What: All Issues : Aid to Less Advantaged People, at Home & Abroad : America's Poor : Federal housing finance overhaul (H.R. 1427)/ Rep. Patrick McHenry (R-N.C.) amendment to require a study on the effects the contributions to the affordable housing fund would have on the cost of mortgages to homebuyers and suspend the program if the program served to increase the costs of mortgages (2007 house Roll Call 380)
 Who: All Members : New York, District 2 : King, Pete
[POW!]
 
Federal housing finance overhaul (H.R. 1427)/ Rep. Patrick McHenry (R-N.C.) amendment to require a study on the effects the contributions to the affordable housing fund would have on the cost of mortgages to homebuyers and suspend the program if the program served to increase the costs of mortgages
house Roll Call 380     May 17, 2007
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This vote was on an amendment to a bill to create a new independent agency to oversee the workings of Fannie Mae, Freddie Mac and the Federal Home Loan Bank System, the federally chartered organizations that support the home mortgage market. In addition to creating the Federal Housing Finance Agency, the legislation would also create a new stream of funding for affordable housing programs funded by contributions by Fannie Mae and Freddie Mac. This amendment, proposed by Rep. Patrick McHenry (R-N.C.), would have required the Government Accountability Office to study the effects the affordable-housing fund would have on the availability and affordability of credit for homebuyers and the extent to which the costs would be passed on to homebuyers.

Republicans said the amendment was simply a way to assess whether the costs of the contributions to the affordable housing fund would be passed on to mortgage holders, and Democrats said it was a backdoor attempt to kill the program.

"Some of us on this side of the aisle, many free market conservatives, believe that what is deemed the affordable housing Fund, the Housing trust fund, will be passed on straight to the mortgage consumers of America," McHenry said, "in essence, a tax increase on those who have mortgages, especially middle income individuals."

Rep. David Scott (D-Ga.) responded that the amendment was a thinly veiled attempt to "obliterate the program."

"Now, it's very important for us to understand, we're dealing right now with a very volatile housing market," Scott said. "We're dealing with a situation where the subprime market has melted down. We're dealing with a situation where we've had record foreclosures.

"There is a need for government. We have a constitutional responsibility to take care of the public interests. If there ever was a need for the public interest, it is needed in affordable housing," Scott said.

Scott went on to explain that McHenry's amendment concerned him because it gave one regulator (the director of the Federal Housing Finance Agency) the power to determine whether GAO's assessment meant that contributions to the affordable housing program were causing a decrease the availability or affordability of credit to home buyers or would increase the costs to homebuyers.

"All of that power you are putting arbitrarily into a person's hands to say, on his whim, kill the program, done with the program, based upon what he sees and what he says," Scott said.

The majority of lawmakers agreed with Scott's assessment, and the amendment was rejected easily. Fourteen Republicans joined a unanimous Democratic Caucus to oppose the amendment. Thus, by a vote of 176 to 240, the House rejected an attempt to require that contributions to an affordable housing program be predicated on whether the chief housing finance regulator interpreted a GAO report to mean that the program constituted a hidden tax on homebuyers. A bill to reform the federally chartered organizations that support the home mortgage market went forward with the affordable housing program unaltered.

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