New Housing Measure Expands Reach of Federal Government (Rep. Randy Neugebauer)
April 11th, 2008
Families shouldn’t have to make their mortgage payments and their neighbor’s mortgage payment too.
As our committee discusses new legislation introduced by Chairman Frank (D-MA), I believe it is important to first remind ourselves that 95 percent of Americans with a mortgage are making their payments on time.
There is no doubt that many other Americans are facing difficulties meeting their mortgage obligations. I appreciate lenders’ efforts to work with borrowers who want to stay in their homes. Efforts such as the Hope Now alliance have helped more than a million homeowners keep their houses.
I am concerned, however, that these new proposals we are considering go far beyond assisting Americans facing difficulties paying their current mortgage and greatly expand the role and reach of the federal government.
It is not the role of the federal government to create equity in a home. Yet the proposal we discussed yesterday would put the federal government in a position of determining a borrower’s equity and put the taxpayers on the hook for any further declines in that borrower’s equity or default. Borrowers would be eligible even if they are able to make their current mortgage payments. As home prices appreciate in the future, borrowers who sell their property after five years could retain all gains on the value, despite not meeting the obligations of their original mortgage. This is simply not fair to those hard working Americans that are already paying their mortgages in full and on time.
While helping some refinance who truly need the assistance is appropriate, this proposal would reward many who made irresponsible decisions and transfer many borrowers’ risks to the taxpayers.
While markets are not always kind, they are efficient; home equity should be determined by the marketplace. I hope my colleagues carefully consider all the consequences of the various proposals for further federal government intervention. Congress shouldn’t penalize Americans who are making their payments and working hard to stay in their homes.
Families shouldn’t have to make their mortgage payments and their neighbor’s mortgage payment too.
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