Today, the new House majority will vote on The HAMP Termination Act (H.R. 839), legislation introduced byRep. Patrick McHenry (R-NC) that will save taxpayers $30 billion by canceling a TARP program that “has been beset by problems from the outset and…continues to fall dramatically short of any meaningful standard of success,” according to the most recent Special Inspector General for the Troubled Asset Relief Program’s (SIGTARP) report to Congress.
Earlier this month, outgoing Special Inspector General for TARP Neil Barofsky offered a scathing indictment of the Treasury Department’s unwillingness to accurately account for the program’s success – or lack thereof – saying: “That is the exact opposite of transparency, it evades accountability, and it’s trying to cover a program that is clearly a failure.” Watch more of Rep. McHenry’s tough questions on the HAMP program here:
Republicans have already passed legislation (H.R. 830) that will save taxpayers $8 billion by ending another costly, ineffective TARP program that gives private lenders the ability to dump their mortgage risks onto the backs of taxpayers. Together, these bills represent a significant step toward fulfilling the new House majority’s Pledge to America to “prevent Washington from forcing responsible taxpayers to subsidize irresponsible behavior by ending bailouts permanently, canceling TARP, and reforming Fannie Mae and Freddie Mac.”
Republicans are fighting for the spending cuts that Americans are demanding and economists say are needed to create a better environment for job growth, and will continue to do so with today’s vote – and several others in the coming weeks. If you have an idea for cutting spending, please share it with us at:www.americaspeakingout.com.
Committee Will Markup Bills to Terminate Failed Programs
February 24, 2011
WASHINGTON: Financial Services Committee Chairman Spencer Bachus announced a subcommittee hearing and full committee markup of four bills that will terminate failed and ineffective housing foreclosure programs.
The four proposals – which terminate the troubled Home Affordable Modification Program (HAMP), the Neighborhood Stabilization Program, the FHA Refinance Program, and the Emergency Homeowner Relief Fund – will be the subjects of a hearing on March 2 by the Insurance, Housing and Community Opportunity Subcommittee and 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 Chairman Bachus. “These programs may have been well-intentioned but they’re not working and, in reality, are making things worse.”
Insurance and Housing Subcommittee Chairman Judy Biggert said: “We need to break down barriers that have delayed the housing recovery, including expensive and ineffective government programs that have failed to helphomeowners. Unfortunately, these programs were set up in haste, executed poorly, and have done little to restore stability in the marketplace. 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.”
The Committee will consider the following bills:
The HAMP Termination Act. The Obama Administration’s signature anti-foreclosure effort, the Home Affordable Modification Program (HAMP), has failed to help a sufficient number of distressed homeowners to justify the program’s cost. According to the Administration, HAMP was supposed to help 4 million homeowners. Instead, only 521,630 loans have been permanently modified under this program and the re-default rate is high. To date, the Administration has spent approximately $840 million of the $29 billion earmarked for HAMP from the Troubled Asset Relief Program (TARP).
Far from helping at-risk homeowners, HAMP has actually made many worse off, according to a report from the Special Inspector General for the Troubled Asset Relief Program (SIGTARP):
People who apply for modifications via HAMP sometimes “end up unnecessarily depleting their dwindling savings in an ultimately futile effort to obtain the sustainable relief promised by the program guidelines. Others, who may have somehow found ways to continue to make their mortgage payments, have been drawn into failed trial modifications that have left them with more principal outstanding on their loans, less home equity (or a position further ‘underwater’), and worse credit scores. Perhaps worst of all, even in circumstances where they never missed a payment, they may face back payments, penalties, and even late fees that suddenly become due on their ‘modified’ mortgages and that they are unable to pay, thus resulting in the very loss of their homes that HAMP is meant to prevent. While it may be true that many homeowners may benefit from temporarily reduced payments even though the modification ultimately fails, Treasury’s claim that ‘every single person’ who participates in HAMP gets ‘a significant benefit’ is either hopelessly out of touch…or a cynical attempt to define failure as success.”
In a separate report, the SIGTARP noted HAMP “continues to fall dramatically short of any meaningful standard of success.”
The HAMP Termination Act ends the Treasury Secretary’s authority to provide new assistance under the program but preserves assistance already offered to homeowners through HAMP prior to the bill’s enactment.
