California Congressman Brad Sherman released a statement last week detailing components of the recently proposed Protecting American Taxpayers and Homeowners (PATH) Act he did not agree with. In his formal Testimony, Sherman requested that the markup be delayed until September to allow time for adequate review.
Based on Sherman's testimony, the PATH Act would hurt homeowners and taxpayers, banks and credit unions, and force the status of our economy to plunge. On the other hand, supporters of the legislation say it will save the nation's housing market and prevent another devastating collapse.
Supporters of the PATH Act have argued that the bill would not threaten what is known as an "affordable 30-year fixed rate mortgage," because non-federally constrained lenders offer the loan already - not just government-backed Fannie Mae or Freddie Mac.
Sherman is one of several lawmakers who believe that the 30-year fixed-rate mortgage would be abolished under the authority of the PATH Act. According to the Congressman, nearly 80 percent of borrowers would not be able to obtain such an affordable loan under the bill. Congressman Sherman as well as other lawmakers are worried that the currently thriving housing markets would plummet to all-time lows.
He was firm to point out that the Qualified Mortgage Rules need reform, but that it's critical that they are not abolished as supporters of the PATH Act are proposing.
One of Sherman's main points during his testimony was the fact that during the consideration of the PATH Act, he himself offered an amendment to avoid drops of conforming mortgage loan limits for high-cost areas - like the San Fernando Valley. Despite not being passed, the lawmaker is expressing his need to guarantee that we don't give upon new polices, just to return to older polices he labels as being "dangerous policies of the 1930s."
For more information on the PATH Act, visit the following link.