Government looking for new ways to support residential financing
Posted on Wednesday, July 24, 2013 at 12:23:55 PM
For years, Fannie Mae and Freddie Mac had the ability to back a number of mortgages, but a recent approval from the House Financial Services Committee has provided an avenue for the giant government-sponsored enterprises to step aside.
The Protecting American Taxpayers and Homeowners Act, or PATH, sets forth legislation that would attempt to reduce the role those two organizations play in regards to residential financing. In addition, the Federal Housing Administration's influence for first-time and low-income home buyers would diminish.
The bill appears to be somewhat divided upon party lines, and it only passed after an extended debate and numerous contended points.
"The passage of this legislation today is a critical step in reforming our nation's housing finance system and ensuring the American taxpayers no longer have to fund $200 billion bailouts," said Rep. Scott Garrett.
Moreover, residential financing has helped more buyers acquire new homes, as the sales numbers for June were higher than several predictions.
Recent data from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development showed an increase of new houses sold, reaching a seasonally adjusted annual rate of 497,000 for the month. It is higher than both the year-over-year and month-over-month rates.
Ideally, more people will have the ability to finance new homes, thanks to a stronger market and legislation like the PATH Act.