Rep. Scott Garrett (R-NJ), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, issued the following statement today after learning the Federal Housing Administration (FHA) ended September with $16 billion in losses:
"Today, the administration finally admitted that a taxpayer bailout of the Federal Housing Administration is all but certain, and this news, while terrible is certainly not surprising. Independent watchdogs, taxpayer advocates, and Members of Congress have been warning the administration for several years that FHA's fiscal position was rapidly deteriorating. Unfortunately, the administration failed to take the measures needed to prevent a bailout.
"I hope that a lesson can be learned from this unfortunate news. Government guarantees are not free. The impending bailout for the FHA and the ongoing $200 billion bailout for the GSEs proves that government guarantees in the housing market put taxpayers on the hook. Whenever the government guarantees something, eventually the American taxpayers will have to pay for a bailout.
"The Senate must act immediately and pass H.R. 4264, the FHA Emergency Solvency Act, which passed the House in a bipartisan way with over 400 votes. This legislation provides HUD with emergency tools to begin fixing the FHA and gives Congress a clearer understanding of just how dire FHA's financial position really is.
"Moving forward, this wake-up call will hopefully serve as a catalyst for reforming our nation's housing finance market and significantly reducing the American taxpayers' exposure to further bailouts of the housing market."