Four Federal Foreclosure Mitigation Programs Are Looked At To Terminate

Rep. Spencer Bachus (R-Alabama), chairman of the House Financial Services Committee, announced this week that he has scheduled a subcommittee hearing and full committee markup of four bills that will terminate what he says are “failed and ineffective housing foreclosure programs.”

On the chopping block are the Home Affordable Modification Program (HAMP), HUD’s Neighborhood Stabilization Program, the Federal Housing Administration (FHA) Short Refi Program, and the Emergency Homeowner Relief Fund passed under the Dodd-Frank Act.

A hearing will be held on March 2 by the Insurance, Housing and Community Opportunity Subcommittee to review the four bills addressing each federal program, followed by a full committee markup on March 3.

“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. Bachus. “These programs may have been well-intentioned but they’re not working and, in reality, are making things worse.”

Rep. Judy Biggert (R-Illinois), chairman of the Insurance and Housing Subcommittee, added, “We need to break down barriers that have delayed the housing recovery, including expensive and ineffective government programs that have failed to help homeowners. Unfortunately, these programs were set up in haste, executed poorly, and have done little to restore stability in the marketplace.”

Biggert continued, “A government program that spends more to save a single borrower than it costs to buy a home is no help at all – it’s just a waste of taxpayer money. We need to stop funding programs that don’t work with money we don’t have.”

Rep. Barney Frank (D-Massachusetts), ranking member and former chairman of the House Financial Services Committee, said he was “very disappointed” by the move that would “eliminate programs which help the victims of the financial crisis.”

Frank pointed out that the Emergency Homeowner Relief Fund, in particular, provides assistance to people who are unable to pay their mortgages not because they were imprudent or irresponsible but because they are unemployed. He notes that it is modeled after a program in Pennsylvania that has already proven successful, and he described the Dodd-Frank measure as “the single most effective anti-foreclosure program that has been put forward.”

Frank added that HUD’s Neighborhood Stabilization Program provides funding to municipalities to cope with the blight, expense, and destabilization brought on by vacant and abandoned properties. He described Bachus’ plan for its termination as “an attack on cities.”

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