Republican senators join fight to end HAMP
Three Republicans submitted a bill in the U.S. Senate that would end the Home Affordable Modification Program, a companion to a bill that is scheduled for a vote in the GOP-controlled House of Representatives next week. Senators Jim DeMint (R-S.C.), Bob Corker (R-Tenn.) and Tom Coburn (R-Okla.) introduced S. 527 to terminate HAMP for any borrower who was not already offered a permanent or trial mortgage modification. The Treasury Department launched HAMP in March 2009, claiming it would help between 3 million and 4 million borrowers. Treasury official have since said it was an overestimate and that the program will likely reach 1.4 million. An official estimate is expected at the end of March or early April. Roughly 600,000 borrowers have been offered a permanent mortgage modification through January. Over the last several months, the program has averaged between 25,000 and 30,000 permanent modifications. On the pace, according to the Congressional Oversight Panel, the program will end up helping between 700,000 and 800,000 borrowers before the end of 2012. Once thought to cost as much as $50 billion, the Treasury drew down that estimate to just shy of $30 billion. It has spent $1.2 billion so far at about $20,000 per permanent modification. Republicans say this cost is too high for a country saddled with debt. "Congress should move swiftly to end the president’s disastrous mortgage program. It has funneled millions of taxpayer dollars to big banks and Fannie Mae while taking struggling homeowners on a wild goose chase as foreclosures increase," DeMint said. While Democrats agree HAMP has underwhelmed many, they advocate retooling the program, not ending it. "What I am against is saying that foreclosures are not a problem. You're on your own. Too bad. Let's come up with a program that we can work together on to help these people and these communities," Rep. Michael Capuano (D-Mass.) said in a hearing last week. The House has already voted to end the Federal Housing Administration's Short Refi program, and the Department of Housing and Urban Development's Neighborhood Stabilization Program and its initiative to provide mortgage assistance to the unemployed. Some senators have said these bills are essentially "dead on arrival" once they reach the Senate, and the Obama administration remains adamant that it would veto any of these bills should they pass. But the fight to end HAMP will not take place in the House alone. "Like so many other big government programs, HAMP started with good intentions but has burdened homeowners and taxpayers," Coburn said. "Instead of leading homeowners through a maze of regulations and forcing them to run a gauntlet of incompetence, the federal government should help taxpayers by reducing spending, beginning with the $50 billion dedicated to this failing program." Write to Jon Prior. Follow him on Twitter @JonAPrior.