GSEs financing roughly half of all new mortgages originated in the U.S. each year.
“This makes them arguably the most important component of our housing finance system despite the fact they have been in conservatorship since Bush 43.
“The second reason this hearing is important is that it marks this Committee’s return to actually doing its job of oversight.
“It’s been nearly two years since the Chair has held a hearing with FHFA.
“That was when former Director Mark Calabria came to discuss his successful COVID response, which helped protect homeowners and taxpayers from total economic meltdown.
“This earned Director Calabria much praise, followed by an unceremonious and unjustified firing by the Biden Administration in June 2021.
“After that, Ms. Thompson served as acting director for nearly a year. It has taken another 8 weeks since her confirmation for this Committee to bring her in to testify.
“There’s no telling how long that streak would have continued.
“So, last month Housing Subcommittee Ranking Member Hill and I sent a letter to the Chair requesting that she invite Director Thompson to testify at the June housing hearing.
“Let’s hope this doesn’t turn out to be another case of too little, too late like the administration’s response on inflation, gas prices, supply chain failures, and the rest of our economy.
“Such blatant mismanagement has done real and lasting harm to American households.
“Congress’ neglect of the FHFA and some of its recent decisions threaten to do even more harm.
“As the Chair noted at last month’s hearing quote ‘rising home prices are directly contributing to inflation.’
“Mortgage rates have nearly doubled over the last year to levels unseen since 2008.
“Meanwhile, instead of working to maintain stability, FHFA has weakened our housing finance system by reducing taxpayer protections and pushing new risky schemes.
“For example, the Agency rescinded the capital and liquidity rule designed to ensure the GSEs could weather an economic downturn.
“FHFA has also refused to complete work on the 2020 proposed rule on prior approval of new GSE products and pilot programs.
“And, most recently, FHFA compelled the GSEs to issue disastrous new controversial ‘equitable housing finance plans,’ which violate the spirit of that proposed rule.
“This is FHFA’s focus as soaring housing costs and mortgage rates price hardworking families out of the market.
“American homeowners and prospective homebuyers deserve a fair system in which they can reasonably pursue the American dream.
“Inflation and instability do not support that objective.
“I hope that we can use this hearing to get some answers from FHFA on its plans to make homeownership an attainable goal for all Americans.
“I yield back.”
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