WASHINGTON – The Republican leadership of the House Financial Services Committee plans to introduce four bills next week that would terminate the Obama administration’s mortgage foreclosure programs they labeled “failed” and “ineffective.”
The bills to be voted by the new Republican-controlled committee next week would eliminate the Neighborhood Stabilization Program, the FHA Refinance Program, the Emergency Homeowner Relief Fund, and the Home Affordable Modification Program, known as HAMP, which has provided grants to dozens of credit unions to intervene in foreclosures.
“In an era of record-breaking deficits, it’s time to pull the plug on these programs that are actually doing more harm than good for struggling homeowners,” said Rep. Spencer Bachus of Alabama, the new chairman of financial services. “These programs may have been well-intentioned but they’re not working and, in reality, are making things worse.”
According to the Republican leadership on the committee the HAMP was supposed to help 4 million homeowners, but only 521,630 loans have been permanently modified under the program, and the re-default rate is high. The government has spent about $840 million on HAMP, the leadership said.
Chances of the programs being eliminated with these bills are slim because they would still have to be approved by the Democratically controlled Senate, which is not likely to agree.
