In the past week, the House Financial Services Committee has approved bills aimed at terminating four mortgage assistance programs including the Home Affordable modification Program, the Neighborhood Stabilization Program, the Emergency Homeowner Loan Program, and the FHA Short-Refinance Program.  All four are expected to be passed by the full House of Representatives.

Citing waste and overspending on programs that have shown to be ineffective and only helped a fraction of the number of homeowners touted, the Republican controlled House seeks to terminate these programs as a sign of their commitment to reign in unnecessary wasteful spending.  The question that remain is whether this is an honest attempt to target ineffective programs, or is it political grandstanding on an issue supporters of the bills know they can't win?


Next, the bills will move to the Democratic controlled Senate, where some Senators are already suggesting the bills won't even make it out of Committee for a full floor vote, essentially calling the bills, "dead on arrival."  President Obama has already indicated that he will veto the bills if they make it to his desk, and it is doubtful that Congress could raise sufficient votes to override a Presidential veto.



As an example of the programs lack of success, Senator Jim DeMint pointed to the small number of successful HAMP modifications, 10 percent of the stated goal of 7 million homeowners, and a failure rate of 54 percent.  “Congress should move swiftly to end the President’s disastrous mortgage program, Sen. DeMint said.  "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,”

There are several ways to look at these bills and the point of passing them.  Obviously, they could be perceived as legislative time wasting for the sake of publicity.  Knowing the bills can't pass, supporters force the bills to a vote, bang on desks and show how hard they have tried to correct perceived problems.  On the other hand, they could also be real attempts to convince other legislators that that these terminations are necessary as part of a larger effort to control spending in light of tremendous budget deficits.

Another, more purposeful intent is to get Congressmen on both sides of this issue on the record, through votes, either approving or disapproving the passage of these bills.  In this scenario, supporters would contend that failure to pass these bills would fuel voter discontent that could be reflected in the 2012 elections.

There certainly will be more debate about the viability of these programs and the threats to their existence may find their way into budget negotiations.  However, at this time, the bills seem to be headed towards legislative roadblock.