U.S. House Republicans Move to End Foreclosure Aid Programs
U.S. Representative Spencer Bachus
Brendan Hoffman/Bloomberg
U.S. Representative Spencer Bachus.
U.S. Representative Spencer Bachus. Photographer: Brendan Hoffman/Bloomberg
Feb. 1 (Bloomberg) -- Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, talks with Bloomberg's Peter Cook about his quarterly report assessing the $700 billion federal bank rescue program. Barofsky also discusses investigations into potential misconduct related to TARP and the government's bailout of American International Group Inc. (Source: Bloomberg)
U.S. House Republicans plan to move forward with bills that would end anti-foreclosure programs put in place by the administration of President Barack Obama, saying they are doing more harm than good.
The House Financial Services Committee will consider bills next week to terminate four mortgage assistance programs, including the Treasury Department’s Home Affordable Modification Program, or HAMP.
“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,” Representative Spencer Bachus of Alabama, the chairman of the panel, said today. “These programs may have been well-intentioned but they’re not working and, in reality, are making things worse.”
While the Treasury Department reported that more than 30,000 homeowners permanently lowered their mortgage payments in December as participation in HAMP accelerated, the program has failed to reach Obama’s goal of helping 3 million to 4 million homeowners avoid foreclosure. Troubled borrowers continue to fall out of the program at a faster rate than they join. A total of 58,020 loan modifications had been canceled through December, according to the Treasury.
“While we cannot prevent every foreclosure, it is important to remember that these programs have helped to create more options for affordable and sustainable assistance than have ever been available before,” Tim Massad, the acting assistant Treasury secretary for financial stability, said in a Jan. 31 statement on the program.
‘Anemic’
The results have been criticized by housing advocates, lawmakers and watchdog groups, including Neil Barofsky, special inspector general for TARP, who in a January report, called the results “anemic” and “remarkably discouraging.”
Republican Representatives Jim Jordan of Ohio and Patrick McHenry of North Carolina last month introduced the bill to terminate HAMP.
The panel also will mark up bills that would terminate the Federal Housing Authority Refinance Program, funding for the Emergency Homeowners Relief Program and the Neighborhood Stabilization Program.
Lawmakers in the Democrat-controlled Senate have not introduced companion legislation.
To contact the reporter on this story: Phil Mattingly in Washington at pmattingly@bloomberg.net.
To contact the editor responsible for this story: Lawrence Roberts at lroberts13@bloomberg.net
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