House Committee and Financial Services Chairman Jeb Hensarling, R-TX, announced the creation of proposed legislation to reform the housing finance system.

In particular, the bill wants to wind down the enterprises in five years time.

Market experts voiced their reactions to the proposal and the majority are pleased with another proposed route to housing sustainability. 

The Securities Industry and Financial Markets Association encouraged the addition of the Protecting American Taxpayers and Homeowners (PATH) Act as another option foward in the effort to reform the housing market. 

“We agree with Chairman Hensarling’s fundamental premise that private capital must play a significantly larger role than it does in today’s market,” said CEO Judd Gregg and President Kenneth Bensten of SIFMA. 

They added, “SIFMA also applauds the inclusion of provisions that halt the use of eminent domain to seize mortgages from Main Street investors, as this would have an unprecedented and damaging effect on private efforts to support housing finance by causing private capital to flee mortgage markets, not return to them.”

On a similar note, the Mortgage Insurance Companies of America congratulated the committee members on the executive summary of the PATH Act.

Members of the organization applaud the bill’s focus on the importance of returning private capital to the secondary market through both reform of the private securitization market and reform of the Federal Housing Administration.

“The private mortgage insurance industry continues to play an important and expanding role in protecting taxpayers on low down payment mortgages and we stand ready to continue to serve this role in any restructuring of the secondary market and the Federal Housing Administration,” said Teresa Bryce Bazemore, president of the Mortgage Insurance Companies of America.

She concluded, “We look forward to working with lawmakers in both parties and in both chambers as Congress considers these important issues.”