The House Financial Services Committee pushed back debate for two bills that would terminate the Home Affordable Modification Program and the Neighborhood Stabilization Program to next week.
On Wednesday, the committee held heated testimony
from both critics and defenders
of four programs built to prevent foreclosures, including HAMP, NSP, the Federal Housing Adminstration
's Short Refi program and the Department of Housing and Urban Development
's Emergency Homeowner Loan Program.
Committee members will debate the two bills that target the FHA Short Refi and the EHLP Thursday. Both bills are scheduled to go to the floor next week. But a source familiar with the matter said the committee did not have enough time Thursday to debate HAMP and NSP.
H.R. 430 would effectively end HAMP. Rep. Jim Jordan (R-Ohio) sponsored the bill. The program, launched by the Treasury Department
in March 2009, provides incentives to servicers for modifying troubled mortgages. Through January, servicers have started more than 600,000 permanent modifications, far short of the original 3 million to 4 million estimated. Roughly $30 billion in TARP funding is set aside for HAMP.
H.R. 861 would kill NSP, a program started in 2008. Through it, HUD cleared $7 billion in grants to state and local government and nonprofits to rehab and resell vacant homes that received a foreclosure. Rep. Gary Miller (R-Calif.) sponsored the bill.
H.R. 830 would terminate the FHA Short Refi program. Starting in September, the FHA began offering loans through 23 participating lenders to essentially aid borrowers who owed more on their mortgage than their home was worth back above water. The Treasury set aside $14 billion in TARP funding for it. Rep. Robert Dold (R-Ill.) sponsored the bill.
H.R. 836 would end HUD's EHLP initiative. It was formed under the Dodd-Frank Act, but won't begin until some time this spring. It provides up to $50,000 in 0% interest loans to unemployed homeowners to assist with mortgage payments. HUD planned to release $1 billion through the program. Rep. Jeb Hensarling (R-Texas) sponsored the bill.
An aide in one congressmen's office said the bills have strong support among Republicans set on cutting spending, but House Democrats are concerned that nothing is being put in their place. Even for the most beseiged program, HAMP, those testifying before the committee Wednesday did not support killing the program in lieu of fixing it.
Still, Republicans seem determined to press on.
"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," Bachus, chairman of the committee, said. "These programs may have been well-intentioned but they’re not working and, in reality, are making things worse."
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