The Neighborhood Stabilization Program Termination Act. Congress has appropriated $7 billion for the Neighborhood Stabilization program, including $2 billion in the Obama Administration’s stimulus plan. Two rounds of NSP funding have already been provided to states and localities. The Neighborhood Stabilization Program Termination Act ends the program and rescinds the unobligated third round of funding of $1 billion.
Critics have argued that the NSP does not benefit at-risk homeowners facing foreclosure, and may instead create perverse incentives for banks and other lenders to foreclose on troubled borrowers – arguably worsening the housing crisis.
The FHA Refinance Program Termination Act terminates the program and rescinds unobligated funding. The price tag for this program is $8.12 billion, of which only $50 million has been disbursed thus far. For this large outlay, the taxpayers have seen minimal return on their investment. As of December 13, 2010, only 35 applications had been submitted for this program.
The Emergency Mortgage Relief Program Termination Act ends the program and rescinds unobligated funding. The Dodd-Frank Act reauthorized the long-expired Emergency Homeowners’ Relief Act of 1975 and provided $1 billion to authorize HUD to make emergency mortgage relief payments to homeowners facing foreclosure for up to 12 months, with a possible extension of another 12 months. These loans will serve to increase the amount of the borrower’s indebtedness, so a borrower who is unable to pay back either the original amount of principal or the additional loans made under the program will be worse off in the long run.
The Neighborhood Stabilization Program Termination Act. Congress has appropriated $7 billion for the Neighborhood Stabilization program, including $2 billion in the Obama Administration’s stimulus plan. Two rounds of NSP funding have already been provided to states and localities. The Neighborhood Stabilization Program Termination Act ends the program and rescinds the unobligated third round of funding of $1 billion.
Critics have argued that the NSP does not benefit at-risk homeowners facing foreclosure, and may instead create perverse incentives for banks and other lenders to foreclose on troubled borrowers – arguably worsening the housing crisis.
The FHA Refinance Program Termination Act terminates the program and rescinds unobligated funding. The price tag for this program is $8.12 billion, of which only $50 million has been disbursed thus far. For this large outlay, the taxpayers have seen minimal return on their investment. As of December 13, 2010, only 35 applications had been submitted for this program.
The Emergency Mortgage Relief Program Termination Act ends the program and rescinds unobligated funding. The Dodd-Frank Act reauthorized the long-expired Emergency Homeowners’ Relief Act of 1975 and provided $1 billion to authorize HUD to make emergency mortgage relief payments to homeowners facing foreclosure for up to 12 months, with a possible extension of another 12 months. These loans will serve to increase the amount of the borrower’s indebtedness, so a borrower who is unable to pay back either the original amount of principal or the additional loans made under the program will be worse off in the long run.
Markup to consider the following measures: H.R. 839, "The HAMP Termination Act of 2011"; H.R. 830, "FHA Refinance Program Termination Act"; H.R. 861, "NSP Termination Act"; and H.R. 836, "Emergency Mortgage Relief Program Termination Act"
To amend the Emergency Economic Stabilization Act of 2008 to terminate the authority of the Secretary of the Treasury to provide new assistance under the Home Affordable Modification Program, while preserving assistance to homeowners who were already extended an offer to participate in the Program, either on a trial or permanent basis.
Thanks to @PatrickMcHenry, House just voted 252-170 to end#bailout funded #HAMP. Stops $30billion from being wasted on failed program #tcot
H.R.861 -- NSP Termination Act (Referred in Senate - RFS)
H.R.836 -- Emergency Mortgage Relief Program Termination Act (Referred in Senate - RFS)
H. R. 836 IN THE SENATE OF THE UNITED STATES
Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs
AN ACT To rescind the unobligated funding for the Emergency Mortgage Relief Program and to terminate the program.
3/11/2011 12:32pm:
On passage Passed by recorded vote: 242 - 177 (Roll no. 174).
3/14/2011:
Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
H. R. 830 IN THE SENATE OF THE UNITED STATES AN ACT To rescind the unobligated funding for the FHA Refinance Program and to terminate the program.
3/10/2011 4:36pm:
On passage Passed by recorded vote: 256 - 171 (Roll no. 171).
3/14/2011:
Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
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