President Obama’s four major initiatives to provide relief to hard-hit homeowners — including his signature foreclosure prevention effort, the Home Affordable Modification Program (HAMP) — are on the firing line as Republicans in Congress seek to seize the unused funds from the programs to help reduce the debt.
President Obama’s four major initiatives to provide relief to hard-hit homeowners — including his signature foreclosure prevention effort, the Home Affordable Modification Program (HAMP) — are on the firing line as Republicans in Congress seek to seize the unused funds from the programs to help reduce the debt.
The Republican-controlled House voted Thursday to terminate the Federal Housing Administration’s Refinance Program, which is aimed at helping borrowers who owe more than their homes are worth. That program, authorized under the Troubled Asset Relief Program, has only used $50 million of the more than $8 billion allocated for it since it launched in September.
Despite the sudden burst of activity on the House floor, the bills are likely to die in the Senate where Democrats still retain power.
But taken together, the programs have given ammunition to both liberals and conservatives critical of the administration’s housing policy amid a foreclosure crisis in which banks repossessed a record of more than 1 million homes in 2010 with even more expected this year.
Special Inspector General for TARP Neil Barofsky savaged HAMP in congressional testimony this month, saying the program’s “failed trial modifications often leave borrowers with more principal outstanding on their loans, less home equity, depleted savings, and worse credit scores.”
There is “near universal agreement that the program has failed to meet its goals,” Barofsky said, adding “there is little reason to hope things will get better.”
