Hensarling on Senate housing reform bill: Too little, too late

The House Republican leading efforts on housing finance reform attacked the Senate plan Thursday, further underscoring the long odds an overhaul faces this year.

Rep. Jeb Hensarling (R-Texas), the chairman of the House Financial Services Committee, said in a statement that legislation recently passed by the Senate Banking Committee had likely come too late, and was too contentious to gain steam in the midterm election year.

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In particular, Hensarling blasted the Senate plan for including affordable housing provisions he billed as a “wealth redistribution scheme.”

“The Senate bill features a controversial and irresponsible new politicization of mortgage credit insisted by Senate Democrats under the guise of affordable housing,” he said, going so far as to say those provisions are worse than doing nothing at all.

On Thursday, the Senate Banking Committee advanced its housing finance reform by a vote of 13-9, but the bill faces long odds of being approved by the full Senate. The legislation is backed by the top Democrat and Republican on the panel, but backers postponed a previous vote on the bill in an attempt to muster up further support.

Hensarling’s panel advanced another housing finance reform bill roughly a year ago with strictly partisan support.

While both bills would do away with the bailed-out housing giants Fannie Mae and Freddie Mac, Hensarling’s bill would go much further in removing any role for the government in the housing market. His legislation was strongly opposed by Democrats who believe a government guarantee is needed in the housing market to keep credit affordable for borrowers.

Beyond differences between the two bills, Hensarling said there simply might not be enough time to strike a final deal on housing finance reform this year, with roughly six months left before the Congress adjourns.

"The fact remains the window for action this year is quickly closing, and I fear it may already be too late during this Congress with an already full agenda to get meaningful reform bills through both chambers,” he said.