Rep. Scott Garrett (R-NJ), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, issued the following statement today after the Obama administration released the details of a massive, government-backed mortgage refinance program:
"The president's proposal represents the latest salvo of the federal government's unprecedented expansion into our nation's housing market. Rather than offer a proposal that would actually bring relief to struggling homeowners and the faltering U.S. economy, President Obama is doubling down on the same failed policies that have already proven hopelessly ineffective at stemming the tide of foreclosure. From the failed Home Affordable Modification Program (HAMP) to the ineffective Home Affordable Refinance Program (HARP), we already know that government intervention will not fix the systemic problem plaguing the housing market.
"The president continues to take an entirely wrong approach to addressing our nation's housing woes. Rather than increase the government's stranglehold on our nation's housing finance system, we need to dial it back so that private market participants can step in to do their job. The pursuit of a massive, government-backed refinance program to bail out underwater borrowers will force the American taxpayers to take on substantial amounts of additional risk that will no doubt translate to future losses. With the Federal Housing Administration (FHA) already on a collision course with bankruptcy, it is unconscionable for the president to even consider a proposal that would make a disastrous situation worse.
"Throughout the last year, I have worked to reform the housing finance system so that the federal government can get out of the way and the private market can step in. Most recently, I introduced the Private Mortgage Market Investment Act, which would reform the secondary mortgage market to ensure robust private investment in the U.S. mortgage market without a government guarantee. I encourage the president to take a look at my proposal if he wants to find a solution that will actually fix the problem. Until the president gives up his crusade to increase the government's interference in the housing market, home foreclosures will continue to rise, our economy will continue to falter and every American's share of the national debt will continue to grow."