New Mexicans Need a Path to Healthy Homeownership
We want people to be able to buy homes. It’s good for Americans, and it’s good for the economy. Owning a home anchors a family, and helps to build a community. I got to where I am today because my parents took a chance and bought small place just outside Hobbs. They worked hard and were able to send us to college. But the system we have today puts that dream dangerously out of reach for many Americans, and it’s at risk of being lost forever.
During the housing crash of 2008, home values plunged and taxpayers were stuck with a bill for the most expensive bailout in our country’s history. New Mexico did not create the housing bubble or the financial crisis. We did not make the bad decisions that caused the crash—those came from Wall Street and Washington. But New Mexico taxpayers were forced to pay for the homes of complete strangers in Manhattan and Miami. To this day, we’re still feeling the effects of what started five years ago, especially when it comes home ownership. Today, fewer Americans own homes than at any point in the last 18 years. That’s bad news for our economy, our communities, and our future.
Why are things so bad? If you’ve tried to buy a house recently, you know about the overwhelming costs, regulations, barriers, and uncertainty that come with that. Right now, the federal government uses taxpayer money to back 9 out of 10 home loans—already costing Americans nearly 200 billion dollars. This is not sustainable: it puts you on the hook every time somebody buys a house. And when they don’t pay, you lose money. Instead, we need a solution that protects our small banks, our communities, and our ability to confidently own a home. We need a solution that benefits hard-working Americans—by providing them the options, affordability, and flexibility they need when buying a home, and by investing their tax dollars wisely, instead of forcing them into a system that cannot succeed.
The House Committee on Financial Services recently passed the Protecting American Taxpayers and Homeowners (PATH) Act of 2013. This bill provides key housing market reforms to protect both taxpayers and homeowners. The PATH Act provides commonsense solutions that keep New Mexico’s small communities in mind, and put America on the path to a sustainable, stronger economy.
I have worked closely with community bankers, realtors, homebuilders, credit unions, and mortgage brokers throughout southern New Mexico to make sure that this bill focuses on the needs of New Mexicans, not the needs of Washington lobbyists. Many community bankers support the legislation because it protects their ability to continue to serve New Mexico homeowners. Others appreciate the flexibility and rural focus included in the bill, such as options for conducting loans remotely or over the internet, without having to drive hours to a major bank.
In creating the PATH Act, we focused on fixing many of the problems currently facing the housing market. Change is necessary, but transition must be handled carefully, and must do no harm. Last year, when some in Congress wanted to take broad, immediate measures to change the markets, I worked hard to convince them to slow down and consider carefully. New Mexico is a small state with a small economy—if we pulled out a primary source of home loans overnight, the results would be catastrophic, especially in our small, rural communities. All reforms must keep New Mexicans in mind, and no reform should hurt middle-class Americans.
Now, the plan for reform has been revised, and it’s a better plan for New Mexico. Under the proposed plan, transition will happen gradually, over the next five years, giving communities like Hobbs or Silver City the chance to keep up. Where the government does remain involved, clear focus and boundaries will be defined, to protect taxpayers’ investments and help American families. Impact of other regulations will be examined and addressed, to make sure the big picture works.
I encourage you to get involved. Call your bank or credit union, your elected officials, and others to better understand how these laws affect you. And when it comes to changes, make your voice heard, to make sure that your investments, your bank, and your community are protected.
New Mexicans should never have been forced to pay for the $200 billion housing bailout. Your money should be spent on your families, their needs, and their futures—not houses for strangers. As the PATH Act moves to end an unstable system, investors will begin to gain confidence that another collapse isn’t right around the corner. By working together, we can put our country back on the path to a stronger, healthier economic future, and keep the dream of home ownership within reach.